- Practice assurance
- Revenue/Customs merger
- Big Questions
- Europe issues
- Qualified vs Unqualified
- Capgemini rebrand
- Huntingdon LS (auditor protest action)
Your ‘Opinion’ (29 April) claims that Practice Assurance is a ‘necessity’. Surely, we should be questioning yet more regulation in our lives rather than accepting it as inevitable. Undoubtedly, the latest scheme represents a big improvement over the initial proposals. Of course, we accountants want to provide our clients with a professional service. We welcome guidance on ?best practice? from our Institute ? this is its job. But, why, after all these years, do we need more records, annual returns, official visits, another fee? Why cannot we be trusted to act in the best interests of our clients without ?Big Brother? looking over our shoulders?
Michael Seaton FCA, 11 May
‘Further to your report of the practice assurance debate, the UK200 Group’s view is that firms’ procedures can change dramatically during a period of 5 years and not give sufficient confidence to the public in the same way that kite-marks or their equivalents do when they are reviewed annually. Surely this is the way forward. We have been committed to practice assurance from day one l8 years ago. Not only are new members required to submit to rigorous checks before admission to UK 200 Group, but all member firms’ standards are reviewed by independent reviewers once a year to ensure the highest standards.’
Helen Phillips, President, UK200Group on 30 April 2004
‘Your opinion column ‘Assurance: only one way to go’ attempts to frighten us into voting for this bureaucratic measure. The arguments you put forward are far from convincing.
The fact that the Government may be sympathetic to a cap on auditors’ liability is totally irrelevant as Practice Assurance is aimed at the smaller accountancy practices that do not carry out any audits. Auditors are already regulated.
If the government think this is necessary, then let them introduce legislation. It would then apply to all accountants, qualified and unqualified, which would probably solve the problem highlighted by your other article “Government urged to act on unqualified accountants”. short cuts have to be made to produce the figures in time.
Jeffery Edelman FCA on 1 May 2004
‘Practice Assurance – is this what it means to me?
I am a chartered accountant with practice certificate and a small practice not registered as a firm of chartered accountants. We have not been regulated but try our best to keep to institute rules.
We have managed to keep our heads down until Money Laundering came in on 1 March. Now I understand we may be caught by Practice Assurance too.
IR35 reduced our practice by 33% and I am now led to believe that Practice Assurance could do worse! Is my institute really going to do this to me? I understand that every job will have to be done along a rigid set of rules and recorded accordingly. These are the same checklists that are prepared by auditors from business receipts before starting the bookkeeping.
This all sounds as if chartered accountants will be priced out of the market as far as small businesses are concerned. Can I change to being a certified accountant and renounce my chartered status?
Catherine Steadman BSc FCA, Limelight Business Support Ltd on 5 May 2004
‘The voting papers are now out for the ICAEW’s Practice Assurance scheme but before the voting deadline arrives, I would welcome the answer to a question.
I have read, over and over, that if the ICAEW does not adopt a Practice Assurance scheme voluntarily, it will have one forced upon it. But nowhere have I read who will do the forcing, and why.
This is particularly relevant at the micro-level, where chartered accountants are competing with unqualified accountants for clientele who – really, gentlemen, it’s true, take my word for it – are wholly unimpressed by whether one can put ‘chartered’ in front of accountant.’
NR Welch FCA, pro tem, Shanklin, Isle of Wight on 4 May 2004
‘This week (29 April) you have a front page ‘Opinion’ which claims that a ‘yes’ vote to practice assurance is, to paraphrase, the only honourable and decent thing. I take exception to the use of a newspaper to engage in emotional blackmail and what amounts to blatant propaganda. There is no attempt to justify this point of view, or even to make it clear that it is only one point of view. Claiming the high ground in this manner and seeking to influence an important vote in such a flagrant manner is an abuse. You should either retract or publish an equally strong and prominent alternative ‘opinion’ to balance the case. I would like to remind you that the reason things are put to a vote is so that members can make their own views count and they should be free to do so without being bullied.
Peter King, PK Consulting, Nottingham on 29 April 2004.
Your article about merged tax body, Inland Revenue and Customs & Excise, chasing billions from dishonest tax payers is really good news. I do not see any threat to taxpayers confidentiality if their computer share information. I would go further to recommend merging and consolidation of VAT and Eurostat Returns within the Annual Accounts to streamline matters further.
Nagindas Khajuria, Simplification Made Simple Limited, 10 May
‘I read this article with some disbelief which quickly turned to annoyance. So who are these FD’s who think they know best? Since both major political parties have been torn apart by the long running Europe debate and the issues have been raging for years how can these FDs claim that the public are ignorant? By implication are they saying that they are therefore not ignorant? If they claim to be ‘in the know’ then are they viewing the European Union purely through their blinkered corporate eyes? If one believes the public really cannot judge for itself then where does that lead? The same could be said of a general election surely in that there is a core of the electorate which is simply apathetic: but I don’t hear anyone saying we should give up democracy on that basis.’
From Witold Sawin, Sawin & Edwards on 29 April 2004
Whilst I fully take Andrew Hubbard’s point where he asks:
‘Is there anything fundamentally wrong with the proposition that two people doing the same job for the same reward should pay the same amount of tax? I don’t think the man in the street would view this as a problem. Yet we have a system that dictates that an employee, a sole trader and a one-man service company could end up paying very different amounts of tax on what is essentially the same amount of income.’
This misses the crucial point that, whilst the ‘man in the street’ would almost certain feel that two people doing the same job for the same reward should pay the same amount of tax, he would probably be rather shocked to learn how different the benefits and protections available to each of these two people were, bearing in mind that they had paid the same into the kitty. The level of risk taken by each of these two imaginary souls is also massively different.
If you are a typical contractor, try asking the DSS for Dole money when your contract runs out ‘No – sorry – you are a director of a Limited Company’, or sick pay ‘No – sorry…’, or statutory redundancy pay ‘Errr – No’, family working credit, maternity pay, etc, etc, etc. ‘Next!’
Mike Walker, busychip.co.uk, 12 May
‘In the arid debate on IR35 both Kevin Miller and Andrew Hubbard have ignored the elephant in the corner: this is the nonsense of not treating National Insurance (NI) as income tax. The solution to IR35 (and, by the way, provide a general simplification of the way we are taxed) is to (a) abolish NI, (b) increase employees’ salaries by law by the equivalent of the existing employers’ NI contribution and then (c) tax the lot through existing income tax/PAYE arrangements.
Robert Coleman, director, US Offshore, Roman House on 1 May
‘In ‘The debate’ on 29 April you published my argument, under the heading ‘IR35 No good for Hood’. However, the editing process cut out a significant part of my case. As a result, Andrew Hubbard of Tenon, who proposed the counter-argument, confined his discussion to the issue of whether IR35 was fair as regards the amount of tax a ‘disguised employee’ should pay. My case was focused on the issue of employment protection.
The original IR35 press release had stated that IR35 would address both of these problems. However, the final legislation only dealt with the first problem and actually makes the second problem worse.
It seems that, by allowing the inconsistent treatment of tax and employment liabilities, IR35 positively encourages employers to engage workers via an intermediary and thereby serves to act against employment protection.
Kevin Miller MA, FCA, director, Kevin Miller Consulting Limited on 1 May 2004
I was delighted to read that the ICAEW is getting together with the Inland Revenue to promote the value of the Professional Qualification.
I hope that this concord will spread to other government departments as last week one of my managers was told by an official at Companies House that they had no responsibility to check that accounts complied with the Companies Acts. She had called Companies House to complain about a set of accounts that had been filed by a firm that was not a member of a recognised body and the accounts not only didn’t comply with the Companies Acts they probably didn’t comply with any accounting standards.
The official said very firmly that it was not their job to regulate the quality of documents filed, and if they have the correct pages and the statement required on the balance sheet they will accept them in good faith. They do not want to know if there is a problem, but if you can prove fraud they suggest you speak to the police.
On pressing the lady, she said we could write to customer services giving details of non-compliance with the Companies Acts and they would ‘probably’ write to the company inviting them to re-submit accounts to amend the incorrect document!
If the DTI is not regulating the quality of accounts then does this mean that the disclosure requirements set out in the Companies Acts are no longer mandatory?
John H Painter FCA, Crowther Beard LLP on 4 May 2004
I have read with keen interest the article which appeared on AccountancyAge.com on 29 April 2004 that the government is being urged to act on unqualified accountants.
The question is how many firms can come out and say all members of the staff are fully qualified. Most firms use both qualified and unqualified staff, usually those qualified by experience, reason not paying the onqoing market rate.
These days the technology does all the work from accounts production to tax and the returns, and majority of accountants do not give tax advice.
I think ICAEW has lost the plot. I am a member of the CCAB, wthether one is qualified or not qualified, once they are capable in delivering, they should be allowed to do their work efficiently and effectively.
William Karikari, Tiny World UK on 30 April 2004
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