There was also the audit exemption debate. Trade secretary Stephen Byers’ announcement at the beginning of the summer that he planned to raise the threshold at which companies are required to be audited from £350,000 to a new level up to £4.2m was welcomed.
However his justification for the change – that audits cost companies £5,000 a year – was not. Nonsense, cried the institutes and by December ACCA was quoting an average cost of around £2,000 for many SMEs.
Byers could hardly have envisaged the can of worms he had opened. Should the level be set at £1m? Or £4.2m, the European Union threshold? Everyone has an opinion – but only Byers will have the answer some time next year. Watch this space.
But the audit threshold was only a sideshow to a much bigger ride: the red tape roller coaster.
From the working families tax credit to corporate self-assessment, the minimum wage to the working time directive, red tape was the real issue that vexed business.
In an exclusive interview with Accountancy Age in October, Byers pledged to think small first and ensure the long arm of government bureaucracy only reached as far as was absolutely necessary.
In the pre-Budget report in November chancellor Gordon Brown announced a review of red tape on small business led by Lord Trotman. And only a few weeks ago Byers teamed up with government ‘enforcer’ Mo Mowlam in a campaign to ‘banish the bumpf’.
Again, as to whether these initiatives actually deliver a lower compliance burden, watch this space.
1999 wasn’t all about small businesses though. In September the profession itself got a new regulator in Lord Gordon Borrie, head of the Foundation. After the storm that followed the announcement of government plans to impose a lay majority of regulators on accountants – Lord Borrie is the former director general of the Office of Fair Trading – the calm ensued as everybody realised that life under the new regime might not be that different after all.
Firms involved in investment business had a second new regulator to contend with – the City’s new supra-regulator, the awesome Financial Services Authority.But that too might turn out to be less of a change that it might first appear. After being given responsibility for regulating all investment business, the FSA decided some of that monitoring might be better done by the accountancy institutes or a Big Five firm.
Worse, the job could go to the Law Society: it might seem unlikely but lawyers could end up regulating accountants. Once more, watch this space.
If 1999 was all about preparing for change, 2000 is all about delivery. Uncertainty and promise: at the dawn of a new millennium, the regulatory mood for the profession very much fits the times.
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