Letters – 10 June

Soaring cost of discipline

Whereas the increase in the number of individuals and firms obtaining a disciplinary record from the English ICA in 1998 was 19.5% (up from 123 to 147 proven cases), there was a massive increase in the fines and costs imposed.

Fines increased by 41% from £117,000 to £165,000. But costs rocketed by 69% from £89,000 to £150,000.

In 1997, the hapless accountant summoned to appear before the disciplinary committee (or given a consent order by the investigation committee) could expect a fine of £951 and costs of £724 (total bill £1,675). But by 1998, these figures had shot up to £1,122, £1,020 and £2,142 respectively. Few avoid fines – most who did were excluded from membership.

Why is it that the costs imposed on members (for the investigation and the hearing) should soar by nearly 70% with only a 20% increase in the number of disciplinary cases?

Are the complaints becoming more complex, or is it simply because last year the Professional Standards Office introduced a more efficient time-recording system?

Nevertheless, whatever the explanation, as a solicitor who regularly represents accountants, I am concerned about what my clients are having to pay. And don’t forget, the disciplinary committee does not always order a member to pay the full costs.

Christopher Cope MBAE, High Wycombe, Bucks

Full support for CPD An article in Accountancy Age (‘Hypocrisy row hits CIPFA’, 27 May) questioned the commitment of members of a key CIPFA working party to CIPFA’s continuing professional development scheme.

Shelley Thornton was quoted as saying that some members ‘choose to maintain their technical skills and competence without formally registering within the scheme’. In making this statement, she was making the point that, while registration in the scheme is voluntary, maintaining competence for a professional accountant is not.

Indeed, a recent independent review of CIPFA’s CPD scheme, which was carried out by the Centre for Educational Development, Appraisal and Research at the University of Warwick, showed ‘that non-participation in the scheme does not reflect a lack of engagement with CPD’.

Members who choose not to participate in the scheme may well be undertaking sufficient development to meet the scheme’s requirements. However, CIPFA council’s policy continues to be that members should formally register and participate in the voluntary scheme.

All members are encouraged to participate in the scheme, and CIPFA will continue to work to ensure all concerned get the most out of it.

Chris Hurford, chairman, CIPFA education and training committee

Female golfers go for green After round one of the Accountancy Age Masters Golf Tournament, I was pleased to see that a female had both braved the entrance and secured victory in the first-round match of what is so obviously a male-focused competition.

I am sure there must be quite a lot of other female accountant golfers out there who, like me, have thought twice about entering the competition which has been so macho in its publicity, and not least because of the thought of ‘parading’ the coveted Accountancy Age Masters jacket.

Perhaps next year’s competition will be more encouraging to all accountant golfers. Meantime, continued good golf to Anne Clarke.

Sharon Slack, FCMA, via email

Why the Treasury’s new tricks aren’t working You report on recent criticism of the Treasury by the English ICA, in connection with the 1999 Budget day press releases (‘English ICA hits spin doctors’, 20 May). Specifically, the ICA complained that there was too much emphasis on presentation, and not enough on accuracy, in these releases.

May I endorse this criticism, with specific reference to press release Inland Revenue 1 (IR1); this dealt (inter alia) with the introduction of the new 10p rate band which applies in most cases to the first £1,500 of taxable income.

After the Budget, it soon became apparent that the 10p rate band does not apply to savings income, income which is always regarded for tax purposes as the top slice of the income of the taxpayer concerned. However, IR1 contained the following sentence: ‘The 10p rate will apply to taxable income up to £1,500 and replaces the lower rate of 20p.’ (IR1, page 1, paragraph 1.) No ifs, no buts, no ‘in general terms’ or ‘broadly speaking’.

This sentence was, at face value, 100% incorrect.

The Treasury must have known that, in the rush to prepare Budget booklets and newspaper columns on Budget night, the error would be replicated many times over. Presumably this was part of its policy.

The irony of this is that, overall, the Treasury has quite a good story to tell, both in terms of macro-economics and the public finances. On macro-economics, the granting of independence to the Bank of England has probably helped produce a soft landing and avoided a recession. On the public finances, the disastrous stewardship of the public finances by the Conservatives in their final five-year term 1992/1997 has been replaced by the prudent stewardship of the present chancellor.

Why (given this good overall record) did the Treasury resort to deliberately inserting a falsehood in IR1? The Treasury might like to reflect on the merits of the cynical adage ‘sometimes, the truth is the best form of lie’.

Maurice Fitzpatrick, head of economics, Chantrey Vellacott DFK, London WC1

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