PracticeConsultingEnglish ICA denies fat cat competition probe will worry accountants

English ICA denies fat cat competition probe will worry accountants

Accountancy firms have nothing to fear from an investigation of the profession by the Office of Fair Trading, according to the English ICA.

Peter Owen, executive director of the Professional Standards Office of the English ICA, said accountancy was already an ‘open’ profession which only had restrictions on who could practice to ‘protect the public’. It therefore had nothing to fear from an OFT examination of competition and restricted entry to accountancy, he said.

The OFT revealed yesterday that, after requests from DTI and Treasury ministers, it was to examine accountancy and law, professions that are excluded from provisions of competition law.

Tight standards for entry to accountancy, along with restrictions on advertising and whether some accountancy work can be opened up to people without the accepted professional qualifications, are the three main areas the OFT will examine.

The investigation appears to follow concerns in the Treasury that exclusion of accountancy and law from the Competition Act, which came into force on 1 March this year, is distorting the market.

The Treasury’s Red Book says: ‘There may be linkages between the possible effects on competition of the way in which the profession are regulated and wide issues affecting these markets, such as the conduct of market participants. If so, the review ill need to considers these as well.’

Peter Owen said: ‘Of all the professions accountancy is the one most open to competition already.’It’s not a very closed profession, we don’t have just a single professional body.’The firms are pretty competitive on price and on quality.’

He said the creation of the Foundation as a new regulatory body was a clear indication that accountancy is seeking ‘external scrutiny’.

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