Letters - 18 March
Let’s look at racism
The Stephen Lawrence inquiry has raised some important questions about conscious and unconscious institutionalised racial discrimination. Such matters are not taken seriously by the accountancy profession, which has done little to fight it and has a disgraceful record. Last year, fewer than ten Afro-Caribbean individuals were hired by major accountancy firms and the English ICA has done nothing about it. We rarely find any black partners in major firms or senior industrial posts. None of the professional bodies has ever had any black officeholders. The profession has sponsored a ‘Women in Accountancy’ group, but there is no equivalent to represent black people.
ACCA has the largest number of black accountants, but it has done nothing to help us fight discrimination. Maybe we are just an easy source of money.
Only Prem Sikka had the courage to publicly raise the issue of racial discrimination and asked the leadership to develop policies to help us to make the most of our lives. ACCA behaved disgracefully by attacking him for raising the important issues. I applaud the courage of Jim Cousins MP (‘View from the House’, 18 February) and hope that all the accountancy bodies will respond positively. They can make a start by collecting information about the ethnicity of their members, their career patterns, earnings and unemployment rates and develop policies for fighting racial discrimination.
Krishan Gopal, Glasgow
A no-win situation The final paragraph of the article on the euro (‘Ready or not – here we come’, 4 March) describes those against the euro as ‘euro-sceptics’ and those in favour as ‘europhobes’.
Not much chance for the euro!
David Rawsthorn, director of finance, Eden District Council
Subliminal scratchings Keeping up to date (!) with my important reading, I noticed that Colin (‘Taking Stock’, 18 February) seemed to be preparing to rock ‘n’ roll in a very odd manner. By the way he is licking his lips, he seems to be looking forward to salted nuts. I feel you should offer a prize for the most amusing caption!
John J Rayment, business consultancy manager, Anglia Business School
Accounting for power The article in your edition of 4 March (‘Power to the people, no delay’) is very timely. Electricity consumers’ committees have been pressing the regulator for some time to improve the present system of accounting and reporting for the electricity utilities. Under the present regime, the consumers’ committees find they are unable to obtain the relevant information to monitor effectively the activities of the various companies. Regulatory accounts, on which regulator pricing decisions are made, cannot be reconciled with statutory accounts. They are prepared under the current cost convention, with all that implies about the cost base on which allowable revenue is calculated. There is no means of checking inter-group transactions, despite the need to monitor cross-subsidies between operators’ various activities. All these issues cannot be considered without much better information. Commercial confidentiality is always quoted as to why our requests are turned down.
Examples of apparent discrepancies between companies are the widely different surcharges applied to customers with pre-payment meters and the percentages of gross staff costs treated as capital expenditure. An example of unusual accounting was the provision of #125m made in the March 1997 supply business accounts of Yorkshire Electricity against an estimate of the losses that would be incurred over the next 11 years on contracts for the purchase of gas and electricity. The charge in the accounts of the holding company was a mere #78m. The difference of #47m was credited to the non-regulated generating company, which was subsequently sold to a third party.
It is hardly surprising that the consumer committees are pressing for an industry SORP to provide some better regulation over accounting for electricity.
John Mordy, Leeds, Yorkshire
It’s a simple case of supply and demand I was intrigued to read Richard Murphy’s advice to the profession (‘But don’t tell us what to do’, 25 February). Mr Murphy’s contention that accountants should do what they do best seems to ignore the fact that the business environment is fast-changing and the demands of the now ‘sophisticated’ client have dramatically shifted over the past few years.
It is no secret that innovation is fast becoming a threat to the profession, with growing concern that global, technological development will reduce the need for the traditional services offered by our profession. I would suggest it is time to respond.
There is a simple rule in business – supply and demand. If accountants have clients demanding more advice or services, then surely they should see this as an opportunity to enhance their relationship with their clients.
The Financial Director survey on the value attributed by clients to audit services (4 March) merely confirms what many in the profession have been claiming for a long time – that compliance services are seen more as a necessary evil than as a value-creating service. Our view is that firms which refuse to acknowledge that are going to face ever-increasing pressure on their fees.
To wait for the curriculum to shift before accountants become proactive in this area is a waste of a serious opportunity for the accountancy profession. We have conducted several hundred client advisory boards around the world, the vast majority of which stand testimony to the fact that accountants have already formed strong relationships with their clients, who trust and respect them.
Now is the time to capitalise on that. I would draw Mr Murphy’s attention to page 29 of the institute’s ‘2005 Value Added Professionals’ report, which identifies critical factors that accountants need to embrace in order to succeed in the new millennium.
If this is the way the institute is focusing, perhaps then too should Mr Murphy – but, then again, we all do have a choice.
Colin Dunn ACA, research and development director, Results Accountants’ Systems