PracticePeople In PracticeAccountants: auditors for the web

Accountants: auditors for the web

Security breaches, viruses, fears of credit card abuse and now complaints over delivery times have led to increased concerns that web operators need more monitoring. But who should take on this role?

UK accountancy firms, under the leadership of the chartered accountancy institutes, are among the organisations that have set themselves up as providers of website ‘seals of approval’. But for consumers the existence of a growing number of such stamps of approval can be confusing – and make little difference to their decision whether or not to buy online.

Accountants become web watchers
More than a quarter of the UK population now uses the internet. But only a quarter of these use the internet to purchase goods, according to a survey by CommerceNet and Nielsen Media last year. ‘Customers browse online, but still buy on the High Street,’ said Mike Sturgess, managing director of accountancy training outfit SWAT.

Internet approval seals are designed to reduce fears consumers have about making online purchases by verifying that web-based businesses adhere to their professed policies and procedures, looking at whether they deliver their goods on time, fulfil customer service goals and assure security and privacy.

The idea of a web watchdog is not new. Many North American web operators have been complying with a seal of approval called WebTrust for months.

Webtrust seal Last month the English, Scottish and Irish chartered accountancy institutes launched WebTrust here. Its aim is to ensure web operators fulfil their claims and to allay online shoppers’ fears when buying goods with their credit cards.

WebTrust was developed by the American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA). Its proponents have big plans for WebTrust.

Toronto-based Computer Systems Centre (CSC) received the WebTrust seal in December 1999. ‘The reason we selected WebTrust is that the WebTrust seal signifies the highest level of security and privacy assurance that can be communicated to customers,’ CSC’s online manager Bryan Wray told

Websites wishing to register with WebTrust undergo rigorous checks over a minimum period of three months. These checks verify that the company adheres to the procedures, trading methods and standards it claims to have.

Web auditors can take up to six months investigating companies who wish to have the WebTrust seal of assurance. So far, 360 chartered accountants are qualified as web auditors. Reviews will take place on a three-monthly basis.

After the checks have been satisfied, the company gets to sport the WebTrust logo denoting that it fulfils the criteria of security, privacy and delivery of goods. SWAT Ltd became the first UK organisation to be awarded with the UK WebTrust seal for e-security this month.

SWAT’s Sturgess said: ‘WebTrust is a vital new service for any consumer or business purchasing anything via the internet. With the rapid growth of the internet and e-commerce many businesses find that their systems and controls simply cannot keep up. WebTrust deals directly with the security and privacy concerns of on-line shoppers and standardises the criteria for secure internet transactions.’

Why accountants?
With the auditing experience that many chartered accountants already have, some feel they are ideally suited to take responsibility for this new branch of auditing.

‘Chartered accountants have unrivalled understanding of business processes which means that they are ideally placed to appraise e-practice,’ said Chris Howard who is heading up the Assurance Services Initiative at the English ICA.

‘This will unite the auditing profession around companies providing consumers with an honest, professional service,’ said Nick Bleech, KPMG’s e-commerce consultancy department.

War of the web watchdogs?
But accountants are far from having this fledgling market sewn up. There is competition for the role of web watchdog, and fears that this could confuse consumers. ‘With the growing competition among seals of assurance, consumers will become very confused as to what they represent,’ said KPMG’s Bleech.

Some web seals of approval, such as Which’s WebTrader, run by the Consumers Association, include a liability clause that will reimburse an unhappy customer the first £50 of a loss, if the e-business concerned carries the WebTrader seal. ‘It’s very interesting that some seals will partly repay customers if they experience losses when buying from a web site that carries their seal,’ said Bleech.

Like many other e-commerce experts, Bleech feels that a clause like this indicates a company might have doubts about the organisations, which carry their logo. Alan Stevens, from which, denied WebTrader was given out without proper investigation first, explaining that the reimbursement clause was a case of forward thinking, rather than doubt. ‘Our legal officers who are trained in consumer law carry out in-depth checks on an applicant’s web site. It takes between 2 to 3 weeks,’ he added.

Of the 1,000 applications submitted to the WebTrader assurance seal since its launch in June 1999, only 500 have been accepted. Once a UK company is approved, random checks are carried out to ensure the company is continuing to comply with stipulated criteria.

The Financial Services Authority is also getting in on the act proposing a suffix to be added to the address of financial institutions regulated by the authority.

If institutions so wish, the suffix,, would be added to internet addresses to indicate to online customers that the company adhered to privacy and security policies.

Under this proposal, major banks that have already invested massive sums in registering and marketing their internet addresses, such as Egg and Barclays, would be obliged to re-register their web addresses – and may understandably be reluctant to take part in such a scheme.

The government is also currently considering the development an internet watchdog of the watchdogs to monitor all existing internet assurance seals.

SWAT, UK site that has Webtrust seal
Canadian site that has WebTrust seal

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