Jim Cousins – View from the House

Success and expansion bring on an identity crisis, as the accountancy bodies have discovered. What and who do accountancy bodies represent?

Isn’t it time they reorganised?

Initially formed to lobby and secure niches and monopolies for their members, the accountancy bodies added an educational role to their portfolios.

Subsequently, they became conference organisers, publishers, TV programme makers and software sellers. More recently, in a submission to the Lord Chancellor, ACCA asserted that it is a business!

Membership of such bodies is diverse. Some work in public practice, some in industry, commerce, public sector and consultancy. Some function as auditors, with others as insolvency practitioners, directors, managers and clerks. Some work for small firms, others for medium and large firms.

Some work for local organisations, others national and international concerns.

Diversity and competing interests have made it difficult for the accountancy bodies to represent their members.

Despite all the rhetoric of ‘serving the public interest’, they remain, primarily, trade associations. They are active when seeking liability concessions, but quiet when major firms fail to publish meaningful information about their affairs.

A small proportion of accountants act as auditors and insolvency practitioners.

But this wing dominates the profession. Ethical rules make it easier for auditors to enter industry, but a move in the opposite direction is highly restricted. Most disciplinary and regulatory effort is aimed at the public-practice wing which continues to be implicated in scandals. Small practitioners are penalised and larger firms get away with it.

Accountants in industry and commerce are forced to subsidise regulation of the public-practice wing, but since their educational and regulatory pressures are different, there is little reason for treating the profession as a homogenous entity. Surely, the way forward is to reorganise the profession and separate the public-practice wing from the rest?

Jim Cousins is Labour MP for Newcastle Central.

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