Letters – 1 July

Institute loses principal role

The English ICA’s vote on electives last week did not come as a surprise.

But the fact that it was felt necessary to conduct this vote, a mere three years after a similar recommendation by the institute had been comprehensively voted out by its membership, is questionable.

The fact that this was tagged onto the agm is indefensible, for as past practice has shown, and was no doubt the reason for this, most members put agm papers to one side when they are received, and never actually get around to reading them prior to the meeting, and they are subsequently dispatched to the wastepaper bin.

No doubt the institute thought that they would squeeze the resolution through – helped by a number of proxy forms which, by standard practice, are sent to the president, allowing him to vote in accordance with his wishes.

The institute has made a number of errors over the past 20 years, particularly in connection with education and regulation. It has basically lost its principal role, which is to look after the needs and requirements of all its members, and not just the Big Five, most of whom, in years to come, will no doubt become multidisciplinary practices in any event encompassing, in addition to the usual current functions, legal work, banking and finance.

JF Peters, St Peter Port, Guernsey

Knee-jerk reactions If I understand it correctly, the proposal to lift the audit threshold for ‘small’ companies to those with an annual turnover above £4m, will mean they will not have to file accounts with Companies House.

If that is the case, it will remove, at a stroke, a valuable means of assessing the credit-worthiness of those companies.

The easy solution to that problem, for suppliers, will be to place the more uncertain ones on pro-forma terms, which will put them in a double bind – no credit from suppliers and late payment from customers.

It seems to me to be another ill-thought out, knee-jerk policy from a government which is long on image, but short on substance.

T E Wetherell, group finance director, Airedale International Air Conditioning

Financial advisers still just commission agents? Despite changes regarding training and monitoring of financial advisers, I am alarmed that a lot are selling pensions and paying lip service to the procedures. I am concerned here with identifying and quantifying net relevant earnings.

I would suggest that for the self-employed and directors of owner-managed businesses the adviser should always approach an accountant. In my experience, I rarely get contacted by the adviser when pension policies are being taken out or premiums increased.

I do not wish to be a financial adviser and do not presume to know which funds are the correct ones to invest in.

However, along with fellow accountants, I know how to calculate net relevant income, and have accurate details of past profits and salaries.

C J Hatton ACA MSc, Wolverhampton

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