Students may reject smaller practices
Trainees may shun training contracts offered by smaller practices because the government's decision to raise the audit threshold will not give them enough experience of audit work outside of big firms.
John Malthouse, chairman of the English ICA’s General Practitioners Board, issued the warning after Stephen Byers said last week the threshold would rise to £1m initially and to £4.8m once the Company Law Review has reported.
‘What worries me are the effects on students’ training in small and medium-sized practices,’ Malthouse warned. ‘Trainees need a wide range of experience and skills. Audit is going to polarise towards the larger firms.’
He added: ‘From a commercial point of view, it won’t make a lot of difference.Audit work is no longer key to accountancy practices. But, it is still a retrograde step on the part of the government.’
The Scots ICA said it had already anticipated concerns of smaller practices about the issue. ‘We recognise that the new initiative will hit small practitioners harder than the larger firms, but the institute foresaw this might happen,’ said Elissa Soave, secretary to the institute’s student education committee.
‘Audit remains a core part of our syllabus. We still recognise the importance of audit competencies, but we have made provisions for students to be able to get that experience elsewhere and still train with small practitioners.’
Brian Chiplin, executive director of education and training at the English ICA, said the concerns of small firm trainees were understandable and said the institute would keep it under review. But, he insisted small practitioners would not be cut off from training students and said the institute’s new exam regime would counter any loss of audit work.
‘The new qualification will lay more emphasis on business and advisory skills that are more relevant the changing world of business,’ he said.