Letters – 15 July

Motive was not a grudge

Taking Stock (1 July) has heard ‘scurrilous whispers’ (not from me) that my successful anti-electives campaign was on account of a longstanding grudge about refusal of an application to register as an approved trainer.

Not so! It is true that, in 1991, I wished for protective purposes to renew my previously enshrined right to have my practice as a Post Qualification Training Office and fought very hard (as always) for this – on this occasion, unsuccessfully.

I had no immediate need in mind, but was aware of the long lead time and bureaucracy required for new applications which, as a sole practitioner, I wished to be in a position to bypass.

So far as I was concerned, the matter was resolved perfectly properly under the established appeals procedure, and subsequently the directorate made substantial changes to reduce the bureaucracy and lead time in the application process.

It is, however, fair to say that, as a result of the issue, I made myself far more aware of, and interested in, matters relating to education and training including, on invitation, the writing of a six-page submission on the 1993 consultation paper which was supportive on virtually every point except electives.

It was the fact that my views on this fundamental issue were more representative of the membership at large that led to my success in the meetings 1996 and 1999.

John KH Cook MBA, FCA, Wirral, Merseyside

IFAs face the competition C J Hatton asks (‘Letters’, 1 July) why financial advisers do not check net relevant earnings with accountants before setting up pensions. I am an independent financial adviser and maybe I can answer the question.

The main reason is that most IFAs have plenty of experience of losing business to accountants. Either they sell policies themselves or, as is more common now, they have links with an IFA. When you depend on sales for your income you are reluctant to recommend a consultation with the opposition.

The second reason is the Inland Revenue does not require an adviser to confirm income for a self-employed personal pension (it does for employees). In an age when there are prescriptive rules about nearly everything else, some advisers are prepared to take the client’s word for it when he states his income.

If an answer had to be given to your title, ‘Are financial advisers still just commission agents?’, it would probably be ‘yes, in most cases’. The industry still finds it very difficult to make the transition to a profession when the public are not ready to pay fees.

Peter Smith, Derry, Northern Ireland

MBAs grow in stature As I am in the final stages of a one-year full-time MBA at the University of Bradford Management Centre, I was interested in the article in Accountancy Age (8 July).

I have long believed that, while accountants with MBAs are still something of a novelty, in a few years’ time, a MBA will be a standard requirement.

However, there are only three accountants on the course, out of a total of 54 students, the majority of whom come from sales and marketing backgrounds.

I am fortunate in that, as an ACMA who’s worked for a number of years in engineering and manufacturing, I was already familiar with much of the course content. However, I have also learned a great deal, particularly about corporate strategy and have benefited from being in close contact with a group of intellectual peers from all walks of life.

Although the overseas intake was hit by the Asian financial crisis, we still had students from Thailand, Malaysia, Taiwan and Singapore, as well as from all over Europe. We have a large cohort of German students this year, on a Management Development programme from Bayer, the German chemical company. All the students have benefited from their presence, not least from their in-depth knowledge of all the component applications of Microsoft Office.

Making the decision to do a MBA full-time is hard and scary, particularly if partners and children are involved. Most of the UK students had reached career crossroads, for example redundancy, which simplified the decision.

However, I do not know anyone who has regretted either the time or money that they have invested in the year.

Doing a MBA is incredibly hard work – unfortunately, the Working Time Directive does not apply to unpaid students! But it is both intellectually challenging and stimulating, and immensely satisfying.

I thoroughly recommend it to anyone who does not want a social life for a year.

Karen Ratzeburg ACMA, Heywood, Lancashire

Yet another red herring Mr Wetherell’s letter (1 July) is just another red herring. We all know that the abolition of the audit for SMEs in line with the European Fourth Directive has nothing to do with the filing of accounts at Companies House.

The current exemption turnover of £350,000 relieves the company from the expense of an audit but not the filing requirement.

MA Hadfield OBE, FCA, Chesterfield, Derbyshire

Euro scales fall off FDs’ eyes I was amused to see your news item on page 1 (1 July) reporting that finance directors have joined everyone else and are now seeing the euro for what it is. Namely, a vehicle for the flatulent ambitions of political has-beens.

There are no economic benefits to this nonsense. There would be enormous changeover costs. And there are huge economic disadvantages arising out of the need for a single interest rate from Iceland to Gibraltar. Not to mention the loss of sovereignty question.

But the final item in your news item was quite hilarious. You quote some guy running a ball-bearing factory saying that we had to go in because his company was being asked to quote in euros.

Anyone would think, listening to him, that the notion of being asked a price for something in a foreign currency was a new and alien concept instead of the routine day-to-day trundle of business life since convertible currencies were invented.

I have news for him. Quoting in foreign currencies is what he is paid to do. If he has technical difficulties with this routine activity, then he is probably in the wrong job.

John Downes, Nottingham

Audit and accounts aren’t in the same ball park TE Wetherell (‘Letters’, 1 July) needs to consider the distinction between audit and accounts.

Audit exemption clearly does not mean accounts exemption. The directors of an audit-exempt company still have the responsibility to file accounts presenting a true and fair view of the company’s affairs.

Any debate about the effect of audit exemption on the granting of credit should centre on the value an audit adds to ‘small’ company accounts.

Julian Wattam, Southampton, Hampshire

Related reading