Regulation – Lay regulators ‘incompetent’

The proposed regulatory regime for accountants will be overseen by individuals who are incompetent to deal with complex accountancy issues, a major academic study has warned.

The report, from the University of Portsmouth, has slammed plans for the new regime, particularly the fact that most of the bodies involved would be controlled by non-accountants.

It said a predominance of lay members on bodies running the proposed regime would undermine the effectiveness of the regulatory processes and increase costs.

‘The majority of members of the key boards will, by definition, be incompetent to deal with complex technical issues which arise,’ it said.

Publication of the report last week in the Journal of Financial Regulation and Compliance will fuel the growing row between the profession and the government over the composition of three boards in the proposed regime.

These cover investigation and discipline, ethics and audit.

The government wants 60% of board members to be non-accountants, while the profession is fighting for a 50:50 split.

English ICA president Chris Swinson, who has been leading discussions with the government on the issue, said last week the profession was about to submit a joint response to the government’s proposals.

It is understood this will call for more accountants to sit on the boards in question.

Related reading