RegulationAccounting StandardsWhere is the profession heading in 2006?

Where is the profession heading in 2006?

Easing the burden for corporate FDs will be key in the next year for Philip Broadley. While Ian Morris wants to see unity in the accountancy profession

FDs make their own fate

The next year will be another important one for finance directors. Five core
issues will be of particular interest to members of The Hundred Group in 2006.

Although we are now through the first stage of IFRS, there are a number of
important standards still to be implemented next year. These will lead to a
number of important questions regarding interpretation, and potential for
divergent views leading to separate EU and US interpretations of the same

There has been much focus recently on pension schemes and the introduction of
new pension legislation. Pensions will continue to play a prominent role in our
lives as the pension regulator’s view of his own role emerges and the PPF is in
operation. The regulator will have significant influence over the decisions we
make as finance directors, a constructive relationship must be built with the

The corporate tax burden has always been high up on companies’ agendas.
Research of corporate tax issues will be academically vigorous now the Hundred
Group has secured funding for the Oxford University Centre for Business

Our dialogue with investors should broaden. We spend a great deal of time
talking to our investors about our companies’ performance and much less time
talking about issues that affect companies and investors as a whole. We share
many common areas of interest with our investors that could be addressed.

The last of our core issues is the need to grow the Hundred Group’s profile
outside of our usual spheres of influence. Whereas we are well known in the UK,
and in particular to the DTI, Treasury and HMRC, we are less well known to
organisations such as the IASB or in Brussels.

Whether or not it will be a good year is always hard to say. However, by
addressing these issues we will be better positioned to deal with the challenges
we will face.

Philip Broadley is finance director of the Prudential and chairman of The
Hundred Group of Finance Directors

Institutes will find strength

While I cannot claim to have much in common with the late poet Lord Byron, I
think we both agree ‘the best prophet of the future is the past’.

The past 10 years have seen unprecedented change across the profession both
at home and abroad. Speaking as a general practitioner who has spent many years
advising and running small businesses, I suspect the greatest challenge in 2006
will remain the burden of excessive regulation and the impact this has on our
economy’s competitiveness.

As chairman of the CCAB, I believe the biggest challenge facing the
profession will be our ability to speak with one voice on the issues, which
effect our many members.

These challenges are not unrelated. From company law reform to the abolition
of the OFR, from debate over statutory audit thresholds to allowing smaller
entities time to prepare for international financial reporting standards – on
these and other issues we must be capable of speaking with one voice if we are
to influence and shape the policy agenda on behalf of our members.

Take the debate over tax simplification. On UITF 40, the CCAB’s collective
efforts saw the chancellor deliver a number of major concessions when he
delivered his pre-Budget report. We must continue to speak with unity if we are
to effect further change.

On the international stage, the debate over convergence of regulation,
governance and accounting standards is one the UK profession should continue to
lead. Governments, industry and the profession all have a vested interest in
ensuring the flow of transparent, high-quality financial information to
increasingly global markets.

The CCAB will need to exercise influence over the coming year to ensure the
right frameworks are put in place for the long term.

As individual institutes, 2006 will see us refocus on our core strengths as
professional bodies. The need to uphold the highest professional standards, to
provide business and financial education to the market, to ensure effective
advice and support to our members will define us as institutes both in 2006 and

Ian Morris is chairman of the CCAB

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