As I write this article the drumbeats of war grow louder and it feels somewhat surreal to discuss our professional standards and their regulation against that background. However, it is perhaps still important, while any war will hopefully be shortlived, as our standards will remain long after any battle-scars have healed.
As the accountancy profession, we set and uphold the financial morals of the business world, but have suffered a series of highly publicised body-blows in recent times. How to rebuild public confidence and trust is exercising many great minds, with considerable diversity of opinion what will or who can improve matters. Is the root cause of our problems within smaller or larger practices, or amongst our qualified brethren in plc businesses? Let us consider these sectors.
In recent years, downsizing has become a feature within a declining UK economy, resulting in the emergence of large numbers of business start-ups. Good news for smaller practices thriving on the growing support services they provide to these emerging businesses. At this level our charter – Professionalism, Integrity and Ethics (PIE) – is relatively unsullied by the fallout from plc scandals.
For practitioners, reaffirmation of standards has been underway for some time through the introduction of ‘whole firm regulation’ or practice assurance.
In the English ICA, which is yet to approve its practice assurance scheme, early proposals were mandatory and inflexible having been designed to fit the biggest firm, hence largely unacceptable to or unattainable by sole practitioners, many of whom despaired and started to look for the door marked ‘Exit’!
But strengthening the development team with representatives drawn from the General Practitioner Panel and the newly named SPA (the Society of Professional Accountants) should see a flexible and practical system emerge from the further work remaining.
It is vitally important the English ICA gets this assurance scheme right, taking the necessary time and care to introduce a highly finished product that we can all endorse, and that may in years ahead become an international standard for all professional practitioners.
Thus it appears concerns should be more about larger practices and, in particular, qualified accountants in plcs, who would do well to revisit their PIE charter if we are to see the elimination of corporate greed and aggressive accounting practices seemingly sanctioned by professional complicity, leading to fraud on a massive scale affecting thousands of innocent employees, pensions and small shareholders alike.
While reassertion and regulation of standards within plcs is long overdue, this has barely started and to date appears unconvincing; it seems imperative that qualified accountants in business be drawn into this moral crusade as, without their inclusion, much will be written but little achieved.
We may conclude that any slippage in accountancy standards is uneven across our profession, but it appears all of us will have to go the extra regulatory mile in the hope sustainable improvement can be found to restore waning public confidence.
- Peter Mitchell, chairman, the Society of Professional Accountants.
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