RSS feedsDo accountants and other professionals deserve the trust invested in them? That’s the question posed at an Accountancy Age web seminar, sponsored by the Chartered Insurance Institute and ACCA, earlier this month. Survey after survey in recent years has shown accountants lead the professions when it comes to client trust.
But that dominance is slowly being eroded as the market for professional
advice grows ever more crowded and opportunities in the current economic
environment more limited. And if accountants are suffering, other professions
are being squeezed too. At the same time, anyone can call themselves an
accountant.
The nagging question is in the 21st century does professionalism still matter?
And should the term accountant be protected?
Should the term accountant be restricted to qualified professionals?
Richard Aitken-Davies, President of the Association of Chartered Certified Accountants
The term accountant should be protected in the same way as the term solicitor or doctor is protected. There should be a regulation to that effect. And we are making representations – not just the ACCA but all the CCAB bodies – to try to get the law changed to achieve that.
As well as that systematic campaign to try to persuade government this should be the case and the recent early day motion, there will be other activities we will be undertaking in order to raise public attention to the fact that the term isn’t protected. We want to emphasise that clients should be very careful in selecting a professional adviser to go to somebody who is a member of the CCAB bodies and not to an unqualified practitioner.
It is something we and our members are very concerned about and, as an association, we want to pursue the matter to see if we can get the law changed to give that protection.
One of the things that I think will help to change attitudes and overcome some of the difficulties is really informing the public about the difference between professional accountants and unqualified accountants. The CCAB is giving attention to this as to how we might work together as professional bodies to get the message over to the general public that there is a significant difference and to understand what those differences are. Then they will appreciate why they, if they require the services of an accountant, they should go to a professional and not an unqualified person.
Why should it change?
Kathryn Britten, Head of BDO Stoy Hayward’s Forensic Accounting Unit
One of the problems is that people don’t often realise that if they go to someone who is not professionally qualified exactly how much it does cost them. There is a huge range of different types of accountants out there and it is very much horses for courses. You can go to a small firm, you can go to somebody inside or outside of London.
Most members of the public can find an accountant that will be right for them and at the right cost. But if they go down the route of using somebody who is not professionally qualified, somebody who perhaps hasn’t got that wealth of experience and expertise and perhaps hasn’t gone through the proper training that we have all been through, they may incur cost that they will never even realise.
They could end up paying a lot more tax than they would normally or, if they use someone like me as an expert witness, they may end up in a situation where they pay out in damages in a claim or they receive less but they will never necessarily know that.
It is important that people know that when they go to someone who calls themselves an accountant they are a qualified accountant and they will give them what they are buying.
I haven’t actually had people come to me and say they have used someone who wasn’t a qualified accountant. I have had people come to me and say that they’ve used accountants as expert witnesses who are highly experienced and qualified accountants but hadn’t actually gone through the process of training and learning to become an expert witness. It is actually a completely different skill or it is an additional skill that you need.
You have expert witnesses in all sorts of fields. To assume that you could necessarily go into that job because you are qualified in a particular profession is wrong and it is important for people to understand the need to have that extra training and extra qualification behind them.
I think trust is really at the root of it and when somebody comes to a professionally qualified accountant they are looking for somebody they can trust in a number of different ways. They need to trust that person to be objective – sometimes they will be giving them bad news as well as good news. They need to be able to trust that person to give them value for money as well.
Does this appeal for protection exist in other professions?
Lord Hunt of Wirral, President of the Chartered Insurance Institute
We have been issuing in the CII a series of think pieces and position papers where we’ve been advocating, for example, that there does need to be an independent professional body for the insurance industry.
As to the extent to which you establish a restrictive practice, I think we have to be quite careful, wearing my hat now as a parliamentarian, because there are arguments both ways.
The most important thing though is the public interest and the public protection that comes from seeking the advice from someone who is supported by an independent professional body.
For instance, if you go to a solicitor, you know that, if something goes badly wrong, if you just happen to pick the wrong person who has sadly committed a criminal or fraudulent act, your money is secure because every other solicitor pools money through the insurance industry professional indemnity insurance scheme.
You can sue for a mistake, but if you’re money has been lost because it is no
longer in your client account, you are guaranteed the return of that money from
the professional body. They underwrite the return of that money. So there are
all sorts of protections that flow and I suppose in a way these are the
responsibilities of the profession in return for the right to have this
privileged title. It’s a debate to be had and I rather welcome the fact that
accountants are pressing for this debate to
take place.
It’s important to remember there have been some setbacks, so far as the all
the professions are concerned, because you always get some difficult situations.
In insurance we have had some difficult situations and that is why I say the
answer is professionalism because, the more you persuade people that you are
truly professional, that you subscribe to the highest possible standards, the
more they trust you.
But we would be blind if we didn’t recognise that there had been scandals in the past which have beset all the professions.
When you have a poll among the public asking which people they trust the most, some of the professions do not come off well. Of course, sadly, I am not only a member of the legal profession but I also write articles so I’m a journalist and, above all, I’m a parliamentarian, where I’ve been for over 30 years. When there is any league table of those people who are trusted the least I am afraid politicians do tend to top the league table.
How can an accountant convince new clients that it is better to be with them than an unqualified accountant?
Fiona Hotston Moore, Partner and Head of Mid-Capital Markets & Technology and Media & Telecommunications at Mazars
I think the fact that we subscribe to a code of ethics, that we have a professional body that regulates and requires us to have continuing professional qualifications and that we belong to a profession with a certain reputation should be convincing.
Normally I would ask my clients to give me references. I would give clients three or four telephone numbers they could call and find out how they found the experience of working with me and with the team.
Over the years I have taken on a numbers of clients who have used unqualified accountants and who have had issues. They are quite often very surprised when they realise that the person who has been acting for them for the last two or three years was not qualified. They have gone along with the brass plate on the door that says accountant and they have assumed that that person is a qualified accountant.
Unfortunately, when things do go wrong and they have issues and maybe they have got an enquiry into their tax affairs or have a very large tax bill that they didn’t expect, they think they can get hold of the institute.
If that person is not a member of the institute – and they probably don’t have professional insurance – it is very difficult to sort those problems out for that individual.
So I thoroughly endorse doing something with the term accountant to make it very clear what it actually means and what someone is required to adhere
What is professionalism?
Lord David Hunt
Reputation is very difficult to define just as professionalism is. We all know that you build up your reputation over a lifetime of commitment, but you can actually lose that reputation overnight, so it is something you really do have to work at to build up. It is not just about passing exams professionalism is much wider, it goes to the heart of everything you do and the way you behave, your code of ethics, the way you treat the customer, the consumer, the client putting their interest right at the heart of everything that you are doing, so it is an attitude of mind as much as passing examinations.
Are accountants trusted?
Richard Aitken-Davies
Members of our professional body and other professional accounting bodies have undertaken a better standard of training both in practical terms and examination terms and have maintained their qualification through compulsory CPD. They then have to perform in their jobs and their careers depend on it. A concern of our members is that there are a number of people out there that are calling themselves accountants that are not professionally qualified. Some of them are probably doing a half reasonable job but an awful lot of them are not measurig up.
The panelists
Richard Aitken-Davies is president of ACCA. During an extensive career in industry both in the UK and US, he gained a wealth of experience in public and private sectors including senior executive roles in Powergen, Railtrack, London & Continental Railways and the Central Electricity Generating Board. During a period working in the US, he had responsibility for implementation of the provisions of the Sarbanes-Oxley Act.
Kathryn Britten is head of BDO Stoy Hayward’s forensic accounting and dispute resolution team. She has 30 years’ audit and accountancy experience, including more than 15 years’ forensic accounting experience. She worked on high profile professional negligence matters such as the Maxwell and Barings cases and is also a member of The Academy of Experts.
Fiona Hotston Moore is a partner with Mazars. Within the firm she has managerial responsibility for the mid-corporate market in London which provides audit, outsourcing, VAT, payroll, secretarial and regulatory compliance services. She is the current Women in the City Woman of Achievement in the Accountancy Sector.
Lord Hunt of Wirral is president of the Chartered Insurance Institute. Between 1979 and 1995 he was a member of the government, including cabinet posts. He is currently chairman of Beachcroft Consulting and chairman of the Financial Services Division of Beachcroft. The theme for his presidential year is the promotion of professionalism in insurance and financial services.
