How to improve the accounting profession?

Should there be an overhaul of the accounting profession?

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I am a student writing a thesis on professionalism in the accountancy profession. What suggestions do AWeb members have in relation to improving the profession? Subjects i am considering are audit failures, big four, sole practioners without qualifications/membership/experience , role of regulatory bodies, ? 

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By Tim Vane
19th Jul 2018 14:58

Yes all of those. Audit failures, big four, sole practitioners without qualifications/membership/experience, regulatory bodies. Get rid of them all and things will definitely improve. Also, to really shake things up, put debits on the right.

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Replying to Tim Vane:
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By CSanton89
19th Jul 2018 15:20

Tim Vane wrote:

Also, to really shake things up, put debits on the right.

*spits drink out... Not debits on the right!

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By Mr_awol
19th Jul 2018 16:57

Tim Vane wrote:

Also, to really shake things up, put debits on the right.

Would that mean we would have to reorganise the office furniture too?

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Replying to Tim Vane:
Tornado
By Tornado
20th Jul 2018 09:18

As I was taught, debits always go on the side of the windows in the classroom.

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By Jimess
20th Jul 2018 10:59

Yep - Debit the window, Credit the door was my accountancy tutor's mantra.
Not sure how that works at the moment though - the window is directly in front of me!

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By Portia Nina Levin
19th Jul 2018 15:30

Overhaul is one word. If you don't believe me, on account of doubting my credentials, look it up in a dictionary. Might be a useful point for your thesis.

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By Accountant A
19th Jul 2018 15:34

My views expressed through the medium of popular song:

https://www.youtube.com/watch?v=ESy-Z8vqMrE

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By emmablyth
19th Jul 2018 16:16

hello Accountant A

thank you for your reply but apart from being a good song, please explain how you would ‘rip it up and start again’?

I would be interested to know what those members of ICAEW, ICAS, ACCA and other professional qualifications and memberships think and any intelligent suggestions?

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By alan.rolfe
19th Jul 2018 16:09

Think about the conflict of interest between the company paying for the audit/accounts and the users of those accounts who rely on the audit being impartial.

It may be worth researching how a lack of suitable staff and difficulties in recruitment may affect audit quality.

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Replying to alan.rolfe:
Flag of the Soviet Union
By thevaliant
19th Jul 2018 22:42

If anyone actually read the audit report, they would realise this. It says, in black and white, that no one except the shareholders can place reliance on this report.

And the shareholders? Well, they can't either. Caparo Industries got rid of them as able to sue as well.

So no one can rely on it. No one.

So you can write what you like (though its best to write a clean audit report - rather than the cricket scores) and no one can do anything.

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By thomas34
19th Jul 2018 16:53

You and everybody needs to recognise that the professional bodies can only survive by maintaining their income from membership fees. These fees clearly come from existing members and new members replacing former members who have died/retired/decided to "jump ship" (like me).

New members have to pass the examinations as a prerequisite - there are other criteria for certain disciplines but let's park those for now. The bodies know how many new members they need to maintain their fee income so pass marks will vary from year to year - in theory if the standard of students is poor there should be fewer new entrants but all the bodies do is reduce the pass mark i.e. dumb down the process.

This policy is not confined to the accountancy profession - the standard of solicitors (even at partner level) is appalling compared to 30 years ago. My experience of newly "qualified" accountants is that they know "jack ****" compared to my day.

This should give you some food for thought - good luck with the thesis.

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By Maslins
20th Jul 2018 09:39

To my mind the institutes are heavily reliant on a couple of things:
1) it is true that getting the qualification is a great way to demonstrate ability in the early part of your career. Unlike having a degree, being a qualified accountant does mean you can basically walk into a bunch of jobs.
2) further on in your career, reality is you don't need it anymore, as the experience dwarfs the qualification (same way when you're 30 nobody cares what GCSEs you got, unless that was the peak of your achievements). However, giving it up seems a big step. What if you regret it next year. Your parents might disown you as they were so proud to have a chartered accountant in the family etc.

(1) means there's always a big pool of new entrants, (2) means even though value is poor compared to cost, not many people leave.

Owning/running an institute is a good business!

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By Ranse
19th Jul 2018 17:37

Everybody is an accountant these days , so perhaps exploring a better name for accountant that is protected might help.....hahaha

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By emmablyth
19th Jul 2018 19:16

Thanks, that is a good point. It is interesting that anyone can call themselves an accountant but not Auditor, Insolvency Practioner or Financial Advisor. Should Accountant or Tax Advisor also be protected?

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Replying to emmablyth:
By Tim Vane
20th Jul 2018 00:35

emmablyth wrote:

Should Accountant or Tax Advisor also be protected?

Nah, you should be allowed to hunt them for their skins, or even just for fun. There are so many of them now they need culling. Bagged me two ACAs and a real big FCCA the other day.

The gov'ment is experimenting with MTD in the hope that it will wipe out some of the slower ones.

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By Jdopus
20th Jul 2018 09:57

One of my personal issues is that I feel our professional bodies don't really give a damn about the majority of their members and are essentially a captured regulator who serve solely the interests of the big four.

The amount of money the big four throw around and the amount of influence they can exert on the professional bodies is totally out of proportion to the actual number of accountants who work for the big four. In my opinion none of the institutes pay any real attention to any of their members who aren't part of the big four or at least the major companies following along behind the big four, like BDO and Grant Thornton. They have long abandoned any pretence at actually regulating these large multinational companies, since the companies themselves are far more powerful and influential than any of these bodies.

They essentially serve as cheerleaders and PR branches of the big four at this point.

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By Justin Bryant
20th Jul 2018 10:02

Yes, re Big 4 auditing problems it's all about the monopoly & conflict of interest. Re the latter, why do you think public auditors are always qualifying accounts (e.g. HMRC accounts) and the Big 4 hardly ever qualify accounts? I know public bodies are badly run etc., but so are a lot of private businesses including the Big 4 - as borne out by these very same audit failures.

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Flag of the Soviet Union
By thevaliant
20th Jul 2018 12:37

I like audit reports. They always have to CLEARLY state 'INDEPENDENT AUDITORS....'

As though writing 'Independent' means you are.

When an auditor is anything but.

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By Tax Dragon
21st Jul 2018 11:22

May I suggest you come at the subject with an open mind? Research first, theorise second.

Based on some of your comments on other threads, you seem to think having a public register would magically right all wrongs, but this seems to be to prescribe the medicine without diagnosing the condition.

Although... you do seem to see a lot of wrongs. Do you think (have you researched whether) they were always there historically and, if not, what has brought them about? Would it have been any different had there been a public register and how would your medicine improve things now? What's your evidence? Is there a better remedy?

Coming at it from a completely different angle, do you think good businesspeople use bad accountants?

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ALISK
By atleastisoundknowledgable...
22nd Jul 2018 09:17

“...do you think good businesspeople use bad accountants?”
Good point and I agree, but it’s the bad businesspeople using bad accountants that makes the SME market worse and gives rise to negative press for the industry.

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Replying to atleastisoundknowledgable...:
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By Tax Dragon
22nd Jul 2018 10:16

Ok, I don't want to get too involved. It's emma's thesis and she needs to think for herself. But if you drill down a bit into what you just said, is it the bad press, the bad accountants, or the bad businesspeople that make the SME market worse? Specifically, if the bad businesspeople hired good accountants, would all the issues go away? That seems to be emma's basic premise; is she right?

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By Maslins
23rd Jul 2018 10:47

Tax Dragon wrote:

Specifically, if the bad businesspeople hired good accountants, would all the issues go away? That seems to be emma's basic premise; is she right?

Nope. You can lead a horse to water, but you can't make it drink.

Bad businesspeople (and by "bad" here I'm meaning can't keep on top of the bookkeeping side, they may be brilliant at marketing/whatever) will either have bad accountants that stick with them, and some gibberish is submitted each year. Or, they'll consistently go from accountant to accountant, with them probably repeatedly slagging of said accounts because they refuse to accept it's their own fault things are a mess.

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