Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

IFRS: It’s business as usual for accountants

by
9th Feb 2010
Save content
Have you found this content useful? Use the button above to save it to your profile.

Eric Anstee, chairman of the Institute of Financial Accountants, speaks to AccountingWEB.co.uk about IFRS for SMEs, accountancy body mergers and why the term ‘accountant’ should be protected.

The accounting profession proved it wasn’t immune to the effects of the recession last year, as the average growth rate of the world’s largest accounting networks contracted by around 5 – 6%. The increasingly competitive professional landscape has left many commentators wondering how this will affect progress towards IFRS adoption, a question AccountingWEB.co.uk put to Eric Anstee.

 “Last year the profession showed its mettle in the way it responded to the downturn and addressed issues such as going concern, etc. This year is likely to be a very busy year for the profession, not least because in the UK we’ll see the launch of IFRS for SMEs. The profession has a major role to play in affecting governance and corporate risk”, he said.

He also pointed out that while IFRS is slowly being adopted globally – Japan is the latest country to converge – the major slowdown has been in the US. Getting America on board is a worthwhile programme, argues Anstee, but the big challenge this year will be in the UK.

“IFRS hasn’t really been rolled out to the mainstream corporate – it’s been there for the very big listed companies but it hasn’t really affected the majority of SMEs. That’s the big challenge – to get UK GAAP coverged with IFRS for SMEs and getting people to understand what it means and what changes need to take place”.

“There’s a whole series of new IFRSs for the profession to cope with – the biggest one is in relation to business combinations, which will be important for anyone working with acquisitions. The provisions kicked in during the middle of last year, but of course people will need to get to grips with it this year for reporting purposes”.

The urge to merge
Post recession, accountants remain cautious but are starting to redress some of the old debates in a new way. One idea being revisted is that of mergers between accounting bodies – but this time Anstee is more cautious. In his previous position as chief executive of the ICAEW, Anstee was the architect of a proposed merger between the ICAEW, CIMA and CIPFA. The tripartite proposal broke down after CIMA pulled out and the idea was met with ambivalence in a subsequent vote among ICAEW and CIPFA members.

In light of the events of the last 18 months and renewed focus on cost cutting in general, could the idea of a merger be floated once again? “I think the need to merge is still very much there, but my personal view that there are still major obstacles to that”, says Anstee.

Chief of these, he explains, was a lack of understanding by the bodies and their members about how such a merger would work. The idea, he says, was to keep the qualifications and areas of expertise separate, but to merge the back office functions which would offer valuable cost savings. “Keeping qualifications separate was always the plank of our thought process – you want to keep them distinct because they’re different marketplaces”, he explains.

One thing is certain, however, in Anstee’s eyes: “There are too many accountancy bodies in the UK. The duplication of costs is enormous”. The idea may not have been met with approval the first time round, but perhaps given the profession’s experiences of the last year and half, the issue may be up for discussion again.

The great unqualified debate
The recession also brought with it a surge in unqualified accountants hawking for trade – an issue that’s been met with contention by the accounting community in the past.

“HMRC has been helpful by saying that it wants accountancy to become a registered profession. Ideally what everyone wants is for the term ‘accountant’ to be protected in the same way that the term ‘soliticor’ is. I have some sympathy with that view – particularly since the government has never really explained why it refuses to even consider it”, says Anstee.

As the chairman of a professional body himself, one might expect Anstee to be vehemently anti unqualifieds, but it’s more complicated than that, he says. “I think there’s room not just for CCAB bodies but also for tiers of qualifications leading up to the CCAB - but they have to be put into a proper framework so that it can be properly monitored”.

 

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.