Tuesday, May 25, 2021

The Compulsory Membership Conundrum


 

AccountancyAge reports that research demonstrating the overwhelming support of MPs for introducing compulsory accounting membership has divided the opinion of industry bodies, including the Institute for Chartered Accountants (ICAEW) and the Association for Accounting Technicians (AAT).

In May, the AAT published the results of a survey it commissioned to YouGov, revealing that 78% of MPs would support increased regulation of high street accountants and tax advisers. The body is campaigning for compulsory membership to become a legal requirement.

“Mandating professional body membership provides a ready-made solution. There’ll be greater reliance on the support and guidance we can provide to our members, but also that commitment to the maintenance of high standards,
” says Adam Harper, director of professional standards and policy at the AAT.

Unregulated advisors make up a third of the sector, and two thirds of its complaints regarding compliance and reporting errors stem directly from this demographic, according to HMRC data.

“When things go wrong, this will give us a mechanism to investigate and impose relevant sanctions against those that fall short of the standards we expect.”

The MP survey follows a separate AAT study published in April. It found that, out of more than 1,000 respondents, 59 percent said they were unaware that no professional or formal qualifications were required, and 57 percent thought that membership should be mandated.

But ICAEW practice director Amanda Digne-Malcom argues that the industry may be too far gone to make such a seismic change.

“Once you’ve got that legacy, sometimes it’s hard to turn that. If you sought to make a change, you run the risk of putting some people at a disadvantage.

“You’ve got a whole cadre of people who are accountants and earning a living from it, who are not from a professionally qualified background. I think the perception would be that it’s unduly harsh.”

Digne-Malcolm also acknowledges industry trust as a key element of these proposals, but notes that professional membership can’t be viewed as the only criteria for attaining this.

“If you’ve had rigorous training and you’re subject to monitoring, that contributes to the trust agenda. But that doesn’t mean to say that anyone who doesn’t fall under that can’t be trusted – I absolutely don’t believe it can be that black and white.”

Were compulsory membership of a professional body to become mandatory, the key issues would be:

1 Which body was the best?

2 How much should each body charge?

3 What extra costs would be levied (and passed on to the hapless membership) by the government for regulation and control?

4 What happens to those people already practising but not members of any professional body?

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Friday, May 21, 2021

ICAEW Members Castigate ICAEW

 


On my HMRC site I have noted that the ICAEW have given HMRC a well deserved kicking for its appalling service levels:

"ICAEW members are reporting that poor performance is being experienced across almost all HMRC services and ICAEW has been pressing for greater transparency about the problems being experienced and for a clear recovery plan. The Tax Faculty outlines the problems that have been raised and the action it has taken..."

However, the membership of the ICAEW are also pissed off with the ICAEW over its light touch towards HMRC failures. 

As per AccountingWeb:

"However, many in the profession have expressed the view that these are ongoing problems date far beyond the events of the pandemic.

None of this is to do with Covid, but it shows what happens to a system which is already broken when you give a huge kick, it just fragments and shatters,” commented AccountingWEB member irealyshouldknowthisbut.

“Covid-19 has provided the ultimate excuse for poor customer service to get even worse across much of the public sector and throughout the banking industry. We now see more clearly than ever the contempt in which we are held by these incompetent bullies,” added another member.

ICPA chair Tony Margaritelli concurred: “We hear that they value the work that agents do, but we don't actually see any real genuine evidence of it,” he told AccountingWEB. 

According to Margaritelli, the fact that ICAEW chose to publicly report on HMRC’s poor performance is significant in showing that people should be holding them to account more.

“They very seldom do [criticise] - they’re always very supportive, and rightly so,” he said. “But on both sides, when things are not right they need to be called out.”

Nicholas Smith, head of tax at Duncan & Toplis, concludes that enough members must have complained for the Institute to make such a public stance. “The one genuine bright spark that HMRC did was to have the agent dedicated helpline. And suddenly here we are two years down the line and we still haven’t got it back.”

It is a pretty poor reflection on the ICAEW that it needs a groundswell of negative comments from its membership to actually say something in public mildly critical of HMRC! 

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Wednesday, May 12, 2021

The Halcyon Days of Internal Audit


 I miss my time running an internal audit department, when I would refer to myself as "we" when writing internal audit reports.

Halcyon days!

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