Richard Murphy FCA Calls Accountants Corrupt

 

The UK has been corrupted and accountants, lawyers and bankers are to blame https://t.co/i1Ev371kIx The corruption that is now normal in public life has its root in the belief held by so-called professionals that getting around the law is their public duty

— Richard Murphy (@RichardJMurphy) February 21, 2022

Badly drafted laws will always be legitimate targets for human ingenuity, it is not a sign of corruption that people look for ways and means within the law to reduce their tax bills!

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Accountants Led The Way From The Dawn of Civilisation

I always knew we accountants had a major role in improving the world! (SC) https://t.co/E07wQgjPBM

— Numbers (UK) ltd. (@NumbersUKLtd) June 12, 2017

What If?

David Bowie told guitarist Eric Schermerhorn: "I probably should have been an accountant. I don't know how this all happened."

— Graham Hambly (@PQMagazine) January 12, 2016

Accountant Needed

Accountant needed... pic.twitter.com/Kq641thp43

— LOL_Express (@LOL_Express) September 19, 2015

Can Accountants Be Trusted? - Misleading Debate

Economia has a rather misleading headline wrt a debate between Mark Spofforth, partner, Spofforths, and former ICAEW president and Ian Fraser, financial journalist and author of Shredded: The Rise and Fall of RBS.

The debate entitled "Can accountants be trusted?", aside from degenerating into a seemingly ill tempered slanging match, actually centres around the activities of large accounting/auditing firms rather than the activities and ethics of accountants per se.

A far more appropriate headline would have been "Can large firms be trusted?"

Next time economia might consider using the services of an invigilator in order to keep the debaters on topic, and calm.

Well Spotted Elaine

Kudos to my chum Elaine Clark for spotting the typo in the Telegraph article about bean counters.

Can you spot the error?

Ageism and Accountants - A Lack of Sagacity

Sage, as per the dictionary definition, means "having, showing, or indicating profound wisdom".

Hmmm, in a remarkable display of exactly the opposite, Sage (that has been "in the business of helping businesses manage their finances, people, customers and suppliers and to plan for future success since 1981") has decreed the following (as per AccountingWeb):

"The pace of change within the profession has accelerated and created an environment where ‘Generation Y’ accountants are best placed to respond to the changing role and demands, according to the latest Pulse research from Sage."

Who are "Generation Y"?

Thsoe born between 1980 and 1993.

Therefore, according to Sage, if you are an accountant and older than that you may as well give up now as your clients/employers no longer need or want you.

For why?

Seemingly clients and organisations "now expect a prompt response to their enquiries and access to information whenever they need it, with online being the most popular method for business owners wanting to share data with their accountant for the first time."

Clearly those born before 1980 are incapable of using the net, and are non responsive to client demands!

How is it I am able to run so many websites and interact in real time on Twitter etc (given that I am so very old?).

Paul Tooth, managing director at Sage Accountants Division, dug himself into a real hole by saying:

“The accountancy profession is changing. Our research is a strong benchmark for the industry and it suggests it is no longer enough for accountants to be numerically proficient. In this hyper competitive environment practice professionals are offering much more to clients and fulfilling multiple roles including, virtual FD, IT consultant, HR expert, marketer and payroll specialist. "

Based on Sage's "research" please could they explain to me where they think people can find a 20 year old (born in 1993) qualified "accountant" with enough real world experience to act as virtual FD, IT consultant, HR expert, marketer and payroll specialist?

I ask, because Sage itself is currently recruiting a Commercial Finance Manager Sage CRM Fixed Term Contract.

The qualifications required include "experienced in working in a multi-national environment Qualified ACA/ACCA/CIMA with at a minimum of 5 years' experience in industry".

Know any 20 year olds with that type of experience?

Whilst I think about it, given that 1980 seems to be a significant cut off date for Sage, Sage may care to worry about its own age given that it has been around since 1981.

On that point Brendan Flattery (CEO of Sage) needs to think about his position, as he is a qualified accountant born in 1964.

Ageism in business is an absolute disgrace, the fact that a "professional" company such as Sage appears to endorse ageism makes me wonder exactly whether these companies really understand the businesses which they claim to "serve".

Thoughts and comments from those in the profession who are over 20 years old much appreciated!

Gilding The Lilly

Five days ago I wrote about my surprise that Michael Izza had not commented on the potential £40M pension deficit in the ICAEW's 2011 accounts:

"for reasons that are unclear he does not say a word about the pension deficit of £40M that completely undermines that finances of the ICAEW, and is the tail that is wagging the dog of the ICAEW's drive for new members via its international "strategy".

How very odd that he doesn't mention it? "

It seems that I am not alone in believing that such a significant potential shortfall deserved more prominence. Kevin Reed is also of that view:

"MAKING FINANCIAL REPORTING more relevant and easier for to stakeholders to understand has been a long-running issue. 

Let's face it - when things go wrong there will always stakeholders up in arms as to why they'd not been able to predict such a terrible moment by reading the accounting runes. Conversely, there will be some clever sausage that looks in hindsight at the statements and figures to highlight that the problem's been clear all along.

As a non-accountant of the most severe kind - but as a journo with an interest in these issues - a couple of areas within the latest annual reviews from ICAEW and CIMA left me slightly perplexed.

Firstly, the ICAEW's pension scheme financial position has been valued by actuaries as in deficit of £40.1m at 31 December 2011, compared with the triennial valuation measured in 2010 at a deficit of £19.9m. This has the potential of forcing the ICAEW to stump up another £5m and review its pension funding plan. A fall in gilt yields is the main culprit behind the deficit's degradation.
Having traipsed up and down the pension schemes numbers - which spread across four pages - I admit to originally missing out the figure, which was included within the narrative section of the notes.

The deficit is mentioned twice within the institute's financial statements - in the review pages and again in its notes to financial statements. The ICAEW's summary of its position, the review, is online where the deficit is again flagged up.

The ICAEW told me that it is satisfied about the coverage afforded to the deficit, and its potential ramifications, within its year-end statements. Note the ‘potential', as the valuation itself was a ‘desktop' valuation, or estimate.

While I don't pretend to be able to pull out the institute's various pension scheme calculations through its statements of financial position (or balance sheet as I'd know it), particularly as ICAEW stakeholders are - let's face it - accountants, it still irks.

As a journo I'm not owed anything by the ICAEW. But maybe in the context of its members, and its role in making reporting as clear as possible, perhaps such an important ‘number' deserved more pronounced presentation.

And while on the topic, it also seems strange that CIMA feels it can't specifically reveal chief executive Charles Tilley's pay packet.

CIMA's annual review 2011 reveals its water consumption (3,400 cubic meters), but not the salaries of its senior management.

Some details are contained within the financial statements, but these are anonymous. We know that the highest paid executive's dosh has moved from the £210k-£220k bracket to £220k-£230k between 2010 and 2011. Is that Tilley? Dunno, assume so. Has ‘his' pay gone up from £220k to £220.1k, or £210k to £230k? A 100 quid or twenty grand? Dunno.

The average CIMA staff salary (wages + NI) fell to £33,349 from £36,224, with total staff numbers up to 426 from 369.

And of course, you're dying to know, the ICAEW does state their executives' pay. Chief Michael Izza earned a total of £477,000 - £372,000 in salary and £105,000 in ‘deferred variable pay', or performance-related pay."

My thanks to Kevin Reed for his Tweet following my publication of this article:

"Kevin Reed ‏@Goonerreed

Hat tip to Ken for flagging up the #icaew pensions data in 1st instance. Will add to my copy"

Cameron Lambastes Accountants Again!

I see that Cameron is lambasting accountants again:

" David Cameron has warned that the Coalition risks being seen as a “bunch of accountants” unless it “focuses on what matters” in the wake of last week’s dismal local election results."

It looks like the letter from Michael Izza was not enough.

As I wrote a few days ago:

"Izza should not be too surprised at the barracking about tax avoidance and accountants from Cameron, Osborne and their ilk. Their background means that their financial affairs are handled by trusts and (ironically) accountants. They have no real world interaction with HMRC or the "mundane" daily matters of the finance that the rest of us have."

Maybe an open joint letter from the UK's leading accounting bodies is required, or maybe Cameron's accountant should simply go on strike?

I have Tweeted @Number10gov to tell him to stop this nonsense, I suggest fellow members do the same and make #accountinggate a trending topic.

Topless Accounting

Washington State accounting firm Schuyler, Fishbein and Kleinwort have decided to market their business by having their female accountants give clients topless sessions for an extra $50 per hour plus tips.

That is 50% higher than normal hourly rate of $100, seemingly some clients have been willing to pay for the extra service.

I can't see the ICAEW endorsing that approach to marketing here.

The Accountant's Song

A little light relief for the Bank Holiday weekend!

My thanks to Pete McLaren for giving me permission to reproduce "The Accountant's Song" from his site Idiot Husband's Blog.

The following words fit to Lily Allen’s – The Fear

The Accountant's Song

I’ve passed my exams and I’m now fully ready,
To be an accountant but I’ll keep things quite steady.
I’ll wear business clothes and do things right and proper
I’ll follow procedures to avoid a show stopper.

I’ll keep to the budget, I won’t take forever,
I’ll not use a taxi, I’ll walk in all weather
I’ll hand in reports and my boss will just love them
I’ll bend over backwards for clients to help them.

CHORUS
John Majors my hero, he’s so cool.
He left the circus he’s no fool
He’s an accountant, he’s a, star
He chose the best profession by, far.

At the weekend I’ll go out let my hair down,
I’ll hit the clubs with my friends when we’re in town
I’ll put on my make-up, make sure not to smudge it,
And of course when I’m out I’ll stay well within budget.

Some of my friends think accountings a bit sad,
They’re talking stupid, according to my Dad.
He says they know nothing and they spend too much money.
When their card bill comes in, that’s when they start to worry.

CHORUS
I know what’s right and what’s wrong,
Accounting is where I belong
When will my friends see the light?
Agree that I’ve got things right.

There are times when I dream about fast cars,
Or of living the life of those Hollywood film stars.
But I’m an accountant and I earn not bad money,
In the summer I might go somewhere quite sunny.

CHORUS
I’m an accountant, I do my best, all the time.
I’m ambitious which is not a crime.
My partners an accountant too
Being an accountant could be right for you

Exit Edward The Accountant

The early departure of Edward Hunter (the accountant) from episode one of The Apprentice may, on the face of it, disappoint those in the profession.

However, it should be noted that Edward (for reasons best known to himself) neither used any of his accounting skills, nor did he profess any "regard" or "self esteem" for being an accountant.

Not everyone is suited to the profession.

However, to reject the skills and knowledge garnered from years' of hard work and exams is surely akin to throwing the baby out with the bath water?

Like it or loath it, if you have managed to qualify as an accountant then use those skills and knowledge to your best advantage.

Average Salaries £82,400?

According to the survey carried out by the ICAEW and Robert Half, the average salary of an ACA is £82,400 and the average bonus is £17,400.

Am I alone in thinking that these numbers seem to be on the high side?

Who actually has time to complete these surveys?

Doomed To Failure

I agree with Damian Wild when he says that the campaign to "prevent unqualified accountants, tax and financial advisers providing services unless they have professionally recognised qualifications" is doomed to failure.

As he says:

"What do you do with the thousands of unqualified accountants who have offered sound advice for years?

Do the institutes offer an olive branch and a grandfathering scheme?

Or simply cast them adrift?

Who would oversee a new regime?

The Financial Reporting Council sees it as impossible to police and expensive to coordinate. So who would do it?"

The experience, quality, qualifications of the accountant and the professional body to which he/she belongs should guide the seeker of services to make a well informed choice as to who should provide their accountancy services/advice.

We do operate in free market, don't we?

Who Pays?

Paul Boyle, CEO of the Financial Reporting Council, has waded into row over the registration of the term "accountant" and proposal by the ICAEW to stratify the profession.

He suggests that the idea has not been thought through.

Boyle is quoted in Accountancy Age:

"It would be very interesting to see what cost benefit analysis the institutes could produce on this proposal. By definition they can't have power over non-members, so who is going to do this, and who is going to pay for it?".

I can certainly answer the "who is going to pay" part.

The members of course, via higher subscriptions!

EC Books Failed For 13th Year Running

Accountancy Age reports that the European Court of Auditors has refused to sign off the European Commission's books for the 13th year in a row, citing a "lack of supervision" and "irregularities" in its accounts.

The audit did not unearth any major fraud case. However, it noted that some of the EU's farm subsidies and aid for development of poor regions had/may have gone to ineligible people.

Quote:

"The most frequent errors were claims for illegible expenditure and failure to carry out tender procedures as well as a lack of evidence to support the calculation of ... costs involved."

This humiliation could not come at a worse time for the EC.

Marta Andreasen, the former chief accountant of the European Commission, has said she is up against a "mafia" in the Commission whose aim it is to frighten off whistleblowers.

Andreasen lost her appeal against her dismissal by the EC last week, but that said she plans to appeal that judgment too.

Andreasen was suspended by the Commission in 2002, and was later sacked after exposing failures and weaknesses in accounting procedures.

As if by strange coincidence the ICAEW has invited Siim Kallas (Vice President of the EC in charge of administration, audit and anti fraud) to address a meeting at the ICAEW on 26th November.

The meeting is being organised by the ICAEW (co hosted by CIPFA) to promote "improved understanding of the Commission's accounting and auditing process".

The meeting also aims to:

• Consider objectively the progress made by the Commission in reforming internal accounting and auditing process



• Elicit an exchange of views on how public and private organisations deal with qualified accounts

It might prove to be an "interesting" event!

Given the ICAEW's current predilection for globalisation and co-operation with international professional bodies (despite an internal structure of governance that resembles a Victorian trading association) now would be a good time for the ICAEW to sally forth into Europe, and offer to train those in the EC who hold the purse strings, and have responsibility for spending our money, in the basics of accounting and financial reporting.

AIA Accountant of The Year

Following on from my earlier note, about being nominated for "Accountant of The Year" for The Association of International Accountants (AIA), you may be interested to know that I have made it through to the finals.

Ken

AIA President's Awards 2007

Congratulations to the finalists and to all those who were short listed. Winners will be announced at the President's Dinner on 21 November 2007.

AIA Accountant of the Year

Finalists
Ken Lever, Helen Weir, Ken Frost.

Short listed
Ken Lever, John Griffith-Jones, Helen Weir, Jon Symonds, John Connolly, Ken Frost.

Criteria

An award designed to recognise organisations' accountancy stars. Firms, businesses and institutes are encouraged to make nominations, though individual entries are also welcome. Open to all qualified accountants whether in business, practice or public services.

• Nominees must have demonstrated sound judgment, technical skill, innovation and leadership ability.


• Nominees must have demonstrated dedication to clients.


• Nominees must stand out from their colleagues as an accountant who has made significant impact, taking into account the length of their career in accountancy and any notable obstacles they have had to overcome.


• Nominations should include any work related activities undertaken and broader contribution to the profession.


• Nominations should include their contribution to the community.

Source AIA

The two other finalists are:

Ken Lever

Finance Director Tomkins plc
Age: 52

Appointed to the Board of Tomkins plc in November 1999. He is a non-executive director of iSOFT Group plc. He is a Chartered Accountant and a member of the ICAEW Financial Reporting Committee and Chairman of the Hundred Group Financial Reporting Committee. He has held executive directorships at Albright and Wilson plc, Alfred McAlpine PLC and Corton Beach plc and was a partner in Arthur Andersen.

Helen Weir

Group Finance Director Lloyds TSB

Joined the board in 2004. Group finance director of Kingfisher from 2000 to 2004. Previously finance director of B&Q from 1997, having joined that company in 1995, and held a senior position at McKinsey & Co from 1990 to 1995. Began her career at Unilever in 1983. A non-executive director of Royal Mail Holdings and a member of the Accounting Standards Board. Aged 45.

A Competitive Advantage?

The ICAEW launched its new advertising campaign this month.

The campaign underlines the value of chartered accountants to business for employers, training organisations and potential trainees.

The headlines used in the campaign, 'A Cut Above' and 'A Competitive Advantage', emphasise (in the words of the ICAEW) the benefits that the ACA qualification provides as a benchmark of the highest professional and ethical standards.

Does this mean that the ICAEW have finally accepted the argument that I have been making on this site, for almost three years, that a merger with a non CA body would dilute the brand?

It would seem that they have accepted that argument.

Otherwise, were they to try to foolishly push another merger attempt with eg CIPFA or CIMA, the words of their own advertising campaign would be thrown back at them.

The Unloved Season

Much like the depressing and inevitable return of an unloved season, the ICAEW are proposing to increase subscriptions again this year.

This time they want 4%, the CPI is currently at 3%.