When I first read James Governor’s post entitled The Cult of The Professional/The Long Tail of Authority I was aghast. Who could possibly assert:
As budgets are repeatedly slashed (we can’t afford to actually audit those accounts!) authority dissolves and ethics collapse. The grassroots pro-am revolution didn’t create these problems, its filling a vacuum…What are professions? I would argue they are a relic of economic scarcity
I am not going to cover all the potential arguments but instead restrict myself to the very narrow area of what this assertion means to professional services people and accounting types in particular.
First, it saddens me that our profession should be regarded in such low esteem that James feels he can legitimately make these assertions. If he is representative of only a small fraction of those who use our services then we’re in BIG trouble. That’s why his words demand a comprehensive rebuttal.
The cause and effect James proposes makes no sense. Neither does his assertion. At least not to this professional. I’ve seen no evidence to show that budget cutting leads to a reduction in audit quality and neither do I see a correlation between the two. Audit fees have gone up the last few years. Here’s an example reporting from KPMG. The same pattern is repeated among the other Big Four. If anything, critiques on audit quality issues have increased so if there is any relationship at all, then it would seem to be inverse.
However, I do see a connection between audit failure and a reduction in confidence. That’s not the same thing as authority. I’ve long argued that the continuing stream of bad news, especially from the Big Four is bad for the profession because it undermines confidence. Yet I see they rank top in the overall professional services league. Whether that’s a temporary aberration or a long term trend is yet to be discovered. But there is no disputing the fact that size matters to many organisations. And size is a component of authority. If it were not so then SAP would not be considered a leading software provider with an authoritative position in critical areas of ERP. How else does Gartner continue to generate $1 billion plus revenues even though it seems less relevant to the socially constructed world which is emerging other than through its perceived authority in the minds of CXOs?
But then recent posts by Jeremy Newman reveal what amounts to a rigged market. Rob Lewis captures Jeremy’s argument well in his post Cutting the Big Four down to size:
Newman has revealed how BDO pitched for a due diligence assessment and came in with a fee of £200,000. Meanwhile, the company’s Big Four auditor turned in a figure well over £600,000. In the end, the Big Four firm was simply told to bring that sum down to within 10% of BDO’s, which they promptly did, and won the contract. Demonstrably, the premium the market is willing to pay for a Big Four firm casts doubt over the likelihood of a market solution.
Wider coverage of Jeremy’s assertions might lead to price erosion but that’s not the same as budget cutting. Neither is there an implicit connection between price and competence. In the BDO case, it wasn’t a matter of who could do a job better but how a bid could be used to retain an incumbent. To my mind competence is another component to authority.
Reams have been written about the collapse of ethics in the profession but that has nothing to do with budget cuts. It has everything to do with greed, a willingness to break the rules and successive government/regulatory body failure to deal with the systemic problems of corrupt practices. Richard Murphy’s blog is littered with examples. Richard is a world acknowledged expert in his field to whom I would always defer. Is he a pro-am writer? Sure. The same as I in the sense we’ve not been formally trained. (I would argue that degree course training fulfills a lot of that requirement.) Does anyone seriously question our authority on certain issues? No. Any serious argument is around the application of the things we say.
Can we measure that authority? Sure – links, technorati rankings etc etc will give some indication but you’d have to ask those who choose to ignore our stuff that question to achieve any level of balanced opinion. Or the people who consult with us. In other words, authority is perceptual and contextual in time, space and to the matter in hand.
As to the assertion that professions are a ‘relic of economic scarcity,’ that simply doesn’t apply in the case of professional accountants, lawyers, dentists, architects, doctors…the list goes on. Would you trust the chap next door to treat that rotten molar with a pair of pliers? Of course not. Would you trust me to fix your leaking pipework? Not if you have any sense. 
The moniker of ‘professional’ is only conferred after years of necessary training and study.
In our case, it is possible to cut out huge chunks of cost by automating many of the mundane, routine tasks that professionals perform. That would not lead to a diminishing of authority but an opportunity to provide much needed specialist services. If anything I would argue that a reduction in the handling of the mundane might lead to improved authority.
But it is not that simple either. In some areas, I believe professional accountants are ill equipped to help clients. Simon Hurst’s piece: IT Case book: IT advice – opportunity or duty? lays out the two perspectives very well though I disagree with some of his conclusions. The fact is that authority doesn’t come from learning but from successfully applied experience that’s repeatedly evidenced and recognised by others.
But then I read Charlie Wood’s post about how he’s pruning his reading list from his post entitled Expert Analysis from “Amateur” Journalists:
I’ve decided to pare down the number of feeds to which I subscribe by applying the expert source test: if the feed comes from someone who’s an expert in his field, the feed stays. If not, the feed goes. I expect to lose quite a few bloggers’ feeds—and quite a few professional journalists’.
Charlie is no slouch in the expert stakes himself and this argument makes perfect sense.
There is one thing James might have said with which I could concur. Authority implies relevance. Again – I have argued both publicly and privately in regard to ICAEW that it is at risk of rendering the profession irrelevant. That is because it is not perceived as attuned to the needs of the ordinary practitioner who serves the vast majority of businesses. When that leads to situations where other professionals can (and do) encroach upon ‘our’ turf, then you know you’re in trouble.
There may well be occasions where the pro-am is better qualified to provide authoritative advice, opinion and help. But I doubt very much whether they are anything other than a very small minority.
Of course I may well be missing the point, bearing in mind that James was talking about professionals in the context of Andrew Keen’s parody: The Cult of the Amateur. But I prefer Lawrence Lessig’s treatment of that book largely because regardless of anything, I believe authority is dependent upon the application of the scientific method, not folklore.
If, as a profession, we do something about our effectiveness, efficiency and relevance then such authority as James believes we’ve lost will re-emerge. That is very much in our hands. Not those of the pro-ams.
Technorati Tags: accountability, audit, big four, KPMG, authority
