Where’s the quality?
January 24, 2008
Last year, Richard Murphy bemoaned the fact he had a compliance visit that didn’t take into consideration the quality of the work he undertakes. This is an ongoing problem because it is difficult to see how the profession, and in particular ICAEW, can claim a certain status without solid quality checks which demonstrate a commitment to standards.
Over the last week I’ve looked at three sets of accounts for a variety of reasons and was appalled at the most basic of errors. I wasn’t looking for problems but they jumped out.
In the first two cases, accounts were submitted to Companies House that in one case contained 10 mistakes. In one case the most serious looks like an overdrawn directors’ loan account hidden in debtors. HMRC take the view that represents salary in some circumstances. The same accounts disclosed unnecessary information for abbreviated accounts.
In the third set of accounts, the practitioner had made a blunder that will cost the client in tax. They’d forgotten to add back depreciation and had no firm basis upon which to agree an add back for PU in motor expenses. They pulled the ‘We agreed it with the client’ trick which of course doesn’t wash. The successor practitioner now has to figure a way of dealing with this mess.
And then to cap it all, last evening an overseas colleague working in France says the acquired working papers for a job he’s on, won from a Big Four outfit that features prominently in these pages, are substandard. Curiously, he’s happy because he knows that he can demonstrate value.
But the real problem is that confidentiality and an antiquated notion of ethics often seems to prevent the conscientious practitioners from shining through. How can they explain to clients they’re doing a great job when much of what they do is ‘hidden’ yet essential stuff for which others continue to lowball?
The argument will always be that the chances of detection are so low that ‘getting away with it‘ as Mark Lee said in comments to an earlier post would now appear to most definitely swing both ways. What professionals have to understand is that any time they are taking these kinds of needless risks, it is clients who suffer. And reputation.
It was therefore sad to see one practitioner on AccountingWEB asking whether he was insane for offering a discount:
I have recently taken on a new client and agreed a fee of £2,500 + VAT. They are extremely happy with this fee, as their last accountant was ripping them off (this would be putting it mildly).
However, having now done most of the work I realise that I have overestimated slightly, and consider that £2,100 + VAT would be a fairer fee. I will be seeing them tomorrow and intend to reduce the fees.
I have an opinion which is in the AW comments but I was particularly pleased to see a different view by Jason Dormer who said:
This is clearly a man who lives and works by values and good for him in not taking the option that the majority in every trade and profession would take.
He’s right of course and I suspect the impact it has had on me is in no small measure due to the fact I have been seeing so much crap in the last few days.
Endnote: I suppose I should name names. I may do so at a later date. But I’m aware that clients are at risk and it is therefore unfair to provide further detail.
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I raised this with the ICAEW at the time of my firm’s quality assurance visit and was told by the inspector that it was difficult (=impossible) to assess quality.
Crap.
I’m not asking for the technical quality of the firm to be assessed; all I want to know is are they doing the basics correctly. Both you and I know that too many aren’t even on the first rung of the quality ladder.
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