The shocking truth about professional standards
February 4, 2008
Late last year, a reader sent in a set of accounts prepared by a well known firm to the Investigations Committee of ICAEW. The reader had discovered what they considered material errors in the accounts and wanted to know what (if anything) ICAEW is prepared to do about it. Having heard nothing for over a month, our intrepid reader contacted ICAEW to find out if any progress had been made.
Apart from receiving some woolly answers, one in particular stood out:
Best practice does not have to be followed by members
When I heard this I had to do a double take. Does this mean then that you can pretty much do what you want? It seems so. Provided you’re not caught out too many times. By which I mean that no more than six people complain. You can prepare the worst set of accounts, submit them late, get the numbers wrong and it won’t be picked up - even on a Practice Assurance visit.
I’ve written about this before but on this occasion I did some checking of my own. Nowhere in any of the ICAEW online handbook information does it refer to the enforcement of standards or best practice. How crazy is that?
My reader used to think that it was bad form to report other firms. After all, we all make mistakes. But either he’s very unlucky or standards are being ignored. In the last few months, he’s had to resolve a number of errors. Some of these are computer generated in that whomever was supposed to be checking the final accounts had not looked to ensure that updates are being enforced.
The range of errors found is extraordinary. Everything from wrong filing dates and incomplete signature information to incorrect disclosure and desciptions of disclosure. These cases are not limited to the smallest firms where one might expect that standards might be difficult to maintain. A good number of the problems are associated with firms that are ranked in the UK top 100, have won prizes for customer service or are well known in the regions.
Michael Izza, ICAEW CEO knows he has to enhance the reputation of the profession if it is to improve its global standing. That means the whole of the profession. How is that possible when the basics upon which the profession relies are being ignored? It doesn’t make sense.
Needless to say, my reader could only conclude: ‘Why bother?’ Because that’s the message that’s being sent out.
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4 Responses to “The shocking truth about professional standards”
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Thank you Dennis.
[Reply]
Oh crumbs.
There’s an on-going debate about whether the term “accountant” should be protected. I think if it is, then the qualification has to be made worth much more than this.
The public should be able to trust that a qualified accountant who’s a member of a professional body will prepare accounts that don’t have such terrible howlers in them. Yes, accountants will make mistakes. We’re not Superman. But so many and such fundamental mistakes?
What on earth do we pay our subs for?
M
[Reply]
Dennis, I feel that pain too, but I’ll go you one better.
I won a lawsuit in a US court against a financial planner; he was found guilty of professional malpractice.
When I sent a copy of the conviction to the Financial Planners Association, and to the National Association of Personal Financial Planners (he is a member of both) and asked them what sanctions they imposed for such a conviction, they told me:
“Thanks for filing a complaint. We have investigated and decided there have been no violations. Thank you for helping to uphold our high professional standards.”
Several words come to mind, but arrogance is at the top of the list.
[Reply]
Perhaps this is an inherent problem with self-regulation? If the ICAEW both promote their members’ interests and regulate the members, there could be a conflict of interest.
[Reply]