Vir Cantium

I'm right, you know …

What’s In A Name?

When is an accountant not an accountant? When they are not a Chartered Accountant, Chartered Certified Accountant or the like, according to the CCAB*, the umbrella body that represents the accountancy profession’s governing bodies. A campaign is being planned to persuade the government to legally define and control the term “accountant” to ensure that only those suitably qualified are able to use the term.

My own professional body, the ACCA, has written to me:

As a member, you are a qualified and regulated professional. At present, professionally qualified accountants must compete in a marketplace against unqualified providers of accountancy services who are free to describe themselves as accountants.

The CCAB, the umbrella body for the UK’s six professional accountancy bodies, which includes ACCA/ICAS/ICAEW/CIPFA/CIMA/ICAI, believes that this situation is confusing to the public and inadequate in terms of consumer protection. On the rare occasions when a qualified accountant makes a mistake, the public has redress through a regulatory regime that does not apply to unqualifieds. This is clearly unfair.

So what’s wrong with that, you may ask? Indeed, the profession is hoping you would say that.

One could suggest that the CCAB’s position is being somewhat dishonest here (nay, unprofessional?) – not because the profession is trying to erect barriers to entry to the market, which is a natural instinct and understandable, given the opportunity presented to them – but because the profession will, and is, claiming that it is in the “public interest”. That is a dishonest position – it’s not the public interest, it’s the profession’s interest. As George Bernard Shaw said, “All professions are a conspiracy against the laity”.

Putting all that aside, I still don’t agree with the idea, even as a qualified accountant myself. It is the profession trying to use the power of the state to protect itself from the competition. Just as the established players in any profession or trade will support more regulation of their industry, it serves not the public but those already in the market.

If the accountancy profession wants to reduce the disparity between the qualified sector and the rest, then they should be agitating for less regulation of themselves. Nearly fifteen years after audit regulation came in, with countless forests wasted in order to have the right bits of paper on the client file, and boxes ticked, has it really done anything to improve the quality of audits – certainly not in proportion to the increase in time spent and fees charged. Of course, auditing has long been closed off to non-qualified accountants, but it is a classic example of the folly of regulation as a driver to increase the quality of the product: it still can’t beat the good old free market – as long as that market is allowed to be free. It is in the public interest to reduce regulation, not erect ever higher barriers, as the profession is now trying to do.

In the survey that qualified accountants are being encouraged to take, one question asks whether the term “accountant” should be protected for those in business (i.e. commerce/industry), those in practice, both, or “don’t know”. There was no “neither/none of the above” option.

So perhaps many people don’t appreciate the difference between an “accountant” and Chartered or Chartered Certified Accountant. Does it really matter so much? What happens if they get bad service? The same as with any service – they use their rights under the law, statutory and/or common, to obtain redress and their rights as a purchaser to switch suppliers.

If you are selecting a builder, how many people ask to see copies of the builder’s City and Guilds qualifications, or confirmation of their ISO certification? Very few – the best way is to ask around for recommendations from others.

There could be a sweet irony in all this though. If the profession gets its way and “unqualified” accountants now have to be regulated in some way – and that will probably be some sort of annual registration and framework of box ticking – sorry, I mean “quality assurance” – then they may well face more competition from the unqualified sector, as the “unqualifieds” will then be able to parade their state registered credentials alongside the qualified professionals. By going some way to levelling the playing field the profession may achieve exactly the opposite of what underpins their current moves. And it would serve the profession right.

Of course, once the dust has settled the only other things that would have changed will be that the public will still pay more for the same service. Never mind: it’s all in the public interest, isn’t it?

*CCAB – the Consultative Committee of Accountancy Bodies

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3 responses to “What’s In A Name?

  1. torymory December 15, 2007 at 1:48 pm

    Well said.

    As Adam Smith said “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.

  2. pakipics January 21, 2008 at 8:44 pm

    Have to agree with you.

  3. ACCA Global January 30, 2009 at 11:53 am

    Well this is definately in heck of a debate. and i totally agree with you on this

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