Keeping up the good work
Brendan Nelson examines the issues of standard setting and regulation in accountancy and the role of ICAS.
Sir Richard Lambert has outlined a vision to develop banking as "a profession, along the lines of accountancy or the law".
The proposal of the former director-general of the CBI is for a standard setter, separate from the regulators, to monitor behaviour.
At ICAS we are both standard setter and regulator. Indeed, our purpose is to regulate chartered accountants to the highest professional and ethical standards in order to maintain the confidence of the public in the profession.
The ethical declaration we make in our Annual Return and the oath our newly-qualifieds take at our Admission Ceremony is a commitment to individual ethical behaviour. Interestingly, Sir Richard has rejected an oath for bankers.
Regulation at ICAS doesn't always get the limelight. Yet it is absolutely core to what we do. Every year we carry out more than 250 monitoring visits to firms covering insolvency, quality review and audit. We ourselves are reviewed on the quality of our regulatory work by the Financial Reporting Council (FRC).
The FRC stated in its Annual Report 2012/13 that "ICAS's regulatory work is of a high standard" and added "We found no significant weaknesses in any of ICAS's regulatory arrangements".
We also carried out a survey of our firms and sole practitioners late last year. That told us that 86 per cent of them believe ICAS has a strong reputation as a regulator. But we are always looking for ways to enhance and improve our regulatory processes, and add value for our Practising Certificate holders and firms. We have listened to feedback from our practitioners and aim to ensure that we don't place an unwieldy burden on our firms. This is a sensitive balance, which we must take care to get right. In the future, we aim to better balance regulation with support; in other words, more the helping hand than the yellow card.
One of the strongest messages that comes through from firms is that they would like the public to differentiate between the regulated professional accountants and the unqualified accountant across the road. They feel that their higher quality professional service should be recognised more in return for the cost of regulation.
In light of that, we are currently considering what more ICAS could do to address this issue. After all, the public would be rightly annoyed if they were being treated by an untrained doctor or if their legal issues were being dealt with by someone calling themselves a lawyer, who had never qualified as one. So, why would you leave your financial matters to an unregulated accountant?
In Ireland, this issue is being raised in the context of protecting the consumer rather than protecting the accountant.
We would like to explore whether there is a need for more consistent regulatory arrangements for the wide spectrum of advisers who currently provide accountancy services in the UK.
The wider issue of ethical standards and behaviour is one that ICAS intends to do much more about. We are setting ourselves an ambition of becoming a global leader in ethics. We are just putting the finishing touches to a thought leadership paper, which seeks to enshrine the responsibility of individuals to do the right thing. The title sums up the courage and behaviours we expect from our 20,000 CAs. It is simply called "The Power of One".