Archives For Sue Almond

Accountancy is looking different

accapr —  6 February 2014 — 1 Comment

Sue Almond-1528

By Sue Almond, technical director, ACCA

I recently chaired a technical conference in Tirana in Albania. Other than the location, there’s nothing particularly new about chairing a conference. That is until one of my fellow panellists commented on the composition of the audience.

I used my privileged position as chair to do a quick scan and headcount – a typical 80/20 gender split in a room of around 100 accountants.

But wait – the 80 looked like me! Well, not exactly, most were much younger. I couldn’t resist pointing out to my (male) panellist that he might now appreciate how I have felt for most of my professional career. Accountancy is clearly an attractive career choice for young women in Albania.

I started to reflect on some of the other things I had noticed on this short visit and realised that this was a very different profession to what we typically see. Things are changing.

The previous day, I had been speaking at a conference organised by the Federation of Mediterranean Accountants. This had attracted an audience of over 220 – in a country with only 200 registered auditors. How often do we get this level of interest?

And the FCM conference attracted huge media interest, with Arnold Schilder of the International Auditing and Assurance Standards Board and Andre Kilesse of the Federation of European Accountants interviewed for primetime TV. It is highly unusual as an accountant to walk into a room with a whole bank of TV cameras, or to have the paparazzi buzzing around during a presentation on audit.

What probably made the greatest impression on me was the clear collaboration between the government and the accounting profession to build the economy for the benefit of all. Both the Albanian Minister of Finance and the Minister of the Economy addressed the conference. Their overriding message was that the accounting profession provides a bridge – that it can transform the past and make it into the future.

There was also a strong recognition at government level of the value that audit quality and oversight bring to the development of a strong and credible financial market. The emphasis is very much on reliable – trustworthy – financial statements, and the recognition that everyone has a part to play in generating confidence.

At home, back in the UK, I was listening to a news item on Radio 4 about the latest report from Cranfield School of Management, which reveals that women now make up 19 per cent of FTSE100 and 15 per cent of FTSE 250 board positions. The BBC reported that this is the highest participation rate since the university started keeping track in 1999.

This immediately reminded me of the conference in Albania, and that change for the accountancy profession is happening on a number of levels.

All this has made me realise that accountancy is looking different – a world where governments and the profession collaborate for the public good. Where accountancy is seen as critical to the future. Where accountancy is in the news for all the right reasons. Where women are the future of the profession. AND where the sun shines.

This blogpost first featured in The Accountant Online, November 2013

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By Sue Almond, technical director, ACCA

reporting

 

I was fortunate to chair a roundtable on the future of audit while MEP Karim, rapporteur for the JURI committee on the EC audit proposals, was in New York recently on a fact-finding visit to understand more about the US and the global audit market, to consider the broader impact of the EU audit proposals. The roundtable attracted a wide range of attendees, and it was interesting to hear the perspectives from the US. Not surprisingly, much of the debate focussed on the critical EU proposals such as mandatory auditor rotation, tendering and non-audit services.

There were some general recurring themes that arose at the roundtable:

  • Although a single country, the US state system is not so different to EU member states – for example auditors are required to be registered with the state.
  • The distinction between public company audit (regulated by PCAOB and SEC) and private company audit (AICPA and state) is quite significant.
  • The rules on audit committees are set by the SEC. These tend to relate to the legal requirements, including independence of Audit Committee (AC) members, rather than the functioning of the AC, and there was strong support for an enhanced, and more transparent, role for the AC. There was general support for the role of the AC in evaluating non-audit service provision.
  • There was very strong disagreement with mandatory audit rotation across almost all sectors (in line with the feedback to the recent PCAOB consultation on the topic), and in fact the day before the roundtable a motion was tabled in Congress to prohibit any proposed rules on this. The practical impact on global businesses of potentially different mandatory rotation requirements in different jurisdictions was noted. However, it appears PCAOB may still be interested in pursuing rotation.
  • FASB will shortly publish going concern proposals. This is important because the current position is that management in the US have no requirement/responsibility to make a going concern assessment – it is purely the role of the auditor. This is causing significant problems for the IAASB in its auditor reporting project, where there is pressure for the auditor not to be generating ‘new’ information.
  • There was support for global standards, e.g. ISAs (International Standards on Auditing) and IESBA Code of Ethics.

MEP Karim published his final proposed amendments for the EU Audit proposals for vote just after the roundtable. They are very much in line with the position ACCA took on the original proposals more than 18 months ago:

  • We support adoption of global standards (e.g. ISAs, including on auditor reporting, IESBA Code, independence/non-audit services, ISQC1)
  • We support strengthening the role of the audit committee and increased transparency
  • We do not support mandatory rotation of auditors as we do not believe that there is evidence that supports an improvement in audit quality as a result
  • We do not support restricting the role of professional bodies, particularly in relation to the monitoring of auditors of unlisted entities.

Following the approval on MEP Karim’s report, the focus now moves to the Council. Let’s hope that they will recognise the good work that has been done in the Parliament as they now work on their revisions to the audit proposals …