ACCA has been consulting with practitioners across the country. Here’s a summary of what you had to say.
Executive summary ACCA UK’s Practitioners' Network has been holding consultative lunches around the country with practitioners since 2002 at the request of ACCA’s Council. These lunches enable us to keep in touch with practitioners, spread the word about how we support them, and gain valuable information to share with other departments.
To facilitate benchmarking, lunches are held annually in five locations, and then five further lunches rotate every year between two or three locations. In 2015, lunches were held in Birmingham, Manchester, London, Southampton, Norwich, Edinburgh, Bristol, Newcastle, Swansea and Leeds.
The key issues and points raised are highlighted below.
Economy The economy has continued to improve significantly over the past 12 months in much of the country. There is a greater willingness to pay for consultancy services, for example, but there are still a few areas that are yet to see that degree of improvement. Those areas are more geographically isolated and tend not to see the highs or the lows of the rest of the UK.
London and Birmingham – which contain ACCA’s greatest concentration of practitioners – are reporting that clients are moving onto the cloud and they are following suit.
Access to finance Banks remain largely closed to business but there has been a slight improvement from last year – particularly in lending to the construction sector. However, lending is largely dependent on collateral, and lending is often only to a proportion of the value of the asset. In some cases, collateral is irrelevant and it is the history of the business that determines whether the bank will lend.
Clients remain cautious in some parts of the country and are not looking for finance. However, where they are looking for finance, banks are still the first port of call. When that route is closed, or where finance is needed quickly, alternative finance is utilised and has become a mainstream means of financing – most commonly through Funding Circle.
Crowdfunding is a source for investment as well as borrowing – some clients have surplus funds and are choosing to get a higher rate of return through lending to Funding Circle. Others with surplus funds are simply sitting on profits as they are too nervous following the recession to invest and expand and do not wish to take money out of the business and pay a higher tax rate as a consequence.
Audit work There were attendees at every location who had withdrawn from audit – either because they no longer had the critical mass of audits to make the cost of audit work justifiable, or because they could not see the value of it for their clients. For those not doing audit work, it has become standard practice to outsource any audit work required to other firms.
However, some practices are building up their audit portfolio by picking up audits from those exiting the audit field or from mid-tier firms, but it is seen as a specialist field of work now and those doing it are using software, often bespoke, to ensure the quality of their work.
Of the practices still auditing, staffing issues are a big concern. They fear a time when they will not be able to retain their audit status because they are unable to give the necessary audit hours to their trainees so that they can achieve auditing certificates.
HMRC experiences There has been a further deterioration in the service received from HMRC and while much of this is similar to last year’s feedback (too few staff with insufficient training resulting in significant postal backlogs and inconsistency on the helplines) it has been compounded by changes in HMRC policies and incorrect advice given by HMRC advisers. The incorrect advice was, on occasion, felt to be unethical. Changes in HMRC policies, sometimes unannounced, have adversely affected practitioners.
HMRC failings highlighted included incorrect penalty notices, incorrect coding notices, and problems with its smart phone system as it tries to move to greater automation. There is still only a self-assessment agent helpline although agent helplines for other areas are desperately wanted, and there is inconsistency over the use of emails which would greatly increase efficiency for practitioners.
Recruitment Many practices recruit a mix of graduates and school leavers but there is a definite bias towards school leavers now. Apprenticeships are now being taken on in most locations with a reasonable rate of success. In every location, recruitment was cited as being difficult with replacement semi-seniors particularly difficult to recruit.
The Big Four were blamed for the shortage of audit and qualified tax staff because they stopped training during the recession. The quality of candidates is a concern and there is a surprising gap between qualification level and practical knowledge. Some locations have said that recruitment is their biggest concern.
Competition Unqualified accountants are a source of annoyance at best and competition at worst. There is still a strong desire for protection of the term ‘accountant’ but in the absence of that, they want education of the public. ACCA should consider a sustained press campaign would be a cost-effective way to educate the public. In addition, ACCA should also target banks and other important organisations and lobby them to recognise only qualified accountants.
This year, Big Four practices were cited as a source of competition as they push for a share of the SME market by offering lower fees and automated self-service on the cloud. However, they are not expected to be able to offer the personalised service that SMEs require. Another potential threat is people thinking they can submit their own accounts and file their own tax returns without the help of an accountant by using accounting software.
ACCA products & services ACCA UK’s Technical Advisory helpline and website continued to be the best known of ACCA’s services for practitioners and the best means for engaging with them. Practitioners welcome the free tools developed by the technical advisory team – such as model accounts – and would welcome others. They also feel the website could be easier to search and use.
Practitioners are frustrated by the practising certificate renewal exercise. In a third of locations, they reported that every year they pay for their certificate renewals in October/November but do not receive the actual certificate until February. They incorrectly assume that until they receive their new certificate, they are signing off audit reports without a valid certificate. They are also displaying an out of date certificate on practice premises in sight of existing and potential clients.
ACCA’s monitoring regime The attendees were largely positive about ACCA’s monitoring regime but the ending of ACCA’s Quality Checked scheme was discussed with the majority of comments regretting the loss of what had been a valued scheme for practitioners.
What could ACCA do to improve satisfaction? Two main areas were highlighted: specialised or practical training, and global professional networking.
Some attendees would like ACCA to regulate them for probate work, and train them on how to do overseas tax returns. For example, many attendees are called upon to do Spanish or USA tax returns and would rather do the work than have to farm it out.
In the absence of being able to acquire the skills themselves, ACCA should facilitate global networking for advice in areas that they are not qualified for or knowledgeable on.
Other requests were for students to be required to gain basic bookkeeping skills through the examination process, and for ACCA to ensure that its practitioners have a greater awareness of the resources available to them.
Recommendations In the absence of protection of the term ‘accountant’, the best alternative is a sustained press campaign that promotes the use of qualified accountants. Practitioners were very supportive of last year’s brief campaign but a sustained campaign is necessary to educate the public. ACCA should target banks and other important organisations and lobby them to only recognise qualified accountants.
Practitioners feel left behind other qualified accountants because ACCA neither trains nor regulates them for probate work. They would also like to acquire the skills to keep work such as overseas tax returns in-house. ACCA could pilot a training day where practitioners can learn about the US or Spanish tax system and how to complete a Spanish tax return.
The economy is moving onto the cloud so ACCA should educate and encourage its practitioners to look at online accounting services and the cloud so that they can get ahead of their competition.