YOU DON’T HAVE to search too far in Ireland at present to find examples of the dire consequences of bad financial advice. Up and down the country people are saddled with negative equity, unsustainable debt, depleted savings and we are collectively facing a pensions time bomb.
And yet, the current Companies Bill 2012, due to go before the Oireachtas Committee on Jobs, Enterprise and Innovation this month, still does not give legal protection to the term accountant, despite the danger this poses for members of the public who are seeking financial advice.
It’s an extraordinary situation, but currently in Ireland, anyone can set themselves up as an accountant, without education, qualifications or experience. In the current financial climate, many members of the public are seeking accountancy advice and expertise, often for the first time. There are individuals and firms offering services to an unsuspecting public and calling themselves accountants, even though they do not hold any accountancy qualifications and are not subject to regulation.
The Companies Bill
The Companies Bill is one of the largest single pieces of legislation in the history of the State and there is much to be welcomed in the Bill including a much-needed simplification of company law with a primary focus on ‘think small first’. However it is shocking to consider the provision has still not been made for the statutory recognition of the term ‘accountant’ despite repeated representations on this high priority issue, by members of the accountancy profession, for more than a decade now.
As generations repay the damage caused by light touch regulation, it is amazing to think that the Government would let the opportunity pass to close this important loophole. Members of CPA Ireland and our peer representative bodies are seeing at first hand the havoc caused in businesses around the country as a result of bad advice. The public need to know that when they are dealing with an accountant they are dealing with a professional who has to adhere to the most rigid professional standards.
The accountancy profession has developed, over the years, a sophisticated model of self-regulation to ensure that standards are maintained within the profession. CPAs undergo and complete a rigorous education and examination process. In practice, it takes on average between five and seven years to qualify as an accountancy practitioner. Upon qualifying a member may use the letters of their membership body to seek employment as an accountant but if they wish to offer services to the public they must undertake further training.
Our legislators have a chance to get this right
The accountancy profession has contributed in a number of ways to assisting members of the public in financial distress, including participation in the Mortgage Arrears Resolution Programme (MARP), working with the Money and Advisory Budgeting Service (MABS), and responding to the recommendation of the Credit Review Office by developing a Business Plan Template for those seeking to raise funding.
Most recently, CPA Ireland has been one of the bodies working with the Insolvency Service of Ireland to roll out training for personal insolvency practitioners. We believe it is imperative that the public is entitled to rely on the fact that their ‘accountant’ is subject to appropriate supervision and regulation and so providing the necessary assurance and protection.
Our legislators have one chance now to get this right and we are therefore calling for amends to be put forward to the Bill immediately to give legal protection to the term “accountant”.
Joe Aherne is the President of CPA Ireland, one of the country’s main accountancy bodies with 5,000 members and students around the country.