ICAS President Bruce Pritchard CA on how trust in accountancy can be strengthened

ICAS President Bruce Pritchard CA explains how trust in accountancy can continue to be strengthened at a time of rapid change for the profession

Within the accountancy profession, and across business more broadly, we talk a lot about trust. It has, rightly, become a point of obsession in business in recent years, as high-profile cases of corporate misbehaviour have captured the public attention, and the pandemic contributes to changing expectations about the role and responsibilities of business in society. As CAs, we are increasingly asked: what are we doing to ensure business acts in the best interest of stakeholders?

It’s not about repairing something fundamentally broken within accountancy, it’s about continuing to strive for higher standards of professional behaviour in business, especially as the profession comes under increased scrutiny. We must not let a few bad apples rot the entire barrel.

Now, despite the headlines, it is my firm belief that chartered accountants and businesses generally behave ethically, and always have done. Research from Chartered Accountants Worldwide and Edelman shows that trust in the profession is growing and CAs are seen as credible voices on matters inside and outside business. That’s why, though it may seem semantic, I like to rephrase the discussion from one of rebuilding to strengthening trust. It’s not about repairing something fundamentally broken within accountancy, it’s about continuing to strive for higher standards of professional behaviour in business, especially as the profession comes under increased scrutiny. We must not let a few bad apples rot the entire barrel.

Ultimately, breakdowns in trust come down to breakdowns in communication and interpretation. And trust is highly individual, depending on someone’s personal values and their appetite for risk. It creates a tricky position for accountants because not all users of financial information possess the sophistication to interpret it as intended. Accountancy is a specialism – and it has grown into an increasingly complex one over time, in tandem with companies and financial instruments. And while we have a responsibility to paint a fair and true picture of the world around us – the cornerstone of our profession which absolutely must be upheld in all circumstances – we are not fully responsible for decisions taken on the basis of the data we prepare or advice we give. Instead, the responsibility lies somewhere in the middle, which complicates matters of trust a great deal.

The crucial relationship between chartered accountants and various stakeholders will inevitably become more intertwined, too. The scope of accountancy is growing. We are increasingly becoming responsible for nascent areas of financial reporting that are complex and sometimes controversial, including various ESG frameworks, as well as non-financial reporting that may be seen by some as entirely subjective.

These are fast-evolving areas, still seeking consensus in the profession. And if trust does rely on communication and interpretation, then navigating the profession’s future could become a minefield if we are not vigilant with outreach and educating our colleagues and clients. Long gone are the days when everyone could agree on a final balance of debits and credits.

And that’s where organisations such as ICAS have a vital role to play. Professional bodies, standards-setters, regulators and government must work together if trust in accountancy is to continue to grow. That involves two core responsibilities. First, ensuring that the introduction of the new metrics, frameworks and reporting requirements that govern the work of accountants are robust and well interrogated. They need to balance the accountant’s commitment to fairness and honesty with the user’s need for clarity and understanding. Second, we must reach out to those who rely on the information and advice we supply, setting their expectations and explaining exactly why and how the profession is evolving. The whole “corporate ecosystem”, including the public, must be made to feel part of the journey.

Strengthening trust in accountancy is a matter of priority for ICAS. The institute works across business, government and society to ensure that the great work of accountants is shared far and wide, and that the profession evolves to stamp out rare instances of misbehaviour. But, at its core, it is a credit to the skill and integrity of the CA community that we are currently recording such high levels of trust.

Learn more about what ICAS is doing to strengthen trust in the profession

This article was first published by ICAS. You can read the original article here.