Finance: Something is off-balance in the state of accountancy: Change is slow but Roger Trapp sees clear signs of a beleagured profession facing up to the need for a regulatory shake-up

The announcement by the Institute of Chartered Accountants that it has set up a working party to review regulation of the profession is perhaps the clearest evidence to date that all is not well with the way the organisation runs itself.

The move, decided by the institute's council last week, (12 oct), is being presented as a response to increasing pressure on the profession throughout the world. According to Andrew Colquhoun, the organisation's chief executive, says they the ICA is are having to meet ever-increasing public expectations at the same time as convincing persuading their its members of the need for tighter and 'more pro-active' disciplinary procedures.

(para) But some observers see it as a more specific reaction to repeated criticisms from within and outside the profession of its ability to handle the so-called dual role of regulator and trade association. Others regard it as an acceptance that , if it does not move quickly, the decision to separate the two functions will be made by a new government. Mr Colquhoun says there is 'no evidence that an incoming government would be more interventionist than the present one', but admits that this is an important issue.

Moreover, it is not considered beyond the bounds of possibility that the current ministerial team could impose changes on the profession. After all, critics claim, that the institute and the other bodies within the profession have, regardless of the various initiatives launched, done little to convince the public that they have raised standards since the spate of financial collapses at the end of the 1980s put the spotlight on auditors.

In particular, the joint disciplinary scheme, which is supposed to investigate the most serious allegations of wrongdoing, is in disarray.

According to the This is because of the belief of the other main body, the Chartered Association of Certified Accountants, that this is because it is costing too much to run and also because of the setback posed by the court ruling in the Price Waterhouse/Bank of Credit and Commerce International case that its the organisation's inquiries must wait until all legal proceedings have been completed. Chris Swinson, the BDO Stoy Hayward partner who is chairing the working party, is under no illusions about the size of the task confronting his small team faces. 'The terms of reference are quite broad because the subject touches parts that many others leave behind,' he says.

For instance, Looking into regulation, for example, leads easily into 'questions of structures' - the ICA would be unable to change much without approval from the other bodies. But it the review also involves consideration of the profession's relations with the Government and with the leading firms. 'The more you think about it the broader it seems,' he Mr Swinson adds.

All of which this makes the deadline of the institute council's strategy 'awayday' session in January sound particularly tough. But Mr Swinson sees believes the task has less coming up with a detailed plan than producing should produce 'pointers to the direction in which we should move', rather than a detailed plan.

Helping him to assess the otions options will be two institute stalwarts, John Collier and former president Ian McNeil, as well as Douglas Llambias, a council member more usually regarded as being a thorn in the side of the eEstablishment.

It has been suggested that, as someone who believes the institute should not continue to deal with discipline, he might be there to bring him 'onside'.

But Mr Colquhoun claims he is there because 'this is an issue where we need as a 'free thinkers', while Mr Swinson says his role is to ensure that the 'more radical element in council is represented'.

The extent to which the voices of Mr Llambias - as well as that of and Mr Swinson - is are heard will be clear when the group's findings become known early next year.

But Whatever they recommend, it recommends, it looks as if the initiative appears to confine the Bishop plan for rationalising the profession will be relegated to the pages of history- even as a series of events, that the institute and the Chartered Institute of Management Accountants are promoting are holding together to promote it is about to start.

Mr Swinson points out that the consultation period on the Bishop plan - which has been characterised as an institute takeover, with others looking after sectional and national interests - is not yet over. The review - which he says he claims to have suggested in early September, before the certified accountants published their alternative proposals to Bishop - is merely 'a bit of contingency planning', he says.

Nevertheless, Anthea Rose, chief executive of the certifieds, greeted the news of the review as vindication of her organisation's plan for a General Accounting Council to oversee regulation of the profession.

Pointing out that the proposal had been criticised for 'muddying the waters' and distracting attention from the main issue of rationalising the profession into three institutes, she says she is pleased that the English institute seems to have come around to her organisation's point of view.

However, But she remains is still suspicious about the timing of the move.

And by attacking as 'hasty' and 'in poor taste' institute president Roger Lawson's the dismissal of her body's plan by Roger Lawson, president of the institute, Mrs Rose seems to be suggesting that a harmonious working relationship is as far away as ever.( ends) nnn (Photograph omitted)

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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