Public value at the heart of re-building trust in accountancy
Thursday, August 8 2013
The financial crisis and its aftermath have justifiably prompted close scrutiny of all those who are entrusted with handling the finances of businesses of all sizes, as well as a re-evaluation of what value really means in the corporate world.
Do we just look at balance sheets and profit statements, focusing only on the financials, or do we look at the wider value that business brings to the public and society?
This second type of value – public value – is a particularly important one for the accountancy profession. To serve business effectively, accountants need to have the trust of the public and business alike. Without trust, the work and input of accountants can have little credibility.
The role of the accountant has evolved significantly in recent years. Recent research – Closing the Value Gap – has shown that the lack of understanding amongst the public of the value that accountants deliver is linked in part to limited insight into how accountants work with businesses. The work of an accountant is not restricted to traditional stereotypes of spread sheets, but can range from preparing financial statements to offering assurance services to providing strategic business guidance. The value of this work depends on accountants being seen to be able to take an objective and ethical approach, one that delivers public value. If the profession is seen as failing to operate in a way that protects society’s interests, then its value to business is lost.
“Closing the Value Gap” is independent research, recently commissioned on a global basis, surveying accountants, consumers and key opinion leaders to explore the role of accountants today and in the future, and better understand what the industry needs to do to rebuild trust in the profession.
The results of the survey show that the first step on this journey needs to be an increased self-awareness from the profession of how it is perceived externally. The report centres on the key finding that there is a perception gap between how the accountancy profession sees itself and what the public thinks – almost three quarters of accountants believe that the public considers them to be trustworthy, against 55 percent of the public who agreed with this. The report also reveals that only 13 percent of consumers said that their level of trust in accountants had declined in the last five years. Although public confidence in the professions has no doubt been accelerated by the financial crisis, it is interesting that what the industry seems to be facing, is a legacy lack of trust.
These findings might make for uncomfortable reading for accountants; but they should instead be seen as an opportunity for the industry to reflect on its situation, and start considering how it can take steps to start closing this “value gap,” from engaging proactively with stakeholders and the public at large about what the accountancy profession does to addressing legitimate concerns about ethical issues and conflicts of interest – there lies the key for the profession. They year 2012 was one of questioning trust amongst the professions and institutions once held in high regard; accountancy has not been immune from this questioning, and nor should it be.
If the accountancy profession is to flourish, it must communicate where it provides advice that leads to sustainable business growth, communicate clearly about finding new ethical opportunities for growth, and establish a positive dialogue around the defence of principles of robust corporate governance.
Accountants keep the wheels of business turning, but the value the profession can deliver will be limited if it doesn’t commit to driving positive messages and discussion around the ethics of responsible business, and the role that the finance function plays in safeguarding the future of our economy.
Submission By: Brenda Lee Tang, FCCA, Head of ACCA Caribbean
Co-ordination By: Sandrine Rattan Communications Specialist