This article was first published in the October 2012 UK edition of Accounting and Business magazine.
The accountancy profession will continue to lose credibility if it fails to educate the public and its stakeholders of its value and take steps to rebuild trust in the industry, according to an independent survey conducted by Longitude research for ACCA.
In recent years, the role of the accountant has evolved significantly in line with changing regulation and business law. However, the ACCA study shows that there is a perception gap between the profession and the public when it comes to the issue of trust.
Three-quarters of accountants believe the general public considers them trustworthy, but just 55% of the public agree. It highlights a huge gap between how the industry sees itself and what the public really thinks.
Lack of understanding
According to the report, Closing the value gap: understanding the accountancy profession in the 21st century, this disconnect is in part the result of a lack of public understanding of the role that accountants play in driving the success of businesses of all sizes – crucial to economic growth and recovery.
The report surveyed more than 250 accountants, 1,500 consumers and key opinion leaders from around the world to better understand the value that the accountancy profession can offer and the value that the public believes the profession provides. It also discusses the steps that can be taken by the profession as a whole, and by individual accountants themselves, to close that gap.
When it comes to gaining public trust, the report has five recommendations for the accountancy profession to close the value gap:
- Engage in discussion with stakeholders and the public at large about what it means to be an accountant.
- Talk about audit, about what it is and what it is not; audit has recently come in for a lot of criticism.
- Take the initiative and explain how accountants add value.
- Address real concerns about ethical issues and conflicts of interest.
- Develop the soft skills needed to undertake this engagement and build trust with people.
The findings of the study also show that the profession needs to work on its own image compared with other professions. The public ranks accountants below high-trust alternatives such as doctors, nurses, architects and engineers, but sees them as more trustworthy than bankers, politicians, journalists and lawyers.
The economic crisis has not actually had a huge impact on the public’s perception. Only 13% of people said that their level of trust in accountants had declined during the last five years. A chain of high-profile scandals linked to the profession over a number of years, such as Enron and the events of the financial crisis, means that the industry is facing a legacy of mistrust, a sentiment that is likely linked to old-fashioned stereotypes of who accountants are and what role they play.
Helen Brand, chief executive of ACCA, says: ‘2012 has been the year of questioning trust among the professions and institutions once held in high regard. The accountancy profession has not been immune from this and neither should it be. It is concerning that public opinion of the accountancy profession is low, and it is important that the general public recognises the integral role of the profession in economic growth and recovery.
‘Part of this recognition will come from an understanding of what accountancy today truly means, and the industry as a whole must work together to help this transformation of opinion. This research was designed to act as a starting point for a wider debate around how that can be achieved.’
Out of the shadows
Richard Sexton, executive board member for reputation and policy at PwC, agrees. ‘As accountants, it is important that we come out of the shadows as a profession. Although there will be some challenging conversations, it is important that we get better at explaining what we do, how we do it and how we generate value.’
Just over half of the people surveyed said they believe that accountants work in the interest of the companies they serve or themselves, rather than in the public interest. This finding demonstrates a clear need for a
better awareness of the role that accountants play, without allowing the actions of a handful to tarnish the credibility of the majority.
Of the accountants surveyed, 85% agreed that the profession as a whole should be doing more to improve its overall image by raising awareness of the value that accountants contribute.
Brand adds: ‘Improvement must begin with a greater self-awareness since the accountancy profession’s views of itself do not always match up to those of the wider public. Old-fashioned stereotypes of accountants as bean counters must give way to a more accurate representation of the functions they fulfil today – which range from financial reporting through to strategic business advice and planning.
‘Accountants can help to ensure that businesses behave in an ethically responsible way and that the rules and regulations of the land, which have been designed to safeguard the future of the economy, are adhered to.
‘Almost three-quarters of the accountancy professionals we surveyed said that they felt professional bodies made the accountancy profession act responsibly – a role that ACCA takes very seriously. But there is a clear message in this report that the profession should be doing more to raise awareness about the value that it contributes. Public value should be at the heart of what the profession offers.’
Wendy Towner is ACCA’s head of business intelligence