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, finds new research launched today by ACCA (the Association of Chartered Certified Accountants) called ‘Closing the Value Gap’.
In recent years, the role of the accountant has evolved significantly in line with changing regulation and business law, but the research shows there is a perception gap between the profession and the public when it comes to the issue of trust.
Three-quarters of accountants believe that the general public consider them to be trustworthy, while just 55 per cent of the public agree highlighting the huge gap between how the industry sees itself and what the public actually thinks.
This is in part due to a lack of understanding of the role that accountants play in driving the success of businesses of all sizes, which are so 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 the accountancy profession can offer and the value that the public believes the profession provides. It also discusses steps that can be taken to close that gap by the profession as a whole, and by individual accountants themselves.
When it comes to gaining public trust, the report offers 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 - 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 do this engagement and build trust with people.
The results from the report also show that the profession needs to work on its own image compared to other professions. The public ranks the accountancy profession below high-trust alternatives such as doctors, nurses, architects and engineers, but is seen as more trustworthy than bankers, politicians, journalists and lawyers.
While 70 per cent of accountants accepted that the profession was partly to blame for the financial crisis, it emerged that the economic crisis has not actually had a huge impact on the public’s perception - only 13 per cent 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) mean 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, ACCA said: '2012 has been the year of questioning trust amongst the professions and institutions once held in high regard. And the accountancy profession has not been immune from this questioning 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.'
Richard Sexton, executive board member for reputation and policy at PwC, agreed. '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, demonstrating 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. Eighty-five per cent of accountants surveyed agreed that the profession as a whole should be doing more to raise awareness about the value that it contributes to improve its overall image.
Helen Brand continued: '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 regulation of the land, which have been designed to safeguard the future of the economy, are adhered to.'
Helen Brand concluded: '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 from the profession that it 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.'