Horses for courses

Alan Shooter is fed-up. He is an FCCA and his central London firm Shooter Greene & Co is well respected. Yet he worries that clients are increasingly turning their backs on skilled and experienced firms and taking their business to firms without qualified accountants.

'Lawyers are protected,' retorts Shooter. The accountancy profession has no such legal definition, even though, he believes, it is needed to protect both qualified accountants and their clients. He argues that accountants are now fighting off unfair competition from 'more and more people who are unqualified and who are competing on lower fees.'

Shooter continues, 'These firms don't have the associated costs [from regulation of the profession], they probably haven't got professional indemnity insurance, and they don't have CPD requirements [continuing professional development]. While the salaries for newly qualifieds are going up, we are being low balled by accountants without professional qualifications.' He argues that potential clients believe it is acceptable to use the services of an unqualified accountant or business advisor without weighing up the consequences of doing so. 'With a recession looming, [clients] are looking to cut costs,' he adds.

Robert Jackson agrees. A Fellow of the Association of Authorised Public Accountants, a registered auditor, and director of RL Jackson & Co and independent financial advisors Baronworth (Investment Services), Jackson observes that many clients of firms trading without the backing of professional qualifications will be dissatisfied with the service they receive.

'We are all tarred with the same brush,' says Jackson, adding that the public often doesn't differentiate between an authorised public accountant who is professionally qualified and an accountant without qualifications. He says that other titles, such as tax consultant, are also used but counters that the accountancy profession in the UK will not permit members to use any title they want. 'As regulated professionals, we are heavily monitored.'

Jackson notes that professional indemnity insurance, which is based on a firm's gross fees, reassures clients that the services they pay for are legally covered. And, in the event of a complaint, they can expect a professional accountancy body to take action. 'Accountants who are unqualified and unregulated can pop up and disappear - I have seen this. They just disappear and leave the mess with the client,' adds Jackson.

These grievances against unqualified competitors led Alan Shooter to lodge an e-petition on the 10 Downing Street website, urging the Government to propose legislation to protect the term accountant and allow only qualified and regulated professionals to trade as accountants. More than 4,000 individuals signed the petition 'to prevent unqualified accountants, tax and financial advisors providing services unless they have professionally recognised qualications.'

Andrew Harding, ACCA's managing director of finance and operations, is supportive of the e-petition. 'ACCA is pleased to see the e-petition has done so well. Working with the Consultative Committee of Accountancy Bodies, ACCA is keen to protect the term accountant. This is a very important issue for ACCA members and students alike.'

However, the petition was rejected by the Prime Minister's office. In its response to the petition, 10 Downing Street said: 'The Government is not persuaded that introducing statutory regulation of those who provide accountancy services would justify the costs to business. The Government is aware that ?the professional accountancy bodies have suggested that the term accountant should be restricted to those who hold recognised professional qualifications.

'However, there are a number of potential drawbacks to introducing legislation to restrict the use of the term accountant. These include practical difficulties about who should be allowed to use the term, increased regulatory burden and increased costs for business and anti-competitive effects in the form of restricted choice, higher prices and reduced innovation in the supply of services. All of these consequences would particularly affect smaller businesses. As with most services, users may wish to check whether the provider is a member of an accredited professional body before making a decision on who to engage.'

Liberal Democrat Deputy Leader and Shadow Chancellor Vince Cable, tabled an Early Day Motion in the House of Commons, backing Alan Shooter's petition. The motion was supported by another 55 MPs, from each of the major parties.

Cable says he is fully behind the campaign. 'I had been approached by people in the profession who were concerned that the term was open to misinterpretation and abuse and who felt there should be clarity in defining the professional status,' he says. 'I have subsequently talked to other groups like tax accountants, who feel similarly. So many people are using this term loosely. In the case of a doctor there is a clear definition of who a doctor is and who isn't and similar clarity would be useful for accountants.'

However, Cable concedes that not all his Parliamentary colleagues are persuaded by the arguments. 'There have been some critics,' he admits. 'Not everyone agrees with this motion. Some people oppose it because of their own experience of dealing with professional accountants. But I think on balance there are advantages in defining professional status clearly.'

Despite the failure of the e-petition and Early Day Motion, this is not the end of the matter. A spokesperson for the Institute of Chartered Accountants in England and Wales, speaking also on behalf of the Consultative Committee of Accountancy Bodies (CCAB), indicates that professional accountancy bodies continue to support the call for regulation and protection of the term accountant, but have to recognise that the case has yet to be made sufficiently effective.

'The issue is more about tactics and approach rather than policy,' says the ICAEW spokesperson. 'The CCAB's position is that protection of title is something we would like to obtain. But we recognise that is not that easy. You have to persuade policymakers and government there is a public interest case.

'Building examples of why title protection is in the public interest is key to achieving this. That is the steer we have had from the Department for Business, Enterprise and Regulatory Reform. Where we are is about how we build that case and make this argument. This is not something that is going to happen overnight, but will take some time. You can't rely on the self-interest argument, you have to demonstrate the public interest case.'

Paul Gosling is a freelance business journalist and contributing news editor of accounting and business