Business is going to demand new services to help them navigate changes and complexity, and the accounting profession is positioned to be the providers, Kevin Dancey, CEO of the International Federation of Accountants told the Annual Meeting. “Our ethical core is our only difference from other professions – it is a huge advantage and I think we can use it to get to a good place… The public’s demands play to our sweet spot. We need to continue to push on our trust and ethics components.”
While Mr. Dancey said he did not discount the profession’s failures and scandals, he contends the profession’s aggregate message is pretty positive. He believes the profession does a bad job of communicating it is doing a good job. When IFAC conducted a study of public trust across the G20 countries, if found in every country trust was the highest in professional accountants. A paper released by the Dutch Parliament made the point that the profession has been good at doing audits but has not articulated that well. “I don’t think we should be timid about the value we bring to society,” he stated.
Although he predicts accountants will see a shrinking listed entity market, there will be a need for information that is useful, understandable, relevant and reliable. “We need convergence around a reporting platform that gives people the information they are demanding…Integrated reporting is a huge opportunity for us,” Mr. Dancey believes. The right business model is required, and he pointed to research that found a higher quality audit can be obtained from a multi-disciplinary firm (see sbr 10/19). “It is better to get the needed skills from inside the firm than from outside the firm,” he noted, but pointed out this is a totally separate issue from what services can be provided for audit clients.
Mr. Dancey told the meeting that the profession has to embrace technology “or we die.” New services will require new skill sets, but “You can only test so much information – so what is going to give?” Professional accountants in many countries are considering: “How big do we want our house to be? Who is going to be a professional accountant in the future?” IFAC is offering to share information on what is being considered internationally, as Mr. Dancey said. “It is a huge value to learn from each other.”
Regulators have a key role to play in ensuring audit quality, he noted, and divided regulators into those that have a “gotcha mentality” and those like the banking regulators “who have to be tough but they want that bank to succeed.” He recommended the banking regulators’ approach as the one needed: “Audit quality is the prize – and if we have that, other things will take care of themselves.”
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