8.1. The Accountacy Profession Flashcards
Structure of the accountancy profession…
Formed of a hierarchy.
- Employees and employees –> accountancy professional associations –> Financial Reporting Council (FRC).
Deemed a profession as accountants profess knowledge of a particular field.
Characteristics of the profession…
Passing professional exams (~15 exams).
Practical training (~450 days work experience).
When qualified, there is a code of conduct, ethical considerations and continued professional development.
Accountants are accountable to their employers and professional bodies.
Functionalist interpretation…
The profession contributes to the cohesion of society and helps it to function.
Firms need accountants to present financial reports and allow people to make decisions about a business (including managers and shareholders).
It is a functional role.
Interactionalist interpretation…
Suggests accountants protect their place and identity in society.
Not everybody can be an accountant, you must be well-qualified.
This means accountants can have a sense of professionalism and importance.
Critical approach…
Accountants help to maintain the dominance of capital in society.
Does this mean that accountants help to maintain capitalism?
Professional bodies…
ICAS, ICAEW, CAI.
ACCA.
CIPFA.
CIMA.
What accountants do…
Assurance (auditing): statutory auditing.
Advice / consultation: can be contracted to give local advice to local councils / governments. Also work within companies to help with company formation, restructuring, acquisition, disposal, actuarial, corporate finance, corporate governance and ESG.
Taxation: advice and acting as an agent when dealing with tax authorities.
Accounting: general accounting service for clients. Maintaining accounting systems, preparation of statements and other advice.
Financial reporting council…
Established in 1990 as an independent regulator to set and enforce accounting standards.
From 2004, they oversaw the regulation of professional accountancy bodies and their members, with their role expanding into corporate governance and auditing.
Has been restructured many times due to accountancy scandals.
Modern format: 2 governance committees and three regulatory committees. They must report to the Department for Business and Trade.
Beyond the FRC…
ARGA (audit, reporting and governance authority).
Restructuring in an attempt to improve the public trust in the businesses who are audited by the accountancy firms.
