It's all about trust
- Publish date: 17 June 2014
- Archived on: 23 May 2015
In the first of my blogs around Tomorrow’s Practice, I thought I’d introduce myself and the scope of the project. I was a business journalist from 1989 until 2012, writing about how organisations and businesses – sometimes in fairly specific industry segments – IT, television, telecommunications and more recently across the regions of England and Wales.
I have seen at first hand how trusted relationships sit at the heart of business relationships, even as technology and regulatory change force a shift in methods and strategy. Accountancy is no exception. We can all probably remember where we were when the enormity of the Enron scandal burst onto our TV screens. If something really does sound too good to be true, too implausible and revolutionary, then it probably will end in tears.
We can all quote bad apples and rogue traders in any walk of life, and I certainly came across a few characters and chancers in my time as a journalist.
These days I spend my time working with businesses, getting them to think more about the future and helping them better understand the bits where politics meets business. Just as I worked on the GrowthAccelerator programme when it was called something else, I’ve also been working with the practice team at the ICAEW on this project for some time. We’ve started to get a real sense about what the different forces are that are colliding with practices.
I’ve recently written elsewhere about how unhelpful the term SME is when trying to understand and analyse business – you could possibly say the same thing about the term 'practice'.
Many of the challenges of the Big 4 – Deloitte, PWC, EY and KPMG are markedly different from the bulk of issues faced by chartered accountancy practices in small towns in the regions. I accept that, but each and every chartered accountant also shares their chartered and respected status. They have to sign up to a code of honour, a certain way of doing things.
We are going to be asking what will accountancy practices look like in the future? What services will clients require them to provide?
The key immediate questions are as important as the longer term strategic challenges - how will tax and audit work be performed in the future – what skills do accountants have that will continue to make them essential service providers to their clients?
Surveys reveal that audit as a share of total fee income is declining, but that other services are offered by practices.
Then there are a number of consolidation trends in the wider professional services market to consider. How will the recent spate of mergers and takeovers affect practices in the markets. There is no standard uniform answer, as each city or regional market is different. But are there common underlying trends?
We are also looking to discover what other services currently performed by other professionals could be included in the range of services offered in the future by chartered accountants?
The project will also explore how technology changes the way businesses require information – how it alters the way they meet regulatory obligations – but also how being on the move and having instant access to real time information becomes a critical factor in how practices serve their clients.
When you factor in all of the challenges of the future – as we plan to do through a programme of events – real and virtual – the most important factor is to return to that rock on which everything else was built. Trust.
Audit work may be declining as a proportion of the fees earned. But I sense no rush into alternative financial services, the law or surveying. I may be wrong, but that’s what is so exciting about embarking upon a journey such as this – keeping an open mind and challenging preconceptions.
Banks have bust their business model. The law seems to be in turmoil. Accountants are required to be creative, flexible and client focused, but there is also an expectation in how they will behave. Technology and that requirement for flexibility brings with it new challenges, but anything that shakes that core is simply not an option.
This is the first in a series of blogs I’ll be doing in the course of the research. I’d really welcome your comments and thoughts.