Accountants and auditors have a unique opportunity to be the early warning system for companies. We may not want the responsibility to query whether our client’s business model is sustainable or even appropriate, but we, as a profession, have that responsibility nonetheless.
I say this, not as an accountant in practice, but as Finance Director of a Care Home group who spends hours every month trawling through forecast models to ensure the business is robust and sustainable; not for my own benefit, but for that of the service users. A Care business that is not financially stable cannot, in my mind, provide reliably safe care, so the question as to whether the Care business is financially sustainable is a critical one that should be thoroughly investigated by its auditors.
Personally, I’m becoming increasing worried by two factors – first, a continued lack of financial oversight by CQC over vast swathes of the Care Home sector and, secondly, what I perceive to be a lack of sustainability in the funding models of certain parts of the Care Home sector – to the extent that I fear the reaction of the media when the next care home group closes for financial reasons, potentially place residents’ safety at risk, and the accountancy profession is asked why it did not comment on the unsustainable funding structure.