As Julia Penny stepped into the ICAEW presidential hotseat last month, it’s fair to say she assumes the role at a time of enormous change, against a backdrop of regulatory upheaval and with trust in the profession having taken something of a knock in recent times.
She also takes up the reins of Chair of the Consultative Committee of Accountancy Bodies (CCAB) for 2022-2024, leading a group representing ACCA, CIPFA, ICAS, Chartered Accountants Ireland and, of course, ICAEW.
Its 150th anniversary may be on the horizon, but ICAEW remains at the forefront of business and the economy today, Penny says. ICAEW’s strategy for the decade to 2030 has been designed to meet the needs of a business world that bears little relation to the one in existence when ICAEW was formed in 1880, Penny explains. “It’s a different world; we’ve moved on,” Penny says.
In particular, a focus on sustainability – one of ICAEW’s five strategic themes – underlines the important and growing role of the accountancy profession as meeting the UN sustainable development goals (SDGs) becomes a mantra for businesses of all shapes and sizes.
Penny is conscious that some ICAEW members might question the focus on SDGs, but the rationale is clear. “It feels that in the past couple of years, people have realised that sustainability is something that everybody has to embrace. If we don’t have a sustainable planet, then we won’t have any businesses anyway,” she says.
“Chartered accountants have a really important role in terms of our strategic input to businesses to ask: ‘Can you survive and are you sustainable?’ The question is, are we walking the walk as well as talking the talk?” Penny asks.
In anticipation of the emergence of mandated international sustainability reporting standards, the skillsets of accountants make them ideally placed for the measurement and assurance of sustainability metrics, a market set to explode – but, even now, climate risk and sustainability issues are an important consideration across many accountancy roles, Penny says.
“I was recently talking to a partner at a Big Four firm specialising in debt financing for big companies. All of those deals have sustainability aspects to them, so you've got to make sure it's either a sustainable investment, or that it's part of a transition to net zero. That’s just one example,” she says.
At the same time, Penny believes the focus on sustainability is an opportunity to rebuild trust in the profession, which is still reeling from the fallout from recent corporate scandals, “ICAEW has always been about strengthening trust in the profession, so that’s not new – but it’s about looking at how things work today. And of course, trust has lots of different aspects. It isn’t just audit – it includes tax advice, the anti-money laundering checks that we do and the sanctions checks that have become so important with the war in Ukraine.”
The trust in the profession theme has broader implications, as the war for talent means the attractiveness of the profession is not something that can be left to chance. Although the full picture has yet to emerge, the recent headlines of the junior auditor being hauled over the coals for his part in the Carillion collapse are at best unhelpful and at worst damaging, Penny believes.
“In my mind, the regulator hasn’t quite got the balance right in terms of stick and carrot,” she says. “Anybody who’s at university thinking about which career to pursue, even existing students who are already on a training contract, will worry about the implications of doing something wrong at a junior level. The regulator is right to demand better [audit] quality, but the reality is things will always go wrong. Fines or other sanctions must be proportionate.”
She is confident that the new international standards on quality management will have a positive impact on audit quality, moving away from a box-ticking approach to one that forces firms to identify quality risks. However, the cultural issues at the root cause of many problems remain a harder nut to crack, she warns. “You need to have an environment where people are happy to speak up even against their seniors. But I don't think that helps your career because people are used to a power hierarchy.”
But changing culture is hard, Penny explains, because it requires everybody, including top leadership, to buy into it. “You want an environment in which it’s okay to question. That would be a good part of strengthening trust and making the profession attractive as well: this is a good place to work because there is a good culture.”
At the same time, embracing digitisation is essential if the profession is to have the edge over others in a hot labour market and as competition for the best candidates steps up, she says. The profession also needs to do a better job of highlighting the broad range of career opportunities that exist under the banner of accountancy.
The good news is that ACA student numbers continue to rise, but staying relevant to this cohort of new members is not something that can be left to chance and Penny believes clear communications of ICAEW’s strategic themes is vital to achieving that aim.
Meanwhile, membership of a professional body has an important supporting role to play, bearing in mind the increasing career mobility of accountants, she says. “I think there’s a job to be done to show that being in a professional body for your whole career gives you a home to come back to.” No matter where you end up, having the validation of ACA membership as a trusted adviser goes a long way.
Nor should the networking benefits of membership be underestimated, Penny says, particularly for those exploring new industries or roles and keen to develop new skills. The ICAEW’s district societies across the country and similar overseas groups, allow members to meet in person, but with virtual working now mainstream, the opportunities to engage with relevant ICAEW Communities is no longer limited to your physical location.
“I think there’s probably still some more work to do to show how we support a member throughout their career. For example, the Finance in a Digital World e-learning modules and the ICAEW Climate Hub help members understand how things like new technologies and sustainability might apply to them. There’s a lot of support in the form of information, education, helplines and the opportunity to ask questions over the phone, by email, via webchat or even the ICAEW bot, Mia.”
Use of technology and data is both a risk and an opportunity, Penny admits, but accountants are well placed to embrace digitisation as a force for good, thanks to upgrades to the ICAEW curriculum that include use of AI tools for audit and top-up training on areas including a data analytics certificate programme.
Supporting the transformation of trade and economy is another of ICAEW’s strategic themes. It’s not just about embracing digital ways of working, but also the impact of automation and the growing gig economy on tax.
The United Nation SDGs include equity and fairness among people, another theme that Penny wants to focus on during her tenure, more specifically the issue of strengthening the profession by attracting talent and building diversity.
As only the fourth woman to assume the role of ICAEW President, the issue of diversity in its broadest sense, particularly at senior levels, is a perennial problem across the profession and a subject close to Penny’s heart. “We had 138 male presidents and no one ever thought, oh gosh it’s a man again! It will take a bit of time, but when we’re recruiting and when we’re promoting, we need to pay attention to diversity imbalances because without being proactive, nothing will change.”
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