Cleaning the accountancy stables

Reader Ravi Fernando in an open letter to the Presidents of CIMA, ACCA and Chartered Accountants has raised some issues relating to governance in the profession.

The letter states:.
This is with reference to recent revelations in The Sunday FT on the conduct of accountancy firms in general. Like doctors and lawyers, accountants are respected people in society. But today like all other professions we see a steady deterioration in the conduct of your members. If you do not stem this rot the accountancy profession will lose its value and young people will look to other professions for inspiration. As a businessman engaging people from your institute I would like to propose that the three institutes introduce a mandatory code of conduct for members and practising firms incorporating the following:

* Members shall not canvass for business openly undercutting each other. Accountancy firms engaged in statutory audits should be barred from providing any other services to that company directly or indirectly.

* All members accused of breaching the code of conduct should be dealt with within a reasonable time.

* Members should be required to sign a code of good conduct. The respective councils should not have members who have been found guilty of any misconduct. There should be mandatory training programmes for members so that they are updated.

* Members should not involve in share trading if they have direct or indirect dealings with a public listed company. Finally practicing accountancy firms should be told specifically what type of business they should and not do to ensure uniformity and good business ethics.

Given the recent conduct of some audit firms/members and the issue of the valuation of Sri Lanka Insurance resulting in a one billion loss to the government it is time for the institutes to stamp their authority and bring some professionalism into the profession.