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PROFESSIONAL PRACTICE IN THE UK

PROFESSIONAL PRACTICE IN THE UK. professional practice in the uk. A PERSONAL VIEW. BY GEOFF BRITTON. A PERSONAL VIEW BY GEOFF BRITTON. PRESENTATION SUMMARY. EUROPE AND THE UK THE UK ACCOUNTANCY PROFESSION ACCA WITHIN THE UK ACCOUNTANCY PROFESSION GBAC – GOVERNANCE

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PROFESSIONAL PRACTICE IN THE UK

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  1. PROFESSIONAL PRACTICE IN THE UK professional practice in the uk A PERSONAL VIEW BY GEOFF BRITTON A PERSONAL VIEW BY GEOFF BRITTON

  2. PRESENTATION SUMMARY • EUROPE AND THE UK • THE UK ACCOUNTANCY PROFESSION • ACCA WITHIN THE UK ACCOUNTANCY PROFESSION • GBAC – GOVERNANCE HISTORY & GEOGRAPHY STAFF –PRESENT STRUCTURE TYPICAL BUDGETS TRAINING INFORMATION TECHNOLOGY RELATIONSHIP WITH OTHER ORGANISATIONS FUTURE • CLIENT RELATIONSHIP OVERVIEWS

  3. EUROPE AND THE UK

  4. THE BRITISH ECONOMY • POPULATION • ENGLAND 50.7m • WALES 2.9m • SCOTLAND 5.1m • NORTHERN IRELAND 1.7m • ISLE OF MAN 75,000 • JERSEY 91,000 • GUERNSEY 65,000

  5. COMPARITIVE WEALTH DISTRIBUTION IN EUROPE

  6. COMPARITIVE WEALTH DISTRIBUTION IN EUROPE

  7. COMPARITIVE WEALTH DISTRIBUTION IN EUROPE

  8. COMPARITIVE WEALTH DISTRIBUTION IN EUROPE

  9. UK ACCOUNTANCY PROFESSION

  10. LEGAL FRAMEWORK • The Accountancy Profession – not state regulated apart from money laundering, auditing, insolvency and financial services (investment and financial products advice). • Government delegates responsibility by allowing professional bodies self regulation as RECOGNISED SUPERVISORY BODIES (RSB). Audit Regulation is effected by The Public Oversight Board (POB), Insolvency by The Insolvency Service and Financial Services by The Financial Services Agency (FSA). • Many small accountancy practitioners are not members of any self regulating body and they cannot participate in audit or insolvency work and cannot be financial services providers • Many accountancy firms are also Auditors, Insolvency Practitioners and Financial Services Providers. Each discipline requires a separate regulatory permission

  11. LEGAL FRAMEWORK • Legally Acceptable Audit qualification are defined by statute. UK auditors must be members of ICAEW, ICAS, ICAI, ACCA or AAPA • Most firms of any size in England are regulated by ICAEW or ACCA • Taxation services unregulated • Advisory services unregulated • Practices can be Sole Practitioner, Partnerships, Limited Partnerships and Limited Companies

  12. THE UK THE ACCOUNTANCY PROFESSION MEMBERS IN THE UK AND REPUBLIC OF IRELAND (2001 – 2006) ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL 2001 49,085 44,979 13,192 105,804 11,196 12,870 237,126 2002 52,678 46,820 13,213 108,157 11,840 13,004 245,712 2003 54,209 48,986 13,223 110,468 12,186 13,312 252,384 2004 56,837 51,386 13,266 110,776 12,757 13,811 258,833 2005 59,059 53,697 13,317 111,114 13,523 14,255 264,965 2006 61,386 55,580 13,381 110,894 14,329 14,535 270,105

  13. THE UK THE ACCOUNTANCY PROFESSION MEMBERS WORLDWIDE (2001 – 2006) • ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL • 86,929 57,616 13,471 121,356 12,515 15,042 306,929 • 95,416 59,782 13,521 123,719 13,039 15,166 320,643 • 2003 98,293 62,361 13,510 125,643 13,551 15,749 329,107 • 2004 104,613 65,053 13,499 126,597 14,193 15,931 339,886 • 109,588 67,670 13,565 127,826 14,973 16,388 350,010 • 115,345 70,016 13,661 128,416 15,791 16,710 359,939

  14. THE UK THE ACCOUNTANCY PROFESSION STUDENTS REGISTERED WORLDWIDE (2001 – 2006) • ACCACIMACIPFAICAEWICAIICAS TOTAL • 2001 173,662 75,263 2,322 10,114 3,008 2,080 278,179 • 2002 174,158 77,923 2,412 9,648 3,392 2,327 300,801 • 2003 186,902 81,590 2,707 8,694 3,000 2,431 319,683 • 2004 203,602 84,868 2,954 8,910 3,167 2,497 305,998 • 222,644 86,565 3,194 10,406 3,880 2,636 329,325 • 252,767 88,256 3,071 13,551 4,525 3,154 365,324

  15. THE UK THE ACCOUNTANCY PROFESSION SECTORAL EMPLOYMENT OF MEMBERS WORLDWIDE 2006 ACCACIMACIPFAICAEWICAIICAS Public Practice 31,143 1,400 - 57,787 5,211 4,678 Industry & Commerce 63,439 49,011 1,229 44,945 9,316 6,851 Public Sector 11,534 12,602 9,152 2,568 - 668 Other 4,613 2,100 273 6,420 473 1,336 Total 110,729 65,113 10,654 111,720 15,000 13,533 Retired 4,613 5,601 3,005 16,694 789 3,174 GRAND TOTAL 115,342 70,714 13,659 128,414 15,789 16,707

  16. ACCA PRACTICE FRAMEWORK • ACCA is responsible to the Public Oversight Board in respect of Audit and to the Department for Business Enterprise and Regulatory Reform in respect of Insolvency work. It takes upon itself the task of regular visits to Practitioners wishing to be ACCA approved employers and for those wishing to attain the quality checked seal in respect of general accountancy work. • ACCA Members in Practice must hold a valid Practising Certificate and in addition those carrying out audit work must also hold an Auditing Certificate, submit to regular monitoringvisits (approximately every 5 years) and hold professional indemnity insurance.

  17. ACCA PRACTICE FRAMEWORK • Strong codes regarding ethical standards are strictly enforced but formal complaint is usually needed in order to start the disciplinary process. This complaint can be made by any person including monitoring officers of the Association. The disciplinary committees are entirely independent of ACCA and the judging panels are made up of lawyers and lay people as well as accountants. The Chairman is never an accountant and usually from a legal background. • All staff working for any accountancy practice are individually required to comply with money laundering regulations. • Control of all Accountancy and Auditing Practices monitored by RSB’s must be controlled by qualified personnel but minority shareholdings are allowed to be in the hands of others.

  18. GOVERNANCE

  19. ACCA • Letter of Engagement guarantees ACCA • standards • Statutory audit regulation – 5 year inspections • Availability of practice assurance • Approved employer status – • internationally accepted standards helps • recruitment

  20. Employer Details Full Name/Date of Birth of Employee Job Title Start Date Remuneration Hours of Work Holiday Entitlement Training Rules Standards of Conduct Confidentiality & Non Disclosure to Others Restrictions After Leaving IT Policy Sickness – Statutory Entitlement Working Parents Pensions Trade Unions Retirement Employment Termination Requirements Grievance Disciplinary Changes in Circumstances Outside Interests GBAC Property Money Laundering CONTRACT OF EMPLOYMENT

  21. ENGAGEMENT LETTER Standard terms and conditions • Adherence to ACCA standards assured • Confidentiality • Investment services excluded • Declaration of commissions • Treatment of client monies • Fees and payment methods • Retention and access to records • Quality control • Complaint procedures • Applicable law • Internet communication limitations • Data protection • Money Laundering • Limitation of liability

  22. CLIENT ENGAGEMENT LETTER • Responsibilities of Directors for Limited Companies • Responsibilities of client in providing information • Responsibilities of GBAC as accountants, auditors or advisors • Scope of work - scope of audit where relevant - services to be provided • - services excluded but available • Form of appropriate GBAC reporting • Limitation of liability – 15 times fee (NB. The practice is covered for any single claim of £2m. The practice has never had a claim) • Standard terms and conditions apply

  23. INVESTORS IN PEOPLE • Voluntary registration • Regular quality inspections • Best practice must be adopted • Enables good staff relations and quality recruitment

  24. CORPORATE SOCIAL RESPONSIBILITY • Low environmental impact profession • Free advice for social projects and enterprises • Endeavour to recycle all waste • Committed to being energy efficient • Flexible working • Car sharing to reduce travel pollution

  25. HISTORY & GEOGRAPHY

  26. history … • Formed 1972 – Aged 28 • 3 early attempts at partnership, all discontinued within 2 years • Sole practice since 1984 • Limited company formed April 2008 • Succession to be resolved by 31 August 2009 • Year on year organic growth • Fees to 31 August 2008 – around £1.5m with 36 full and part time staff

  27. THE BRITISH ISLES BARNSLEY

  28. STAFF

  29. PRESENT STRUCTURE

  30. typical staff budgets …

  31. Trainee Accountant

  32. Trainee Accountant

  33. Senior Accountant

  34. Senior Accountant

  35. TRAINING

  36. EXTERNAL QUALIFICATION TRAINING • ACCA • 14 exam papers over 3 years • 3 year’s relevant experience • Approved employer requiring regular inspections • AAT • 6 exam papers over 2 years • 1 year’s relevant experience • CIOT • 4 exam papers over 1 year • 3 year’s relevant experience • ATT • 4 exam papers over 1 year • 2 year’s relevant experience

  37. EXTERNAL QUALIFICATION TRAINING COSTS ACCA AAT CIOT ATT Course Fees 11,605 4,000 1,990 1,990 Exam Fees 728 450 275 450 Time off 8,520 2,400 1,800 1,800(Avg. £60/day) Sundries 200 200 200 200 TOTAL 21,053 7,050 4,265 4,440

  38. INHOUSE CPD TRAINING • 8 sessions per year – 3 hours • 50:50 GBAC : Staff Time • Updates on all relevant subjects • Courses in 2007 • HMRC Construction Industry Scheme • Personal Tax • Audit & Accounts x 2 • Finance Act & Corporate Tax x 2 • Company Law • Money Laundering • Annual Cost circa £8,000 (less government contribution of around £3,000)

  39. IT • Integrated system • Client records • Email and telephone • Practice financial records • Timesheets • Audit files, Accounts production, Tax • Remote access • Move towards • Paperless office • Client access

  40. RELATIONS WITH AUTHORITIES • Substantial recent changes within the UK Government's Treasury function have merged the departments dealing with direct taxation. VAT, Income Taxes and Capital Taxes are now dealt with by a unified department known as HM Revenue and Customs. • Moreover the local nature of tax offices has shifted toward larger and more specialist units dealing with more specific taxation matters. • Local offices meant local connections and the personal nature of relationships with the profession has almost disappeared. • Our relationship with the authorities continues to be good but we are very mindful that we do the best deal for our client and we hope that this attitude earns respect rather than resentment.

  41. RELATIONSHIP WITH OTHER INSTITUTIONS • Relationships based upon perceived view of integrity and ability • Mutual recommendations are very important • Best deal for client always gains respect and not resentment • Do not always accept state interpretation of legislation • Wide range of specialist consultants • Never afraid to say we don’t know – but we will always find out.

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