Serving the Public Interest

Our members operate in business, government, the third sector, and in practice. Inevitably, the practice sector—audit, in particular—is the greatest focus of regulatory attention. Along with competence and an ethical dimension, a hallmark of a profession is an element of self-regulation. This encourages compliance with the spirit of professional standards, rather than an adversarial “show me where it says I can't do that” attitude.

Unfortunately, for good and bad reasons, society has come to distrust “the system” that professions are considered a part of. Consequently, whenever something goes wrong, there is a tendency to step up independent regulation. How this is done varies, particularly in auditing. In the united Kingdom, we have a sort-of partnership: the professional accountancy bodies register and regulate all audit firms and handle monitoring and discipline for the majority of audits. The independent Financial Reporting Council oversees what we do and directly handles the monitoring and discipline of public-interest audits (which, broadly, includes all listed companies). This tries to avoid an “us against them” mentality—though it does not prevent us from falling out at times!

All of this presents challenges, with conflicting objectives, perception, and reality pulling in different directions. Although regulatory regimes vary across the Atlantic, the challenges are similar. For example, the profession has a public-interest obligation, but what does that mean? One might argue that doing a high-quality audit is what the public interest requires—there are several issues to consider, such as balancing the confidentiality needed to elicit information with a citizen's obligation to society to do something about illegal acts that are identified. For practitioners in other areas and accountants not in practice, the obligation is even less clear; they compete with other professionals who have different obligations, as well as nonprofessionals with no obligations. Duties to employers might also conflict, though professional duties must prevail; we all depend upon each other's behavior for our common reputation.

The Challenge of Regulation

I mentioned the purpose of self-regulation and society's mistrust of it. External regulators tend toward very precise rules in order to avoid ambivalence and suspect judgment, because that is what they were set up to do. The trouble is that such an approach, if taken too far, can result in simply “checking the box,” at the expense of actually doing a good job.

So, what is the relevance of the accountancy profession today? External regulators have specific roles and viewpoints. Without the wider professional self-regulatory perspective, the whole thing would rapidly become a game of “who can outwit whom the quickest.” Then, there is the important task of training people to be those “good accountants.” In the united states, universities play a major role in this, so it could be done without the backing of a profession. But which standards and values would they be training toward? This is where the profession really comes in. We need to ask what those standards and values should be and draw stakeholders together to agree upon what is good for society, workable for the profession, and valuable for users.

The AuditFutures Project

For example, ICAEW launched Audit-Futures to inspire innovation and positive debate about our profession's role. We believe that accountancy can be part of the solution to society's wider problems and, indeed, can take the driver's seat. AuditFutures is evolving as a story about a profession critically evaluating itself and articulating a vision for the future. It is about the public interest and the issues of trust in 21st-century society.

With AuditFutures, we created an inclusive and collaborative environment where difficult questions can be addressed by a diverse global community. We have debated the need for a profession and its role in society at a series of workshops, where senior audit partners worked together with civil society leaders, students, and even activists from the Occupy movement. We partnered with the Royal Society of Arts to publish a groundbreaking report, “Enlightening Professions? A Vision for Audit and a Better Society” (http://www.auditfutures.org/features/enlightening-professions/).

Through our engagement programs, we are working with universities and professional firms to broaden education and training beyond vocational skills, fostering enlightened values, independent critical thinking, and self-reflection. We aim to empower young leaders to take on a dynamic role in driving the profession forward. With ambitious long-term collaboration with leading design institutions like the Royal College of Art, we are bringing design and systems thinking to accountancy to explore new ways for commercial firms to work in the public interest.

No single organization can tackle the wider systemic issues that we are facing today, which is why we are building partnerships. We invite people to create something together that will have a lasting significance. We hope you can join us.