What can we learn from countries that regulate accountants?

The UK’s businesses need protection from rogue and unskilled accountants. Here’s what we can learn from how accountancy regulation works in other countries…

For a country that is one of the world’s biggest financial centres – not to mention being largely responsible for formulating much of the principles that guide modern accountancy in the 1800s – it seems bizarre that the UK allows unlicensed accountants to ply their trade.

In other countries, regulation of accountancy works a little differently, however- from state regulation in the US to the Netherlands where accountants are required to take an oath.

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How is it regulated? The accountancy profession in Australia celebrates its 20th anniversary of being regulated this year, thanks to the Corporations Act 2001 and the Securities and Investment Commission (ASIC) Act 2001.

The legislation created the two professional accountancy titles used in Australia today: registered company auditor (RCA) and qualified accountant. There are also three professional accountancy organisations (PAOs) that regulate professionals: CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ), and the Institute of Public Accountants (IPA). All members of these PAOs are required to adhere to the Accounting Professional & Ethical Standard (APES) 110 Code of Ethics for Professional Accountants, which is based on the International Code of Ethics for Professional Accountants, as well as Australian Accounting Standards.

The benefits: Having a central body such as ASIC supervising accountancy brings many advantages. It registers accountants who meet the professional requirements, sets CPD for the industry, conducts regular reviews of audits to make sure they’re compliant, plus it’s also got the power to investigate breaches and issue sanctions (e.g. penalties/fines) for errant accountants.


How is it regulated? Whisper this quietly, but the Irish accountancy industry isn’t officially regulated. However, Ireland is widely acknowledged as having robust governance of accountants. The Companies Act 2014 determines the main professional and ethical requirements for professional accountants in Ireland. Meanwhile, the Irish Auditing and Accounting Supervisory Authority (IAASA) supervises how Prescribed Accountancy Bodies (PABs) such as ACCA, CIMA and ICAEW regulate and monitor their members. [NOTE TO DAVID: AAT DOESN’T SEEM TO BE A PAB IN IRELAND]

Even so, if you’re not affiliated with any of the afore-mentioned bodies, you can still call yourself an accountant. There was one case of a man expelled in 1998 for offences such as paying client funds into his own firm, who was still found to be working as an accountant many years after being convicted.

The benefits: With PABs being under the purview of IAASA, it ensures high professional standards are met for members of these organisations.

The Netherlands

What regulation looks like: Most people are aware of the Hippocratic Oath, the ethical pledge uttered by doctors. In the Netherlands, accountants have to swear a similar oath which vouches for their personal responsibility in the profession.

All accountants must also be accredited by the professional body, NBA (the oath is undertaken in their offices).

Becoming an accountant in the Netherland involves many years of studying. NBA has two classifications of accountants: Registered Accountants (RAs) or Accounting Consultants (AAs), depending on the course of study at university level. To become an RA or AA, aspiring accountants will need to hold a degree from a recognised university, along with three years’ practical experience and pass the NBA’s examinations. On top of that, RAs also need to have master’s degrees, and be specialised in financial auditing and external reporting.

The benefits: The robust regulation in the Netherlands sets auditing and ethical standards for accountants. Any accountants breaching these ethics is referred to a disciplinary. CPD is important too: the Vereniging van Registercontrollers (the Netherlands Association of Registered Controllers), which accountants may join voluntarily, offers services in management accounting, financial accounting, integrated reporting and corporate governance.

The United States

What regulation looks like: As with most systems in the US, the regulation of professional accountants in the United States is primarily carried out at state level, by the state boards of accountancy. The state boards coordinate through the National Association of State Boards of Accountancy (NASBA), and the Public Company Accounting Oversight Board (PCAOB) for firms auditing public business entities. The professional accountancy organisations – the American Institute of Certified Public Accountants (AICPA) and the Institute of Management Accountants (IMA) – each have self-regulatory practices for their respective members.

Similar to chartered accountants in the UK, the certified public accountant (CPA) is a protected term in the US.

The benefits: Each state board sets initial professional development (IPD) and sets ethical requirements too. The state board also has the authority to carry out investigation and disciplinary processes on licensed accounting professionals, limiting the potential for rogue accountants to scam their clients.

How you can help Last November, HMRC floated the idea of mandatory PI insurance for tax advisers. But to champion regulation, and really raise standards, it needs to gather more evidence, including from accountants. AAT, therefore, invites members to share their experiences.

You can help in two ways:

With your help, AAT will be able to compile a dossier, which we will share with HMRC and MPs.

Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.

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