Next week, Sir John Kingman will be publishing the findings of his review of the Financial Reporting Council, and the Competition and Markets Authority will be publishing its conclusions on its investigation of competition and resilience in the audit market. Both reviews were prompted by high-profile audit failings earlier in the year. Other reviews are in progress. I share our CEO’s view that we are at a watershed moment and that we must address the criticisms levelled at the profession. Doing so is – and must remain - one of ICAEW’s greatest priorities.
We should not however, lose sight of the fact that the vast majority of audits are completed to a high standard or of the vital work our profession does to create confidence in financial information and to facilitate both domestic and global trade. I have spoken about this in speeches from Sydney to Singapore and from Hong Kong to Dubai over recent weeks. A recent report by Oxford Economics for the Consultative Committee of Accountancy Bodies (CCAB) highlights the impact of our profession’s work
The combined membership of the five CCAB bodies – ICAEW, ACCA, ICAS, CIPFA and Chartered Accountants Ireland – is around 415,000 worldwide.
The report contains some striking statistics. The accountancy profession is estimated to have contributed £59 billion to UK GDP in 2017. £21 billion of this was generated by the accounting industry, with a further £38 billion estimated to have been contributed by ‘in-house’ accountants working in businesses across the economy. The UK also exported £3.1 billion-worth of accounting services in 2017, equivalent to 11 percent of all UK professional services exports.
The accounting profession also generated an estimated £8.9 billion in UK tax revenue, through income tax and National Insurance contributions paid on the wages of accountants and support workers in the accountancy sector, as well as business rates, VAT and corporation taxes paid by accounting services firms. Our contribution to tax revenues is of course much greater than this. We ensure the reliability and accuracy of information in the accounting systems of the clients and businesses we serve; we help those clients and businesses - as well as individuals – to pay the right amount of tax. We also provide the management information, guidance and advice that businesses need in order to succeed.
Speaking to audiences in the UK and around the world I have highlighted ICAEW’s ambition to help build a World of Strong Economies. I have said countless times now that a strong national economy can only exist where there is a strong national accountancy profession, and that a strong global economy is dependent on the existence of a strong global accountancy profession. I believe this passionately.
At a time when much of the press coverage of our profession is critical and when we are (rightly) reflecting on how to address that criticism, the CCAB report provides some welcome analysis and statistics to show that there is also another story to tell. We should be proud of this story and share it widely.