As I write this, members of NZICA and members of the Institute of Chartered Accountants of Australia are holding a vote to determine whether the two bodies should merge. Basically the central arguments for merger are based upon economies of scale, better service provision and better ability to agitate on behalf of its members. The reality is that with only 90,000 members as a combined institute we are still a small player internationally and I cannot necessarily see that merging will achieve anything to change that.
Recently I had a holiday in Australia and while there I ended up reading the magazine of the Institute of Public Accountants in Australia, the equivalent of our monthly accountants journal in New Zealand. I was very impressed with this particularly in comparison to our journal back here, which to be honest has become a cellophane covered door stop to many of us because month to month we do not find many in depth thought provoking articles to reach into it.
Reading the Public Accountant was an amazing and uplifting experience because actually there were interesting and relevant articles to me. They interviewed the new Commissioner of Taxation in Australia, Chris Jordan, who shared his vision for the ATO and why the ATO needed to be more like dentists. You may think that is a strange analogy, certainly I did, but it was a fascinating read. He thinks that like dentists were 30 years ago, the ATO and its staff need to become more engaging. They need to be able to relate more to their customers and to actually be able to talk to them. He also has some very out there ideas about basically being able to use your GST returns aggregated as your income tax return for the year. An interesting thought.
More interesting to me however was the fact that the Public Accountant magazine then looked at how William Buck in Victoria has had to change its business in the face of what it sees as an online price competition for the provision of accounting services. As it correctly notes, internet sourcing for basic bookkeeping services can see the cost per hour come as low as $5 when you are using people in low cost countries. Their reaction has been to move more into advisory services and place less reliance on compliance. They found a whole new area of expertise to work in around assisting clients and third parties who are facing financial difficulties.
There was also an excellent article about bury the billable hour concept developed by Ronald Baker. He is a long time protagonist for the idea that the billable hour is wrong. Like me, if you have read about the history of the billable hour and where it came from, there are certainly a lot of flaws in it. It penalises efficient accountants and tends to reward those that are inefficient, and sets value for the client in terms of the efficiency of the provider of the services. Providing accounting services should be about the value the client receives, not the cost the accountant incurs. Again an interesting article which goes through and looks at a number of practical decisions. This is then followed up by an article by Nina Hendy which looks at how do you establish a fair value for services.
At the same time as reading this magazine, I was also reading the Economist, in an online edition. While I was away on holiday I had taken my ipad with me and finally managed to work out how to use the newsstand function.
What this taught me is that there is a significant benefit in getting magazines online, firstly because you don’t end up with large cellophane door stops and secondly because you can read the bits that really interest you without having to worry about the rest. In this months Accountants Journal Uncle Tom, one of my favourite columns, made an interesting comment:
“If your audit experience is based on a small job 20 years ago, and you cannot answer straight off how many mandatory assurance standards there are on the XRB’s website, think carefully about your competency.”
This got me a bit worried as I didn’t know what XRB stood for let alone that it had its own website. What it did make me realise however is that accountants are a diverse bunch of people, and maybe the journal needs to refocus because it is simply providing common information to all accountants. Wouldn’t it be great if we could all receive information that was relevant to our particular part of the profession and be able to dig deeper into that. It is a bit like what the Institute did do well with the vote, it provided us with different levels of overview moving into greater detail should you want to. We could simply look at the high level, or we could go down to the detailed several hundred page discussion document behind it. This is effectively what we need to do with information provided to accountants. Maybe I do need to know what XRB stands for, but I don’t need to go any further. Those green pen holders, oops sorry, I shouldn’t have said that – that do audits, then can dig down deeper and learn about the XRBs website and its various standards.
Whether we agree with the vote or not to merge, it is good to see the Institute pushing the boundaries and challenging us for the future. However, there are a lot of things that perhaps could have been done and should have been done before looking at the merger, starting with the journal itself.