The following is an extract from the monthly Barometer press release issued by the University on Monday 19th September 2005.
Barometer panellists have their say on audit thresholds, new reporting and auditing standards , the accountancy profession and business advisers in general.
Survey 35 saw a 'special edition' featuring a set of questions specially chosen by the Professional Oversight Board for Accountancy (POBA), part of the Financial Reporting Council.The mix of respondents changed from past months, as many new panellists were members of professional accounting bodies, broadening the included range of types of advisers used by businesses.
Among a number of topics aired, panellists were asked if the number of small companies they see had changed as a direct result of increases in the 'audit threshold'. Despite the fact that the new threshold offered the companies the choice of moving from (relatively expensive) chartered or certified accountants to (relatively inexpensive) bookkeepers or technicians, only 23 respondents reported a decrease with four recording a significant decrease (more than 20 per cent). Nineteen said that numbers had decreased somewhat (up to 20 per cent). More than 50 respondents reported that they had experienced an increase in the number of clients.
Companies continue to have accounts audited despite eligibility for exemption
Despite eligibility for exemption, some small companies continue to have their accounts audited for various reasons and, of six options offered by the survey, three were rated much higher than the others as reasons why accounts were still audited. 'Required by banker or other lender' was opted for by 207 respondents, while 'gives management confidence in controls' attracted 137 responses. 'Required by non-management shareholders' was chosen by 120.
Accounting and auditing problem areas named.
Both UKBAB and its sister survey the UK Business Barometer were asked about areas in which companies experience problems in relation to accounting and auditing. Of the six options offered, advisers stated that, in the case of small companies, the two main areas of difficulty were 'understanding and interpreting the statutory financial accounts', opted for by 307 respondents, followed by 'management accounting including budgeting and planning' with 279 responses.
In the case of medium-sized companies, 139 of the UKBAB panel also chose 'understanding and interpreting the statutory financial accounts' but the highest response, 155, was for 'preparing statutory financial accounts'.
The UKBB survey, which seeks the views of the businesses themselves, indicated that the two problem areas, as far as they were concerned, were 'preparing statutory financial accounts' and 'understanding and interpreting the statutory financial accounts'.
Is the boundary between accountacy and non-accountancy
practices becoming blurred?
Amongst the group of advisers contributing to the survey, a sizeable minority indicated that they include accountants, bookkeepers and technicians as client facing staff, and that they do advise in this area, even to the point of providing assistance in preparing statutory financial accounts. This, together with a move by some to market accountants as business advice organisations, can be seen as evidence that the boundary between accountancy and non-accountancy practices is becoming blurred.
Full versions of press releases can be found on the 'Presspack' pages of the project's websites, as can 'Survey Presspacks', which include further analysis and panellists' comments. To access them, please use the links below.
For the UKBB click here.
To reach the UKBAB 'Presspack' page, click here.
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