Why CAI is taking account of the global economy

INCOMING Chartered Accountants Ireland president, Brendan Lenihan, will represent 22,000 members in the year of its 125th anniversary.

“It is 50 years since the presidency has been based in Cork, back in 1963, partly because we are very proudly a 32-county body, and have been since 1888,” he says. “There has been a very strong rotation of the presidency, North and South, during that time. It is also a recognition of a very vibrant district society in Cork, which is also celebrating its 60th year.”

Chartered Accountants Ireland was established as the Institute of Chartered Accountants in Ireland, in 1888, to ‘watch over all of business/property in a faithful manner’ — which is still its ethos. “Although we might express them in slightly different words and think of the structures slightly differently, the same concepts propel us today,” Lenihan says. “It is very clear what the founders of our profession believed its objectives were, and it is good to be reminded of those.”

Earlier this year, a new global network, Chartered Accountants Worldwide, was launched: six institutes, from Australia, England and Wales, Ireland, New Zealand, Scotland and South Africa, combined to demonstrate the role played by chartered accountants in the global economy, and to encourage people to consider chartered accountancy when training, and when looking for financial expertise. To celebrate the network, the six institutes have launched ‘No Ordinary Business Minds’, a publication and website that profile the profession.

“There are huge opportunities in the accountancy profession, both here and abroad, a reflection of the fact that business is now very data-rich, and there is a constant need to communicate this clearly. The profession measures economic reality, communicates that in a meaningful way, and often participates in making decisions based on that. In a very complicated and information-rich world, the ability to measure, communicate and help in decisions makes the accountant a very valuable person,” he says.

With 22,000 members operating in 90 countries, Chartered Accountants Ireland’s growth is a reflection of the demand for professional skills — particularly in the current economic climate. The profession of 2013 faces some of the most difficult times in living memory.

“We now live in extremely challenging and precarious times, marked by problems, risks and threats, times when we need to be at our best in facing these challenges,” Lenihan says.

Since the economic crash of 2007/8, economies have suffered a prodigious decline in output — in excess of 10% in Ireland — where individuals have had huge losses in incomes and assets.

With unemployment increasing by 10% over the same period, there are not only economic problems to solve, but also social issues at a micro-level, involving firms, individuals and families.

“While the earlier part of the last century saw severe depressions in Ireland and abroad, this is clearly an enormously challenging time for our generation, greater even than the 1980s,” he says. “But, I believe that, with the right skills, attitude and resilience, we can overcome the current challenges and prosper again. As chartered accountants, we not only have the ability to measure where we are, but also to contribute to fixing the problems that we see around us, both at the micro- and at the macro-level,” he says.

The profession requires a quality skill-set, not only in communication, but also an emotional intelligence to deal with people, including clients, companies, customers, regulators and taxing authorities.

“In helping to diagnose and solve problems, the accountant is probably one of the first people to be called upon, and the strong training we get in objectivity, independence and ethical behaviour helps us to confront the reality of the difficult economy in which we all operate,” Lenihan says.

Among the more pressing items in Lenihan’s in-tray is the proposal to end the voluntary regulation of the profession.

“It may surprise the public that the profession of accountancy remains regulated, essentially, on a purely voluntary basis — literally, anyone can hold themselves out as an accountant,” he says.

The only accountants subject to regulation are those who choose to be members of accountancy bodies covered by the statutory body, the Irish Auditing and Accounting Supervisory Authority.

“However, IAASA has absolutely no remit over those accountants who, for whatever reason, have not joined, or have opted out of a recognised accountancy body.

“Such individuals may continue to offer accountancy services to the public free from any regulatory oversight whatsoever. There is an opportunity, with the new Companies Bill coming through, to solve what is a crazy situation,” he says.

Regulated accountants are subject to independent quality reviews, a code of ethics, continuing education requirements, and a mandatory professional insurance cover to protect the consumer and ensure a quality delivery of service.

“In these stressed economic times, many members of the public are, for the first time ever, seeking out professional financial advice, and we believe it is imperative they receive adequate protection, and that those clients who are unhappy with the service being provided have a formal avenue of complaint involving the State.” The CAI is calling on the Oireachtas to close this loophole, when the Companies Bill is debated this autumn.

Among the CAI initiatives planned for 2014 is a pilot scheme for secondary schools, to examine why a reducing number of students are opting for accountancy at Leaving Certificate. “In terms of mathematics and sciences, we are very supportive of any move to increase competency at second-level. Chartered accountants are the backbone of many organisations, including foreign-direct investment companies, and our skill-set of measurement, communication and decision-making is very closely allied to the sectors which the Government is trying to improve in scientific competency,” he says.

The CAI has 6,000 students, many of whom are graduates — providing Lenihan with a constant and optimistic view of the next generation. “I am always impressed by the ability of young people, today, in articulating their own view of the world, the confidence they have in bringing forward their own ideas,” he says. “They are certainly far ahead of the average ability that would have been the norm in the 1970s and ’80s, and I believe they deserve a huge amount of credit for advancement in that regard”.

CV

Name: Brendan Lenihan

Occupation: President, Chartered Accountants Ireland

Background: Qualified as chartered accountant, 1993. Worked four years in New York in Business Consulting Practice of Arthur Andersen. Elected to Chartered Accountants' Ireland Council in 2007. Group finance director at O’Flynn Group, since 2007. Founder and initial chairman of steering group of CAI’s NAMA Forum.


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