Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Accountants Under Pressure


Published on

IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Paul Thompson, Director, European Federation of Accountants and Auditors for SMEs.

Published in: Business
  • Be the first to comment

  • Be the first to like this

Accountants Under Pressure

  1. 1. 31st May 2017 Accountants Under Pressure 1/10 Accountants Under Pressure Paul Thompson EFAA Director CFRR – IFAC Regional SMP Forum Vienna, Austria May 31
  2. 2. 9th February 2017 Accounting and Ethics 2/22 Who We Are SMPs as Trusted Advisors of SMPs 2/20 ★ EFAA is an organisation of 17 national accounting and auditing associations ★ Representing more than 370.000 professionals ★ Supporting professionals working as SMPs and mainly servicing SMEs ★ Twitter - @EFAAforSMEs Website –
  3. 3. 9th February 2017 Accounting and Ethics 3/22  Assists member organisations in their efforts to strengthen SMPs and SMEs in professional public affairs  Over twenty years experience and focuses primarily on engaging with the European Institutions, European SMP / SME accounting and auditing stakeholders and IFAC What We Do European Stakeholders SMPs as Trusted Advisors of SMPs 3/20
  4. 4. 31st May 2017 Accountants Under Pressure 4/10 About the Survey ★ Report: ★ Pressure defined as contrary to professional ethics and / or to tax and accounting legislation ★ 664 respondents from 23 countries with vast majority having over 10 years’ experience of being accountants, auditors, tax advisors, consultants and academics ★ Employed across practice, business, government bodies and education ★ 44% female - 56% male
  5. 5. 31st May 2017 Accountants Under Pressure 5/10 Pressure How common is it? Who exerts it? Is this an issue only for the accountancy profession? Is it entity / role specific? ★ 64% of respondents said that they had been put under pressure with majority noting they had been under pressure 5 times or more ★ Pressure was exerted as follows: Client (highest), Owner, Director, Line Manager, Colleague (lowest) ★ Role specific: auditors and tax advisors ★ Accountants – more pressure when dealing with limited liability entities ★ In 72% of cases pressure was exerted by a person who was NOT responsible for financial accounting matters
  6. 6. 31st May 2017 Accountants Under Pressure 6/10 Rewards / Threats ★ No obvious reward promised for “doing what was asked” ★ Evident obvious “threats” if action was not undertaken ★ What form did the threats take? ⭐ Loss of income (practice / practitioner) ⭐ Loss of employment of accounting professional ⭐ Termination of relationship
  7. 7. 31st May 2017 Accountants Under Pressure 7/10 What were People Asked to Do? ★ Postpone recognition of costs and expenses ★ Manipulate value of inventories ★ Categorise personal expenses as expenses of entity ★ Overstate expenses ★ Deliberately account for items in a manner that changed way they were treated for tax
  8. 8. 31st May 2017 Accountants Under Pressure 8/10 How did Respondents React? ★ 68% DID NOT succumb to pressure ★ 32% DID succumb to pressure ★ More likely to succumb if an employee of organisation ★ Consequences of resisting pressure were mixed: ⭐ Employment or engagement terminated ⭐ Bullying ⭐ Stronger relationship ⭐ Weaker relationship ⭐ None
  9. 9. 31st May 2017 Accountants Under Pressure 9/10 Role of Consultation ★ 51% consulted ★ Impact of consultation is unclear but ability to consult seems of value with 85% of respondents considering it helpful in that it provided: ⭐ support to the conclusion ⭐ third party view ⭐ much needed challenge / sounding board ★ Those that did not consult cited: ⭐ no need ⭐ confidentiality
  10. 10. 31st May 2017 Accountants Under Pressure 10/10 Stakeholders / Recommendations ★ Professional accountancy organisations ★ Regulators / legislators / standard setters ★ Business community ★ Accounting and business ethics