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I was trying to analyze  the definition of words Profession, Professional Body and Professionalism on www.reference.com.  (These words are interchangeable used when the Accountants discuss among themselves.)

Profession:

A profession is an occupation, vocation or career where specialized knowledge of a subject, field, or science is applied. It is usually applied to occupations that involve prolonged academic training and a formal qualification. It is axiomatic that "professional activity involves systematic knowledge and proficiency." Professions are usually regulated by professional bodies that may set examinations of competence, act as a licensing authority for practitioners, and enforce adherence to an ethical code of practice.

Professional Body:

A professional body or professional organization, also known as a professional association or professional society, is an organization, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. On the one hand, professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned.

Many professional bodies perform professional certification to indicate a person possesses qualifications in the subject area, and sometimes membership in a professional body is synonymous with certification, but not always. Sometimes membership in a professional body is required for one to be legally able to practice the profession; see licensure.

Professionalism

Oxford Dictionary: the competence or skill expected of a professional.

Graham Ward in IFAC website: Professionalism,  is about individual modes of behaviour that command respect and build trust. It is about excellence in service as measured by recognised standards.It is about delivering services or working to standards that meet the needs of and are expected by our clients.

Such behaviours are indeed a necessary part of belonging to a profession but almost any trade could be described as professional in these terms!

As any of us here knows, what separates the professionalism of members of a professional body from the behaviours of other types of so-named professionals, is the requirement to continually reinforce and demonstrate our professionalism, not merely assert it through a one-off qualification. And it is our membership of a professional body – one which embodies the distinguishing features I have defined – that confers on us the obligation to abide by professional standards and regulation.

Of the above three words, I had to search a lot on the word "Professionalism" to find a true meaning to suit  accountancy profession. Members of accountancy profession will be normally be expected to take actions that contribute to the public interest.

The Principle of Professional Conduct on AICPA, US website  summarizes Professionalism in a precise manner.

Section 51: These Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants express the profession’s recognition of its responsibilities to the public, to clients, and to colleagues. They guide members in the performance of their professional responsibilities and express the basic tenets of ethical and professional conduct. The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.

Section 52: In carrying out their responsibilities as professionals, members should
exercise sensitive professional and moral judgments in all their activities.

Section 53: Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.

Section 54: To maintain and broaden public confidence, members should perform
all professional responsibilities with the highest sense of integrity.

Section 55: A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.

Section 56: A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.

Section 57: A member in public practice should observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided.

I would like to see your comments and views on this topic. Please feel free to comment on the blog post.

Regards,

Santosh Puthran

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1. Membership of Accounting Body - Value Proposition
2. Protect the term - Accountant in UK
3. ICAEW partners with Microsoft for CPD
4. ICAEW in hierarchy row
5. Selecting an accounting or audit firm
6. Corporate Governance, UK

The real test lies is “What is the benefit of being a member of a particular accounting body ?” Or to rephrase “What is the added value of being a member of premier accounting body ?”

I looked at the membership section on the website of each of the professional body and analysed what each institute offers their members in promoting the profession. Of course, it is difficult to make a judgement looking at the website but it gives a fair view what an Institute can do for its members and profession.

ACCA, UK : Offers CPD, learning opportunities and Job portal for members. Access to publication, booklet and fact sheet for the members. Online resource providing free access to UK and international Accounting and Auditing Standards. Global support to the members who are spread across 80 countries.

CIMA, UK: The members section does not have much details. The section which states, “As a student, member or one of our business partners, you will already have a unique Contact ID. You can use this to create your own My CIMA sign in and access our wide range of personalised services and resources that are all tailored to your needs.”

ICAEW, UK: The member section has a wealth of information. This ranges from Members News and Event, Branding the Profession, Online library with collection of over 40,000 books, Business Essentials, Practise Information, Resources and Support, Products and Services, Special Interest Groups and much more. The Institute also has Press and Policy comments. Also see Service Standards.

ICAI, India: Members section focussed on what services Chartered Accountant can provide rather what the institute can offer. However Resource section is very impressive with list of Accounting Standards, Guidelines and circular which is useful for the members as well as the general public.

ICWAI, India: Membership section has resources and download section with Cost Accounting Standards and few other items.

The best institute to reckon is ICAEW, UK with maturity it displays on the website in all matters concerning the profession. The depth of information contained in the website demonstrates its leadership in the profession and the other accounting bodies are bound to follow. The cross recognition with the other accounting bodies will help the mobility of members globally. The service standard section acknowledges the Institute has a strong infrastructure to respond.

Bodies outside of the CCAB, such as AIA, would not be included in the ICAEW’s plans, despite being one of the longest-established global accountancy organisations (this year celebrating its 80th birthday); and being a Recognised Qualifying Body (RQB) under the Companies Act 1989 with over 13,000 members and students worldwide! While we support moves to protect the term ‘accountant’, we are extremely concerned to see that this debate is being undertaken behind closed doors by parties with strong vested interests. The report puts forward the commercial benefits to the ICAEW, referring to a “strategy to gain further streams of ACA students”, but fails to address the public’s interest in the matter. The ICAEW seems to be approaching the issue as a trade body protecting its own interests, rather than promoting the wider public good.

Read Philip Turnbull reports in Accounting Web

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Regards,

Santosh Puthran

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1. The word “Chartered” - debate in India
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• The six members of CCAB
• Financial accountants
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The Association of International Accountants (AIA) said the proposals risked fragmenting the profession.

“The structure outlined by the ICAEW is confusing, it’s as simple as that,” said Philip Turnbull, the AIA’s chief executive. “An accountant should be recognised as an accountant.”

Responding in a recent AccountingWEB member’s blog, Turnbull outlined his belief that the Institute were putting their own commercial interest before that of the industry and the public large.

Meanwhile, the Institute has refused to comment.

“It was a private note for members of council, and we do not comment on confidential papers,” a spokesperson said.

However, a source close to the ICAEW said the published report referred to a strategy that was set in 2005, and has been subject to strategic review since.

The gift for interpreting numbers is an essential skill for any FD and particularly for aspiring CEOs. Finance directors are rightly admired for their technical skills and ability to decipher the mystery of the P&L, the erosion of the gross and net margins and the effects of tax charges and currency fluctuations on the bottom line. But the true value of all this is only unlocked if softer skills are also mastered.

The finance team is often criticised for only speaking to itself and its peers. The effort involved in explaining NPV, liquidity ratios and the need for gearing to the sales and marketing team doesn’t always seem like a good use of time. But while not everyone is fluent in the language of finance, communication is a key skill that FDs need to master.

Read more - Diana Stoltman article on Whatapc

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Regards,

Santosh Puthran

Gerald Russell, a senior partner at Ernst & Young and Chairman of the Audit Quality Forum, has been elected as the next Vice President of the Institute of Chartered Accountants in England and Wales (ICAEW). He will take office on 4 June 2008.

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Santosh Puthran

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