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Accountant

Introduction

So you've decided you want to run an accountancy business. Maybe you're undergoing relevant training or perhaps you've been working in an accountancy practice for a while and feel the time is right to go it alone. Whatever the reason, this guide will take you through the issues you need to consider and give you practical pointers on getting started.

Sector trends

Demand for accountancy services is affected by the health or otherwise of the economy - during times of recession many clients become bankrupt and survivors reduce the amount they spend on accountancy services to a minimum. The recession years of the early 1990s hit the accountancy profession hard, although the late 1990s and most of the 2000s saw much higher levels of demand. However, the severity of the current economic downturn has affected demand for accountancy services. Many practices have had to discount their fees and have suffered from a fall in the number of clients. The situation isn't likely to improve much over the next year or two.

In recent years traditional accountancy practices have been affected by a number of factors that have created overcapacity in the profession and placed intense pressure on fees. These factors include:

  • a reduction in the time spent on routine compliance work because of increasing computerisation
  • the entry into the market place of new businesses offering accountancy services. Many of these are unregulated
  • the raising of the audit threshold so that fewer companies need auditing services

The profession has seen a number of mergers and acquisitions as sole practitioners find greater difficulty in operating single-handed.

Today's clients demand a high quality service from their accountants and you should make sure that you have the skills and expertise to offer an efficient and professional service. Following the accounting malpractice revealed by the collapse of Enron the government announced a package of measures to improve standards and to make regulation of the accountancy profession more effective. The Financial Reporting Council was set up to put in place, monitor and enforce audit and accounting standards and to monitor the way in which the professional accountancy bodies regulate their members.

Since the beginning of 2004 the accountancy profession has had to comply with the requirements of Money Laundering Regulations which require practices to put in place anti-money laundering systems; appoint a Money Laundering Reporting Officer; keep records of all transactions; report to the Serious Organised Crime Agency (SOCA) any suspicions that money laundering has taken place, and train staff.

New regulations introduced in 2007 oblige accountants who are not supervised by the Financial Services Authority (FSA) or a professional body like the ICAEW to register with HM Revenue & Customs (HMRC).

1.1 Keep up to date with developments

The four main professional accountancy bodies regulate the activities of their members and also provide a great deal of information and support. The bodies are:

There are several professional journals you can subscribe to, such as Accountancy and Accountancy Age. Organisations such as SWATuk offer a range of services to accountancy practices to help them to comply with regulation and to improve profitability.