17 Feb 2022

A third of accountants are working a four day week

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Some four in five (79%) of accounting firms are seeing an increase in flexible working as a result of Covid-19 – with a third (33%) of accountants already working a four day week, according to new research from FreeAgent.

The report, which surveyed 525 accountants from across the UK, explores how the profession has adapted to recent challenges and how it is approaching the future – with innovative new ways of working, more focus on Environmental, Social, and Governance (ESG) and the need for improving digital skills among the most important issues highlighted by those in the accounting profession.

FreeAgent found there is a “significant disparity” in hybrid working between large and small accountancy firms, with larger firms (76-250 staff members) twice as likely to have hybrid working policies compared to just 34% of smaller practices (0-40 employees).

Accounting firms have also altered their employee benefits as a result of the pandemic as employees have demanded more from employers. The top benefit changes include:

Childcare Support – a third (32%) saw an increase in childcare support (38% women vs 29% men respectively)
Mental health/wellbeing support (e.g. gym memberships and therapy) – almost half (48%) of firms increased support in this area
A four day working week – 33% said they now work a 4 day week
Unlimited holiday – a fifth (20%) are now being offered unlimited holiday

It also found that these changes to flexible working policies appear set to remain, with half (50%) of firms saying they have chosen hybrid working as their working regime moving forward, while (42%) say they now allow full remote working for their staff.

In contrast, just 8% of accountancy firms have called their employees back to the office full time.

Encouragingly, mental health support in the profession has improved during the pandemic, with almost half (48%) of firms introducing more mental health policies for their employees.

However, the research also found that 62% of respondents said that their stress levels due to work had increased since the start of the pandemic, while 71% reported they had experienced an increase in their workload – suggesting that there are still issues that the profession needs to address in order to avoid employee burnout problems in the future.

Additionally, the FreeAgent survey found that one third (33%) of respondents thought that gaining an understanding of newer technologies is the most important factor for future-proofing the role of the accountant – while 56% said that fully understanding new app integrations and mobile technology will be essential for accountants to achieve within the next five years.

In fact, the research revealed that just 21% of accountancy firms believe that ESG will be the most important aspect of accountancy in the future – with even specific sustainability targets such as reducing a practice’s carbon footprint (46% of respondents) being seen as less important for accountants than understanding new technologies (56%).

However, views on the prioritisation of ESG in accounting were heavily dependent on the size of the practice – with larger accountancy firms appearing to see sustainability as a greater priority than smaller practices. The survey found that 58% of those employing between 76 – 250 people cited reducing their own carbon footprints as most important, vs. 33% of those employing between 0-40 people.

Roan Lavery, CEO and co-founder of FreeAgent, said: “The challenges of Covid-19 and the economic upheaval from national lockdowns have been a catalyst for accountancy professionals to take stock of the current state of the industry and re-evaluate what the role of accountants will look like in the years ahead.

“Our research shines a fascinating light on some of the most important issues that accountants will face and how they are already starting to adapt to them. Flexible or hybrid working seems likely to continue for many practices, which should give accountants more freedom and autonomy over their work than ever before.”

He added: “But it’s also interesting to see that many accountants see learning new skills and becoming more proficient with new technology as a vital part of this ‘new normal’ going forward.”

Lewis Catchpole writes in Accountancy Today

27 Jan 2022

Audit Committee Chairs ‘particularly alert’ to quality in tendering process

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Audit committee chairs are “particularly alert” to quality during the auditor tendering process, with mandatory tendering being seen as an opportunity to encourage innovation by prospective auditors, according to independent research commissioned by the Financial Reporting Council.

The research, conducted by YouGov, was based on in-depth interviews with ACCs discussing how they carry out their role.

The FRC said there were a range of different views expressed on audit quality amongst the ACCs interviewed. It found that some ACCs “continue to find it difficult” to differentiate audit quality from the quality of service provided by their audit firm.

In common with findings from last year, it added there were also “relatively few” indications of regular challenge by ACCs of audited companies’ senior management.

The research also found that auditors have adapted quickly to the challenges posed by the pandemic. There are emerging signs that the move to remote working has been accompanied by a shift in the relationship between the ACC and the lead audit partner, such that it has become more formal, and interactions have become more structured.

Mark Babington, FRC’s executive director of Regulatory Standards, said: “It is vital that audits of public interest entities are conducted to a high standard and Audit Committees and their chairs have a key role to play in ensuring this happens.

“Today’s research confirms that audit committee chairs understand the importance of high-quality audit, and that this insight was used to good effect to deal with the heightened challenge and uncertainty caused by the pandemic. Nevertheless, some ACCs commented that it can be a challenge to differentiate audit quality from the quality of service provided by the auditor

He added: “As the FRC transitions to ARGA we will take these findings into account as we develop the means of delivering high standards of audit, reporting and corporate governance

Lewis Catchpole in Accountancy Today

17 Jan 2022

UK now seen as most important market for US business leaders

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The UK has overtaken China to become US CEOs’ favoured growth market, with over a third identifying the UK as one of the most important territories for their companies, according to PwC’s 25th Annual Global CEO Survey.

The survey of almost 4,500 CEOs in 89 countries, also found the UK is a more important growth prospect to CEOs globally this year.

Some 17% of CEOs globally selected the UK as a top three growth target, up from 11% in 2021 and 9% in autumn 2019.

Likewise, the US has become a more attractive investment proposition to UK CEOs, with over half (54%) see the US as an important growth target, up from 44% in both the previous two years. Germany came next for UK CEOs, at 32%.

The study also found optimism about the global economy is particularly high among UK CEOs, with 82% anticipating it will improve during the year ahead – up from 77% last year. This contrasts with business leaders in the US, China, and Germany who are less optimistic than they were a year ago.

With regards to the UK economy, 73% of UK CEOs believe conditions will improve in the next 12 months.

Kevin Ellis, chairman and senior partner at PwC, said: “It’s not hard to see why US businesses have their sights on the UK. Aside from long standing draws such as our trusted legal and business environment, certain factors make us ripe for investment now.

“While sectors including hospitality and those with enduring supply chain issues such as automotive are undoubtedly under pressure, business leaders are confident the economy is on an upward trajectory.”

Source Accountancy Today

14 Dec 2021

UK accountants hit by skills , salary war and the “The Great Resignation”

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Nearly half (49%) of UK accountancy firms are facing “huge blows” to their growth amid an ongoing skills and salary war that is “raging” across the sector, according to new research from IRIS Software Group (IRIS)

It comes as KPMG found that many firms have been “hit hard” by labour shortages, with many forced to turn work away due to a lack of staff, while IRIS’s own research found that 32% of firms cite the current skill set of talent in their firm as a barrier to growth in the next 12 months writes Heather Sandlin in Accountancy Today

IRIS surveyed British accountancy firms to help “uncover the state of the profession as demands on their time increase as they play a vital role in helping businesses get back on their feet and boost the economy”. 

Its research found that nearly one in five firms did not want to grow any fee-paying areas over the next 12 months, however, with 23% citing a lack of time and skill to market the business within the firm as the main reason why they aren’t looking to expand. 

Jim Scott, MD for accountancy at IRIS, said: “While technology is vital to driving growth, it will never replace the insight and guidance an accountant can provide businesses. They are the forgotten heroes of the pandemic. 

“Yet the number of firms being affected by the skills shortage is eye opening and this is only being exacerbated by the “Great Resignation”. It is truly an employee’s market. The industry must do more to support firms in listening intently and working with teams to create a culture with flexibility and hybrid working at its heart to attract and retain the best talent.”

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