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Why young entrepreneurs don't trust accountants

I should have spotted this earlier: most young people do not trust accountants as business advisers, according to research that emerged earlier this month.

Much has been written about the gradual erosion of accountants' role as the dominant preferred adviser to business. But, you could argue, they remain pre-eminent, albeit with a declining share in an increasingly fragmented market.

Now with 73% of young people telling the Bright Ideas Trust (the social enterprise fund set up by Apprentice winner Tim Campbell) that they don't trust accountants, you have to wonder whether that gradual decline will steepen. And how quickly.

It's not as if the survey suggests disillusionment with business advice is total; it's more that young people are looking elsewhere for help.

Local authority business advisers were seen as offering an ‘exceptional service’. Meanwhile local job centres was seen as ‘helpful’. If there was a crumb of comfort for accountants it was in the fact that London Business Link (now a privatised concern) was described as offering a ‘very poor’ service.

As you might expect given the times we live in (and the source of the survey) reality TV business programmes such as ‘The Apprentice,’ ‘Jamie’s Chef’ and ‘Dragon’s Den’ are having an increasing impact. Some 58% said these had inspired them to start their own businesses.

But it's worrying stuff. Small firms need to reinvent themselves – of course. Some are already doing so (Goodman Jones is an Accountancy Age Awards winner and a good example) but most have an awful long way to go. Answers on a virtual postcard please….

 

Brown's biggest tax bang yet

Like accountants, tax advisers and the Conservative party, the Accountancy Age newsdesk is spending the afternoon poring over the press releases interpreting Gordon Brown's unexpectedly feel-good Budget.

The best so far comes information compiler LexisNexis. It reveals that UK tax legislation has grown by approximately 70% since the 2001 General Election. The upshot is that the pagination of its definitive tome, the Tolley’s Yellow Tax Handbook, now tops 10,000 pages for the first time.

In 2001, the handbook of UK direct tax legislation contained 5,952 pages and ran to two volumes. By 2006, the page count had risen to 9,806 pages over a massive four volumes and, following today’s Budget, LexisNexis estimates that it will increase in size by at least a further 400 pages. This means in the last six years the chancellor has added over 4,000 pages of UK tax legislation.not so good for those tasked with coping with the sheer size of the rulebook these days.

So good news in the Budget for most taxpapers - I should add the caveat on the surface at least -

Unless, of course, you're a paid adviser. Despite the tax avoidance crackdown, don't expect tax advisers' fees to slow down any time soon. This year's Accountancy Age Top 50 league table of firms will prove that, no doubt.

Brown goes out with a bang

What a finale! There was the chancellor, doing his usual Budget round-up. Commending his Budget to the house and so on when he allowed himself one last announcement. He had already pulled the rug from under the Tories' corporation tax cut  by announcing one of his own. And then, with a final flourish, he said he would cut the basic rate of income by 2p.

It was a sublime political move, wrong-fotooting his likely opponent at the next election, David Cameron.

And it was two fingers for anyone who thought that Gordon Brown's last Budget would be an anti-climax. He didn't just use his final Budget to make himself look thoroughly electable - he used the final sentence.

It was enough to restore my faith in Budgets as spectacles of political entertainment.

The Conrad Black trial, which gets underway this morning, is another event that's shaping up to deliver the goods. The head of Hollinger's audit committee, former Illinois governor James Thompson, is expected to take the stand. Did he approve of Lord Black's willingness to use the company pot to fund his increasingly lavish lifestyle? Or was he asleep at the wheel?

It's hard to see a third way on that one.

The cross-examination is bound to bring the proper role of non-execs back into sharp focus. And it's bound to beg further questions about the wisdom of making 'celebrity' appointments to roles that should be of fundamental importance to corporate health and transparency.

Other execs face charges, including Jack Boultbee, 63, the former CFO of Hollinger Inc, the firm which controlled and managed Hollinger International. Interestingly, and as an aside to his current predicament, Boultbee is remembered by one former colleague as 'one of the best international tax experts money could buy'.

Lord Black is facing fraud and racketeering charges, including claims he diverted $84m (£44m) from the company he once ran to fund his own extravagant lifestyle. He denies the charges. KPMG resigned as auditor in late 2003 after Hollinger's board refused to make management changes the firm requested.

Wednesday is shaping up nicely with Gordon Brown's final Budget running the risk of being an enthralling one. Recent Budgets have been dull: a sea of figures with the odd wave of (often repeated) policy announcements crashing on a shore of market indifference. This week's, however, could shape the political and economic landscape for years to come.

The Treasury has promised a Budget substantial in scope, the chancellor has said it will focus on the needs of business and this morning the shadow chancellor George Osborne  made waves of his own when he made the first policy announcement of what he would like to think is David Cameron's government in waiting.

And it was a significant one. By casting aside a range of allowances, the Tories will deliver a 3p in the pound cut in corporation tax to 30%.

The green agenda is emerging as the number one political and business issue. And the political implications of the PM in waiting's last hurrah are better covered elsewhere.

It's nicely timed and all eyes will be on Brown for a response this week. Accountancy Age is going to press day late this week to report on the Budget (we'll hit doormats on Friday) with coverage, as usual, throughout the day on AccountancyAge.com.

I still blame the accountants

I've written before of the knee-jerk, blame-the-accountant mentality of many commentators. And ITV's woes have kept the beancounter-as-corporate-villain image firmly in the spotlight.

Today I read Steve Hewlett's column in The Guardian's media section talking of how ITV chief executive Michael Grade 'can only mean the beancounters' when he looks for a scapegoat for ITV being 'creatively bankrupt' (pun presumably not intended).

Last December trade magazine Broadcast used similar language. Welcoming Grade's appointment as successor to Charles Allan (horror of horros, an accountant) it wrote: 'The beancounter has given way to the entertainer - and that is excellent news for anyone who cares about the future of British broadcasting.'

It's worth noting that in January when Grade came to appoint a chief operating officer he appointed John Cresswell, who had been finance director of the broadcaster.

Apropros of nothing all this comes at a time when accountants are relatively well represented on television. The Vicar of Dibley married an accountant in the last Christmas special while in the current series of Ugly Betty on Channel 4, the lead character falls for an accountat on the magazine where she works.

Iron chancellor grins and bears it

Sometimes even the most thoroughly useless story demands a wider audience. So in case anyone missed it, it's worth reading the various accounts of Gordon Brown's trip to the dentist yesterday.

As the BBC explains, Brown  allowed a dentist to drill through to deep nerve tissue beneath his teeth without using an anaesthetic. He made the apparently painful decision because he did not want his mouth to freeze up just hours before he was due to deliver a speech.

The dentist, Mervyn Druian, told The Sun: 'Mr Brown did not flinch or grimace at any stage and appeared perfectly relaxed. He’s a stoical character.'

My favourite blog entry about this hugely important story is not one from a political blog (though there are many) it one on the Dental Resource Guide. There are no comments as yet on the wisdom, pardon the pun, of the chancellor's decision but I'll be keeping tabs.

For other comments take a look at The last bus home (Don't you feel better knowing that the country's probably going to be run by a man who's THAT HARD? I bet he gargles with Irn Bru and everything. (Mind you, if he does, no wonder why he's at the dentist, etc.); Politicalog (You know what they say… No sense, no feeling); or Madame Yao (Gordon Brown is hard as ...... not for the easily offended).

Institutes irrelevant? No change there then

Accountancy Age got a hard time at last night's ICAEW annual dinner. Which is no bad thing. Regulators weren't happy with the critical line we have taken of the Financial Reporting Council in recent weeks but that was as nothing compared to the response to our recent poll probing accountants' attitude to the relevance of their professional body.

Just to recap: we ran a website poll late last month which revleaed that 45% of UK accountants believed institutes were no longer relevant. Nevertheless institute presendent Richard Dyson took us to task in a confident speech, criticising (in some detail) our 'limited' survey. OK it wasn't comprehensive but 800 of our readers responded - a respectable number.

However, if I were to condemn the poll (which, of course, I'm not about to), I wouldn't do so on the grounds of a limited reach. I might, though, point to the fact that it revealed little that was new.

When I joined Accountancy Age in 1999 we ran a similar survey. We ran the results under the headline: FDs - institutes are 'irrelevant'.

In these pre-internet days (at least in survey terms) we had to conduct the survey by telephone. And we restricted it to finance directors as we wanted to test business attitudes. Again the numbers were respectable - more than 200 of our target group responded. And even then (some eight years ago) some 36% said their institute had become an irrelevance.

More interestingly, when the responses were broken down, the ICAEW topped the dissatisfaction league, with 40% of finance director members complaining that it was irrelevant to their everyday work. CIMA came next with 37% followed by CIPFA with 30%. ACCA was top of the institutes for member satisfaction.

So Pope still Catholic, bears still defecate in the woods and most accountants still view their qualification as a passport and little more.

ICAEW dinner vs Liverpool in Champions League

Full marks to ICAEW president Richard Dyson who delivered results to the Champions League results at last night's ICAEW annual dinner. Though institute presidents may not be the best football commentators around (mind you neither are many football commentators themselves), Dyson did a decent job.

No doubt, he would have been thinking of the same dinner two years ago which attendees were still talking about last night. Then institute president Paul Druckman informed the audience that Liverpool were three-nil down at half time in the Champions League final. The audience switched off, and talk in the bar afterwards of an unlikely Liverpool victory seemed too far fetched to be believed. We were all left wishing we'd stayed in to watch the football.

Why every sportsman turned businessman needs an all-star accountant

Great sporting prowess and business acumen rarely go hand in hand. For every David Beckham (credit where credit's due, he could teach most marketeers a thing or seven about brand-building), there's a score of former pros who have failed at organising a drink-up in a brewery.

But basketball, a sport of which I can  claim only the most tenuous grasp, seems to throw up more business brains than football.

In an interview with the Financial Times at the weekend, Shaquille O'Neal, perhaps the best known current player in the world, talked less of his on-court success and more of his burgeoning property  empire. And to what did he attribute his success? Surrounding himself with knowledgable professionals.

'You've got to have a Dwyane Wade lawyer,' 'Shaq' began, comparing his legal adviser to the player best known as Flash. 'A Tracy McGrady developer,' he continued, using fellow player T-Mac as his comparison rather than his friend Donald Trump. And a 'Kobe Bryant accountant'. Bryant may be better known in some quarters for  off-court controversy, but presumably O'Neal was referring to scoring skills and marketability which has seen him sign a four-year, $45 million advertising contract with Nike.

Are small firms unattractive places to work?

A quick scan of the UK's 100 best small companies to work for in The Sunday Times surprises me: only two accountancy firms make the list.

So full marks to SJD Accountancy (a new entry ay number 43, pop pickers, and a former Accountancy Age Small Firm of the Year) and to Wright Vigar ( a non-mover at 46). But surely there should be more.

The smaller firms I talk to make great play of their attractiveness as places to work, offering flexible packages, collegiate atmospheres and rewarding roles.

So what should we read into the paucity of firms on this list. That a smaller accountancy practice is an unattractive career choice? Probably not. That the compilers are plain wrong? Any list-maker fails to get things absolutely spot on but I wouldn't blame the messenger too much on this one.

Or that accountancy firms are backwards in coming forwards, contributing to the general lowish regard in which they held. Just maybe....

More Equitable manouevres

The profession's Joint Disciplinary Scheme will hold one of its last tribunals later this month, as the Equitable Life debacle goes under the regulatory spotlight once again.

Complaints have been laid against Kevin McNamara and Richard Combes, a current and former partner respectively at Equitable's former auditor Ernst & Young.

The tribunal is much delayed. E&Y sought to stay the investigation by bringing proceedings for judicial review in the Administrative Court. These were dismissed, and an appeal to the Court of Appeal was abandoned.

It's worth noting that JDS executive counsel Chris Dickson has decided not to lay complaints against a former Equitable director and a former Equitable manager - both of whom are chartered accountants.

Given the rebuke given to Roy Ranson, former chief executive of Equitable, on Friday (he became onlly the third member thrown out by the Institute of Actuaries in 20 years) and Equitable's failure in its own claim against E&Y,  McNamara and Coombes will be hoping the way the wind has blown in this case thus far will prevail.

CFO fights Sky's corner in Virgin spat

I've been enjoying the Sky / Virgin spat this week, quite one of the most childish business disputes of recent years. I'm loathe to give it further publicity but the role of BSkyB's CFO in the whole row has been an interesting one.

The public face of Sky throughout a dispute that has seen Sky remove its channels and programmes such as Lost and The Simpsons from the Virgin airwaves has been Jeremy Darroch. He's popped up on virtually any TV channel you care to mention. Maybe I've not been watching closely enough but it seems to me indicative of a trend, albeit what is most likely to be a local one.

Does Jeremy's pervasiveness suggest that his CEO James Murdoch considers the row beneath him? Or does it indicate a CFO burning with the ambition to take on the top job? Probably both - and, it has to be said, in a row which reflects poorly on both sides, he has come out of it OK.

Watch out for him when James (inevitably) moves onwards and upwards in the Murdoch empire.

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