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Nothing Ventured, Nothing Gained

Strip an accountant of his or her exclusive right to perform a company audit and he or she will have little else to depend on when it comes to making a living in this highly competitive world. The reality is that seven out of ten accountants in Hong Kong are making the move to provide a wide variety of professional and managerial services instead of offering bread-and-butter auditing services. Amazingly, this transition has been achieved with a great deal of success.

This turned probably perturbs many other professionals, such as doctors and lawyers, most of whom make a reasonably comfortable living from practising their professions, all of which are legally protected and sheltered from competition. There are few who would choose to venture beyond these safe confines.

Accountants may not be particularly bold, but we are qualified and well trained to manage change. We are equipped with skills to help us adapt to provide the different services we not offer. However, many of these service offer better remuneration, prospects and possibly few responsibilities and risks than those associated with auditing.

As your LegCo representative, I have been trying to pacify frazzled nerves in the wake of what can only be termed an over-reaction to the recent financial turmoil, and which has seen government regulations quick to load more responsibilities on auditors.

The Government has imposed more stringent regulations and reporting requirements as well as complex professional codes and reporting forms, amongst others, and worst of all, the fear of being prosecuted and a criminal record for making errors of professional judgement.

It has often been said that professionals are victims of their own success. And this is no exception for accountants, who through hard work and sound training have earned the exclusive right to perform the audit.

But privileges always come hand-in-hand with responsibilities. And while the privileges afforded to the accountancy professional have stayed more or less unchanged for decades, the professional risks have grown steadily, making the job no longer as worthwhile for many.

This light at the end of the tunnel ahs resulted in a shift in recent years, a trend that has not only witnessed individual accountants choosing to leave the audit profession of their own free will, but has seen large firms make the conscious decision to specialise in selected area such as management consultancy, insolvency practice, tax, etc.

Taking the practising profession as a whole, the availability of non-audit services is growing at a much faster pace, probably accounting for the largest proportion of fees and profit contribution.

The advent of technology is likely to speed up the shift away from providing traditional auditing services even further. The audit itself will become increasingly automated and cost effective - as financial data and information become generally easier to process analytically, dependency on traditional audits will diminish. And so, it will be of no surprise that the auditor's purist role many become less and less attractive.

But nothing ventured, nothing gained. Accounts have made the move to conquer non-exclusive service areas much faster than other professions - many firms are already in dominant positions in consultancy, tax advisory and insolvency.

Looking ahead, it pays to widen our areas of expertise rather than devoting all our efforts to defending a small but privileged territory.

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