"Right now the reputation of the accountancy profession could not be worse," commented Damien Wild, Editor of Accountancy Age, a UK publication.
"Andersen`s acknowledgement of errors in its audit of energy giant Enron, to say nothing of its admission that it shredded documents, has dragged the reputation of accountants right down there with politicians, lawyers and journalists, as well as signing the firm`s own death warrant. News that Equitable Life is to sue its former auditor Ernst & Young over the guaranteed annuity debacle hasn`t helped, while the lawsuit faced by PricewaterhouseCoopers Russia, over its audit of Russian oil giant Gazprom, merely adds to the growing charge sheet."
"No wonder the most senior figures in the profession concede that today`s challenges are the most intense ever faced by the accountancy profession. Yet talking to smaller firms and their small business clients, there is a sense that not everyone is feeling the heat.
"Though they might have faced tougher questions in recent months than at any other time during their career, accountants are still the number one advisers to small businesses.
"Research report after research report demonstrates the key role that accountants play in advising small businesses, particularly in the field of technology. An ACCA survey last year showed just how far the accountancy profession has moved from what was, historically, its bread and butter service offerings," continued Wild.
"It showed that the number one area where accountants believe they are best qualified to give advice is now the selection of accounting software. Not tax, not audit, but accounting software selection. Selection of computers came second with completion of a client`s annual tax returns third. The computerisation of management accounts, selecting database software and designing database systems were also in the top 10 with developing Internet strategy not far behind."
"But it`s not all rosy. Many practices are uncertain about their role in the technological revolution. Accountancy Age`s IT Skills survey, published last autumn, revealed a slowdown in IT uptake within the profession. Behind the trend was a belief by accountants that few clients expected them to deliver services electronically. There was little sense among them that they would be left behind if they failed to continue to spend more on technology. Meanwhile only 19% of those questioned strongly agreed they would be looking to provide IT and computerisation advice in the future, down 9% on the previous year`s survey. And, at the same time, the number of practices that strongly believe IT and computerisation will provide new and lucrative revenue streams also fell 50%.
"There were reasons of course: firms were `jaded`. They had been influenced by the hype surrounding start-ups and the hype accompanying the countdown to the new millennium. So what next? Is it all doom and gloom? You could be forgiven for thinking so with 11 September and a global slowdown largely led by a worldwide plunge in IT spending," added Wild.
"But, the prognosis isn`t too bad. Admittedly there is no shortage of research that suggests the bad times will roll on. According to a recent survey of 100 UK IT directors for a major worldwide software vendor, larger companies are more likely to put IT projects on hold due to tough economic conditions.
"But one of the most authoritative measures of IT spending suggests we may have turned a corner. According to IDC`s monthly index of technology IT expenditure across Western Europe, there are signs of the green shoots of recovery.
"Annual IT spending in Western Europe will grow by 6.6% this year and by 9% next year. Sweden will lead the recovery with the UK not far behind, IDC says.
"As usual, any recovery - whether just in the technology sector or in the economy at large - will have to be led by smaller companies if it is to be sustainable," concluded Wild.
"I believe that SA is even better placed than Europe, and predicted to grow even faster," commented Paul Marketos, MD of ASYST International SA. "Although we are affected by events within the global community, our SME market accounts for a much bigger percentage share of the total market than in Western nations, and thus, our recovery is likely to be sooner rather than later."
For further information, please contact Justine de Vos, Marketing manager, ASYST International SA (Pty) Ltd: telephone (011) 622 0112, fax (011) 622 0124, e-mail jdv@asyst.co.za
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ASYST International SA is a subsidiary of UK-based ASYST International, providing experienced Consultancy, specialising in the provision and improvement of business information systems. ASYST International is an established expert in financial, business intelligence customised software systems, providing solutions to improve business efficiency, reduce operating costs and increase profits. Asyst believes in a hands-on approach, from a tailored proposal, through to the best software design and systems configuration, to providing on-going training and support. It is also the sole distributor of Access Accounts in southern Africa.