Question

Do you believe that there has been a significant shift or evolution over the past several decades in the concept of "professionalism" as it relates to the public accounting discipline? If so, explain how you believe that concept has changed or evolved over that time frame and identify the key factors responsible for any apparent changes.

Answer 1

After the collapse of Enron we saw that the trust on public companies was very low and this resulted in decline in foreign direct investments and inhabitant's investment in the stock exchange. To tackle this issue corporate governance started its journey with suggestions to improve the trust of people and present the people true and fair picture of the company reports. This concept brought forward and encouraged to recruit professional who is straight forward, unbiased, with no self interest threats and the one who works honestly. Today we see a lot of certificates like CPA (USA), CFA (USA), ACCA (UK), ICAEW (UK), etc in the world which promotes its certification by increased watch dog eye on these professionals and continuous mentoring of these qualifiers.

Key Factors:

1. Enron collapse
2. Improve public trust on listed companies
3. Demand for professionals in the market who will act ethically and in the interest of shareholders
4. A need to set out standards for a better business practice by bringing better board composition, use of International financial reporting framework, addressing the remuneration issues, audit quality measures, developing shareholders confidence in the business, etc.