Accountants 9 Ethics As Management Consultants
Members of the New Zealand Society of Accountants who wish to practise as management consultants “must be subject to the same rules of professional conduct as public accountants, with the prohibition on advertising and solicitation and on the conduct of the work within the framework of a limited company.” This is the view of the society’s council which has published a statement of its policy “as a guide to members” in the June issue of “The Accountants’ Journal.” In' the same issue it is reported that “the council of the society regrets to inform members that Mr R. D. Greenwood has found it necessary to resign from the society and its council.” The council records its appreciation of Mr Greenwood’s services to the society and adds: “Mr Greenwood’s resignation was the result of a difference of opinion between himself and the council regarding the conditions under which he could practise as a management consultant.”
The council says its policy is in accord with policy adopted “by leading accountancy bodies” in the United States, Britain and Australia. If management consultants who are members of the society are fulfilling a real need, their value will very quickly become well known with recourse to direct publicity or advertising, it claims.
The council also says that a clarification of “the Code of Ethics” will soon be introduced to cover classification. For example, the designation “public accountant and management consultant” would not be considered appropriate. Public accountants might describe themselves as management consultants if they* wanted to but no other designation should be used additionally, the council considers. Statutory Obligation “The New Zealand Society of Accountants Act, 1958, imposes on the society the obligation to control and regulate the practice of accountancy in New Zealand. Part of this obligation is discharged by the insistence on the observance of a high standard of ethical conduct by its members,” says the policy statement of the council.
“The obligation does not extend to the control of the practice of .management consultancy in New Zealand, nor would the council of the society seek any such control. Nevertheless, management consultants practising in the widest sense of the term do use substantially management accountancy techniques which also are used to an increasing extent by public accountants. Where management consultants are not undertaking accountancy work it is considered that they are not full ‘management consultants’ but are in fact specialists in one or more limited fields only of management consultancy. “It is fully recognised that some management consultants may be rendering services which all public accountants are not equipped to render. In fact, submissions were made to the society that the general public was unaware of the nature or extent of the activities of management consultants, and that this justified a departure from the strict prohibition on ad-, vertising and solicitation imposed by the code. “The council is unable to agree with this view. In its opinion any form of publicity material distributed other than to existing clients or on request is incompatible with professional status and conflicts directly with the code of ethics. However, the council considers that to the extent that the services being provided by such specialist members are fulfilling a real need, their value will very quickly become well known without recourse to direct publicity or advertising. “The council agrees that there can be no objection to the issue of information to clients on request. provided the manner in which this is issued is not incompatible with professional standards.
Direct Pubjiclty “Should members'of the society be placed at a disadvantage resulting, from the direct issue of publicity material by members of accountancy bodies overseas which may not enforce the same ethical standards, the council agrees that representations should be made to the accountancy bodies concerned seeking the discontinuance of such publicity by their members. “In so far as members of the society who are practising as management consultants are undertaking additional specialised services, however, the council recognises the obligation of the society to promulgate this information as widely as possible con-
sistent with professional standards. “The council considers that .this obligation may, and indeed should, be discharged in three ways: “(1) Active Encouragement of Specialisation: It has become abundantly clear that the development of new techniques and the entry of accountancy into wider fields, particularly management, has made specialisation inevitable. Only the largest firms of public accountants with specialist departments can hope to render specialist advice on all phases of accounting, taxation, management. systems installations, and similar services. The overwhelming majority of public accountants. therefore, must be encouraged to realise the limitation of the service which they can render in these fields. To a large extent this can be achieved by the preparation by management consultants themselves of articles for publication in the ‘Accountants’ Journal.’ and their acceptance of invitations frorti branches to speak to meetings of members. As an official encouragement to specialisation in all fields, the council will shortly introduce a new clause in the code of ethics which will prohibit a member to whom am assignment.has beeii referred by another public accountant from exceeding that assignment without consulting with the referring member. A rule to this effect has already been adopted by the American Institute of Certified Public Accountants. “(2) Through professional and post-graduate education: , the council is convinced that it is impossible for the basic course for entry to the profession to embrace a detailed knowledge of the most advanced techniques in all the specialised branches of accountancy. It is considered necessary, however, that the syllabus should be revised frequently to ensure that all • entrants to the profession should have some background awareness of the fields in which a specialised branch of knowledge exists. Entrants with this background will appreciate more readily the need for the assistance of the specialist in appropriate cases. At the same time the council recognises that the society has an obligation to provide postgraduate courses in various spheres for members of the profession wishing to specialise, and to provide the maximum incentive for continued progress in all branches of accountancy. “(3) General publicity: As part of its general public relations campaign, the society will draw to the attention of the commercial community the services which the accountancy profession is able to provide, whether by the accountant in public practice, specialised practice, or in industry. Classification “The council is satisfied that members of the society practising as ‘management consultants’ in the widest sphere are in fact offering accountancy services to the public, whether or not they are also offering non-accounting services. “For this .reason it considers that such members must practise with the classification of public accountant, although they may describe themselves as manage•ment consultants if they so desire. Should the designation ‘management consultant’ be employed. however, the council considers that no other designation should be used additionally—as an example, ‘public accountant and management consultant’ would not be considered appropriate. A clarification of . the code of ethics will shortly be introduced along these lines. “Members are not prohibited by the code from entering into partnership with specialists who may not be members of the society, ‘although the rules prohibit the use by the partnership of the designation ‘public accountants.’ “There is an important distinction between persons practising as management consultants and members offering to the public services which are not regarded as coming withiife the scope of a public accountancy’ practice (such as sharebrokers, land agents or solicitors). In these cases unless the member is offering accountancy services as well, the classification ‘registered accountant’ is considered appropriate,” the statement says.
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Bibliographic details
Press, Volume XCVIII, Issue 28920, 13 June 1959, Page 4
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1,266Accountants9 Ethics As Management Consultants Press, Volume XCVIII, Issue 28920, 13 June 1959, Page 4
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