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SME Use of
External Accountancy
Services
Andrew McCannand Colin Gray
SME Use of External Accountancy Services
Andrew McCannand Colin Gray
April 2010
The Open University Business School enterprise research team responsible for conducting this survey and
producing the report is very pleased to thank the owners and managers of the responding firms for their time
and effort in completing the survey questionnaire. This report represents their views and experience. Drawn
from a wide range of sources, they reflect the complexity and richness of business life in Britain today.
The Professional Oversight Board (POB), part of the Financial Reporting Council, is undertaking a review of
the monitoring regimes of the UK Professional Accountancy bodies1 in relation to the provision of accounting
services by their members. Accounting services include services such as accounts preparation, payroll, tax
and bookkeeping but excludes audit. POB asked OUBS to conduct this survey in order to provide them
with details of the factors that are important to users of external accountancy services. In light of these
findings and additional work that POB are undertaking they will consider whether the current monitoring
regimes are effective, promote confidence in the profession and meet the needs of users.
The Business School is particularly pleased to acknowledge the generous financial and organisational
support provided by POB in sponsoring the research, analysis and publication of this report. However, it is
important to note that any opinions expressed in this publication are not necessarily those of the sponsors or
of the Open University.
The Open University Business
School
Michael Young Building
Walton Hall
Milton Keynes MK7 6AA
Tel: 01908 655831
Email: [email protected]
Original design by Siân Cardy
© Open University 2010
1. Association of Chartered Certified Accountants, Association of International Accountants, Chartered Accountants Ireland, Chartered Institute of Management Accountants, Chartered Institute of Public Finance and Accountancy, Institute of Chartered Accountants in England and Wales and Institute of Chartered Accountants of Scotland.
SUMMARY
Three-quarters of small and medium-sized firms use the ●
services of an external accountant.
Over a third of the very smallest firms, though, get by ●
without any external accountancy help.
Competence is by far the most important factor when ●
selecting an accountant, with cost far less important.
Almost all small and medium-sized firms know that ●
qualified accountants are regulated, but the level of
understanding varies.
The fact that qualified accountants are subject to review ●
by their professional body gives 83% of firms extra
confidence in them.
Those with a detailed understanding of the regulation ●
of accountants are most likely to gain ‘very much’
confidence from their review by professional bodies.
Firms which use professional accountancy services feel ●
the most important rules and regulations for accountants
are that they ‘conduct work ethically and with integrity’
and ‘keep skills and knowledge up to date’.
The top two factors which firms believe that accountancy ●
professional bodies should regularly monitor are the
competence of partners and qualified staff and the firm’s
integrity and ethics.
Small and medium-sized firms gain confidence in their
accountants by knowing that they are subject to review
by their professional bodies. Competence, ethics and
integrity are the most important factors which firms
believe the professional bodies should monitor.
1SME Use of External Accountancy Services
Contents
SUMMARY 1
Use of External Accountants 3
Membership of Bodies 4
Selecting an Accountant 5
Awareness of Regulation 6
Review Gives Confidence 7
Rules and Regulations 8
External Monitoring 9
Conclusions 10
APPENDIX 11
Composition of Sample 12
SME Use of External Accountancy Services
Contents
2 OUBS Professional Oversight Board
