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Cecil II Project Accounting Professional Survey December 2006

Executive Summary

A market survey was carried out of Accounting and Financial Management professionals within the Highlands and Islands (H&I) with the objective of an analysis of: Continuous Professional Development (CPD) wants, needs and opportunities; preferred modes and methods of CPD programme delivery; a view of the external market for accounting and financial management qualifications within the H&I; and the key skills, attributes and professional recognition required of accounting and financial management graduates. The survey identified that there are 88 accountants/financial advisors listed within the Highland and Island region. They range in terms of size, but most are small with one or two accountants within the practise. There are some firms which operate within a number of locations, but most are within one locality. The total number of accountants cover the full length and breadth of the Highlands and Islands. The main accounting professional bodies require all members to carry out some form of CPD to meet the professional standards. This can take many guises and can be recorded and monitored in various ways. Respondents identified that they preferred face-to-face seminars rather than online tutorials, but for those who lived in remote locations, the online learning was preferable to long distance travel and its associated costs. There are many providers of CPD for professional accountants and they are wellestablished. ICAS offers most seminars to accountants in Inverness as long as numbers warrant. Other organisations offer in-house seminars particularly for larger firms, and some larger organisations are also able to offer their own accredited training. The smaller, sole trading firm is likely to make use of the online resources and is not able to make use of in-house training. Although local provision was seen as a positive factor to attendance at seminars, respondents would rather travel or use alternative learning support than receive inferior products or services. The current skills and attributes highlighted by the respondents are those associated with transferable skills such as interpersonal, communication and problem-solving. An analysis of accounting degree programmes in Scotland and the professional bodies syllabus for chartered status highlights that accounting professionals are not being taught these skills, but rather the traditional accounting subjects which will supply only the technical competence; and that this is going to be detrimental to the future development of the profession in a volatile and capricious global environment. There is scope for the development of accounting programmes which offer a blended approach to delivery and also skills providing the technical competence as well as the transferable skills. The quality and endorsement of the product is crucial, as the reputation of the competition is sound. To be able to provide local, good quality CPD would be of great benefit to many accountants within H&I, but whether this could attract learners from outside the H&I remains to be seen.

Introduction

As part of a project funded through Cecil II a survey of professional accountants and financial managers within the Highlands and Islands (H&I) was commissioned by UHI Millennium Institute (UHI) to ascertain five key areas: Continuous Professional Development (CPD) wants, needs and opportunities; preferred modes and methods of CPD programme delivery; a view of the external market for accounting and financial management qualifications within the H&I; the key skills, attributes and professional recognition required of accounting and financial management graduates; and finally the creation of a database of the willing in terms of professionals who might like to be involved in the design and development of professional accounting and finance programmes with UHI. This survey comes at a crucial time in terms of the UHIs desire to create a Management School within the Highlands which would deliver postgraduate courses and professional programmes, and the results will inform design and delivery. Also, the accounting and finance professional bodies are all now making CPD a compulsory component of professional membership. Accountants, although they welcome the commitment to continuous development, and have always been actively involved in this as part of their professional duty of care to clients, are now more actively seeking providers of training and development opportunities within accounting and finance. The accounting practitioners in the Highlands and Islands prefer face-to-face delivery of training, however outwith Inverness there is the issue of location and accessibility which is not addressed by the current provision other than through online seminars, which are not interactive. Finally, many studies of accounting employer requirements of graduates and professional membership, have highlighted that most of the degree programmes and, indeed, the professional bodies themselves, tend to stress technical competence rather than transferable skills. Conversely, employers place more emphasis on the transferable skills such as interpersonal, communication and problem-solving as just as important, if not more so, than the technical competencies. It should be noted that the universities who design the degree structures are hamstrung, to a certain extent, by the need to offer value-added courses which offer maximum exemption from the professional body membership syllabus. However, not all units need qualify for exemption and there is a degree of latitude which, for many university accountancy programmes, is currently not being exploited. Although many small accounting firms within the Highlands may appear, on the surface, little affected by the fundamental shifts in organisational behaviour taking place on a global scale, they need the skills and development opportunities to meet whatever challenges they may face. There are providers who can meet their needs at a basic level, but they do not understand the unique environment in which many of these accountants operate and they cannot offer the local, face-to-face provision which so many crave. UHI could achieve this.

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Methodology

1.1

Primary research

All accountants/financial advisors registered in the Highlands and Islands, with the YELL.COM were targeted for this survey. Although the Highlands and Islands Enterprise (HIE) website was also drawn upon it was found that many of the details were out-of-date and no longer applicable. Using YELL.COM allowed for the most contemporary list of practising accountants/financial advisors within the Highlands and Islands region. The method adopted was an iterative one. Unlike the classic approach, the scope of generalisation for the results was not defined at the outset, but at the end of the process (Thietart et al, 1999). Glaser & Strauss (1967, 61-62) do not indicate the number of observation units a sample should contain, however the sample size is determined by theoretical saturation the diminishing marginal contribution of each additional interview, whereby the researcher has no need to continue with further interviews when the marginal utility of an additional interview approaches zero (Gummesson, 2000). Unlike the approach taken by Yin (1990) it is impossible to know in advance the number within the sample required. Data collection ends when each additional unit of information fails to yield any new elements (Thietart et al, 1999). A similar method is referred to as purposive sampling. Unlike quota and probability samples where the researcher is trying to gain a sample which is representative of the total population, with purposeful sampling there are no rules. It depends on the research questions and objectives in particular what the research is trying to find out, what will be useful, what will have credibility, and what can be done within the available resources (Patton, 2002). Although often applied to case study research, the technique can also be used to select interviewees that will best enable one to answer the research questions and meet the desired objectives. This method was adopted as it was apparent that the sample size would be small, and the focus was to be specific and thematic, the timeframe available was extremely tight and the research was to be illustrative rather than representative (Saunders, Lewis & Thornhill, 2003). The reason for the small sample size was that although 88 accounting firms had been identified, the timing of the research was such that participants were unwilling to contribute as, within the accounting business, December and January are the busiest time of year. Thus many refused to speak with the researcher. However, it became clear, after a number of interviews that theoretical saturation would be reached and, therefore, an illustrative sample would be obtained, and this would allow conclusions to be drawn and recommendations made. 1.2 Rationale for chosen method

The decision to use semi-structured interviews, by telephone, was based upon a number of factors:

1.

The study being undertaken is exploratory in nature and therefore lends itself to qualitative research interviews (Cooper & Schindler, 1998). It is necessary to understand the reasons for decisions made by the research participants, and semi-structured interviews provide the opportunity to ask more probing or complex questions (Easterby-Smith et al, 2002;

Jankowicz, 2000), so respondents may elaborate on their responses, and this can add significance to the data obtained and can allow for a discussion of areas that the researcher had not previously identified. This research method also allows the order and logic of questioning to be varied according to the participant and their responses.

2.

The study has a very limited timeframe and postal questionnaires rely upon minimum time periods to allow participants to respond, and this was prohibitive within the time available. Furthermore, postal questionnaires would not provide the opportunity for respondents to build upon their answers, in the way in which semi-structured interviews can do, and with the small sample size this would have severely reduced the data gathered. Focusing on the need to gather as much evidence within the small sample size, semi-structured interviews are more likely to be undertaken by respondents than a questionnaire (North et al, 1983). Research participants may choose not to complete a questionnaire for a number of reasons:
They do not want to provide sensitive or confidential information to an unknown or verified source They are reluctant to expand on written answers because time-consuming Easier to ignore than an actual personal contact Simply too busy and do not see relevance

3.

4.

The decision to carry out the interviews by telephone was based upon the priorities of access, speed and lower cost. Within the timescale concerned it was impractical to visit a valuable sample number for the study to be of any worth especially when the distance required to travel within the Highlands and Islands is enormous and costly. By conducting telephone interviews the researcher was able to gather far more data than would have been possible with face-to-face interviews from a much wider geographical area. Disadvantages of chosen method

1.3

It is important to identify the possible disadvantages associated with telephone semistructured interviews, so that they can be mitigated against. 1. Replication of findings Qualitative research does not allow for generalisations in the same way as quantitative research methods do. However, non-standardised research methods are not necessarily intended to be replicable since they reflect reality at the time, in a situation which may be subject to change (Marshall & Rossman, 1999), and this allows for rich, in-depth data to be gathered at any given moment. 2. Interviewer/interviewee bias This can be overcome by ensuring a number of factors are considered: Interviewer preparedness & readiness Level of information supplied to the interviewee Nature of opening comments at the interview Interviewers approach to questioning Ability to demonstrate attentive listening skills Approach to recording information (Saunders, Lewis & Thornhill, 2003)

3.

Telephone interviews

With this method of research, reliability may be reduced as participants may be less willing to engage in exploratory discussion, as there is less of an establishment of trust than with face-to-face interaction. The researcher is not able to witness the non-verbal communication exhibited by the respondent and so understanding of the responses may be reduced. The participant is less willing to provide as much time for the interview and therefore less meaningful data is gathered. Gatekeepers within organisations do not allow the researcher access to the required respondent.

In order to counteract some of these disadvantages, the researcher wrote to all of the accountants within the sample to explain that they would be receiving a telephone call from a researcher within the next week to ask them questions concerning accounting CPD. The letter explained who the researcher was, the purpose of the research and the organisation the research was for. It also outlined the areas in which questions would be asked. The letter was sent in order to prime participants, and make them aware of the research prior to the telephone call. This meant that the researcher was not coldcalling and also reduced the amount of time on the phone explaining the background and intent of the research being carried out. It also established an initial rapport with the respondent and meant that a better level of trust had been established. The letter also made clear the amount of time the interview would take, and this helps respondents to understand the level of commitment they will be required to undertake. This also helped to establish a trust relationship. The researcher was very strict on adhering to the timeframe specified unless a respondent made it absolutely clear that they wished to continue talking and elaborate further on answers. Often participants were keen to talk for longer but they did so on their terms rather than those of the researcher. Based on all the contingent factors it was believed that semi-structured telephone interviews would provide the most data-rich source for the completion of the study. The questions asked were based on extracting the most relevant and pertinent information from each respondent within the timeframe. 1.4 Secondary research

In order to construct the semi-structured interview questions and also be able to comprehend some of the terminology used by respondents, as well as providing vital information for the study, it was necessary to research the accounting professional body websites as well as training providers of accounting CPD. It should also be noted that the iterative nature of the research allowed the researcher to broaden their search of secondary data once the interviews were underway, when they were referred to specific information provided by research participants. Thus the research process was continuous and adaptive.

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Findings

Eighty eight accountants/financial advisors are registered in total. There are some firms which operate within a number of locations, but most are within one locality. The total number cover the full length and breadth of the Highlands and Islands (see table 1): Table 1: Number of accounting/financial firms and HIE location LEC Area
CASE INNSE GALL INVERNESS & EH LOCHABER ORKNEY SHETLAND SKYE & WR

No. of firms
12 8 44 5 6 4 6

Of the total within Inverness and East Highland, 28 are located in central Inverness. In total, 40 accountants/financial advisor firms were contacted, of which 18 agreed to take part in the research. Those who declined to participate did so because they did not have the time, although many emphasised that they would be willing to take part after the end of January 2007 when their work commitments had reduced. Although the sample was small, the researcher is confident that the findings had reached theoretical saturation and that further interviews would not have contributed in any great capacity to greater original information. 2.1 Professional View of CPD wants, needs and opportunities

There are a range of Professional Bodies for Accountants within the Highlands and Islands, and not all were represented in the sample. These are as follows: The Institute of Chartered Accountants of Scotland (ICAS) The Institute of Chartered Accountants of England and Wales (ICAEW) The Association of Chartered Certified Accountants (ACCA) The Chartered Institute of Management Accountants (CIMA) The Chartered Institute of Public Finance and Accountancy (CIPFA) The Association of Corporate Treasurers (ACT) The Actuarial Profession (AP) Table 2: Professional Body membership
Professional Body % of respondents as members

ICAS ICAEW ACCA CIMA CIPFA ACT AP

56 11 22 0 11 0 0

By far the largest membership is within ICAS, and members appeared to be pleased with the service they received from this body. In the last few years each professional body has instigated some form of compulsory Continuous Professional Development (CPD) for its members. They vary in terms of the amount of time members are required to complete their CPD, however all have stipulated that the CPD undertaken should be identified by the learner themselves from a wide variety of learning/training resources. See table 3 for list of professional body CPD requirements. All professional bodies provide some guidance on what constitutes CPD, and provide lists of possible ways to obtain CPD. Provided below are a conglomeration of the lists the bodies provide: 2.1.1 Potential CPD activities:

Work-based learning and on-the-job experience Coaching and mentoring Job secondments Undertaking new projects or assignments Research On-line training In-house briefings, seminars, courses External training courses and conferences Reading technical reports, journals and general business reading Studying for academic or professional qualifications Discussion and networking groups Interviewing and modelling experts Giving new presentations Case studies Observation and feedback This list is by no means exhaustive, and the professional bodies are at pains to point out that it is the individuals definition of learning and development which is crucial to the process of CPD.

Table 3: Professional Accountancy/Financial Services CPD requirements


Professional Body ICAS CPD requirements Completion of Professional Development Process: 4 steps 1. define current & future; 2. decide on training & development needs; 3. developing/undertaking a personal development or CPD programme; 4. record and reflect on CPD activity Reflect; consider; identify; act; impact Number of hours required None specified Recording of CPD CPD plan/record of own format or one selected by employer keep evidence Institutes record form or in MS Word/Excel Maintain CPD evidence record/CPD summary evidence form/online evidence record CPD record form or other professional body form, or form deemed suitable by CIMA L&D plan & record; portfolio of evidence Monitoring Random selection by ICAS submission to HO. Some random sampling in the workplace November each year asked if complied with requirements and tick box on the members profile. Or chosen for monitoring upload to www.icaew.co.uk/cpd CPD online or in paper form on annual basis retain evidence for 3 years; audits: asked to provide evidence, or attend an interview Sample of members selected to submit CPD records on annual basis. No formal annual declaration Annually complete statement of declaration; employer visits; recognition in the Directory of members on website

ICAEW

None specified

ACCA

The Professional Development Matrix: achievements; present role; development needs; learning style; personal development plan; evaluating benefits Professional Development Cycle: Define expectations on present & desired roles; Assess development needs & outcomes; Design a programme & Act; Reflect; Evaluate Level 1: Learning and Development Record (level 1) ; Portfolio of Evidence Level 2: Learning and Development Plan (level 2); Learning and Development Record (level 2); Portfolio of Evidence Skills/knowledge audit (diagnostic tests); learning objectives; development plan; learning; reflection; record/evidence of achievement Four categories depending on possession of statutory practising certificates: technical; professionalism & other development

21 hours (units) verifiable; 19 hours (units) non-verifiable

CIMA

None specified 120 hours over a 3 year period, with minimum 20 hours in any one year must be verifiable

CIPFA

ACT AP

None specified Category 1:15 hours verifiable; category 2: 15 hours either verifiable or personally-assessed activities 10 hours must be relevant to practise area; categories 3 & 4 no set hours

Diagnostic tools/development plan/record Category 1: complete records when applying for practising certificate; categories 2, 3 & 4 CPD form on website

No requirement to submit evidence to ACT All CPD forms must be submitted annually and will be reviewed. A sample will be subjected to more detailed review.

2.2

Professional view of preferred modes and methods of CPD programme delivery

The professional accountants interviewed referred to a wide range of training wants, needs and opportunities. Location was a factor, with those in more rural communities, requiring more detailed and timuous learning in farming legislation and accounts, and small business accounting; whilst those in more urban areas providing a more generic accounting function for larger and small businesses. Accessing this training and learning is also wide ranging, and again is often dependent on location and size of practise as to which delivery method is preferred. 2.2.1 Non-verifiable CPD

For non-verifiable or personally-assessed CPD all respondents regularly visited specific websites such as AccountingWEB (www.accountingweb.co.uk) or Inland Revenue bulletin pages (www.hmrc.gov.uk/bulletins). Respondents also accessed the website of their particular professional body, and specific information lines affiliated to these eg. Taxline (www.icaew.co.uk) for updates. Respondents also read various hard copy publications. 2.2.2 Verifiable CPD

Although many of the professional bodies have moved away from prescriptive CPD hours, which allows practitioners, in theory, to undertake CPD at a more independent and non-verifiable level, in reality, many professional accountants choose seminars as a method for achieving their CPD. However, the form in which these seminars might take can vary considerably in terms of delivery, venue and training provider. Table 4: Preferred learning method for CPD
Preferred learning method Classroom/seminar Conference Online Portfolio/work-based Blended Percentage 66 11 0 0 22

Most respondents preferred attending seminars, with comments including: [Seminars] they make you go if it was online I wouldnt do it I prefer face-to-face.. Some commented that conferences were useful for networking, but that seminars were less so as I arrive two minutes before it starts and shoot off as soon as it is finished. It is most notable that those respondents within easy distance of Inverness preferred to attend seminars, whilst those further a field preferred to attend seminars occasionally but made use of the online learning materials, as there was a time and cost implication that Inverness accountants did not have. When asked if seminars could be provided locally, would they attend, these respondents indicated they would still use the online resources and it would depend on the definition of local.

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2.3 2.3.1

Providers of CPD Face-to-face Seminars

There are a plethora of training and development seminars available to professional accountants. All the professional bodies provide a detailed brochure of their timetabled events throughout each year. In these brochures they introduce the speakers, explain the topic areas and often provide repeats of each seminar in a multitude of locations and at various times throughout a calendar year. Within the Highlands and Islands ICAS offers many seminars in Inverness and Aberdeen. Other providers tend to require accounting professionals to travel further a field Glasgow and Edinburgh are the usual most northerly locations. ICAS is the only provider who offers generic seminars in Inverness, although others can offer in-house training. The ICAS programme of seminars in Inverness for 2007 is as follows:
Common Reporting Problems An Update on Small Company Reporting A Finance Directors Update Charities Update - What's New Tax Update for the Busy Practitioner Current Tax An Audit Update for Partners & Senior Staff Tax Planning Strategies for Family Companies VAT Update CGT + IHT Planning Acting for Doctors - An Update UK GAAP Update 2007 A Tax Update for Non-Tax Specialists Tax Tips for 2007 Corporation Tax Developments The Preparation and Audit of Charity Accounts

ICAS offer many other seminar topics but the venues for these are most commonly in Glasgow and Edinburgh. Each seminar is usually three hours in duration and is located within a hotel. The professional bodies offer passports whereby an accountant can choose to attend 10 seminars for around 400 from a huge list available. They are sent a list of seminars available in their course directory and they then choose which ones they would like to go to. According to ICAS, the determining factor for seminars in Inverness are the number of accountants who sign up for this location. If only a few subscribe to a particular session then it is likely the location will be further south to become more financially viable. This means that accountants within the Highlands and Islands could find that they are having to travel to the central belt for a 3 hour seminar, which is effectively at least a day of work time lost as well as travel and possibly overnight accommodation costs. The main training providers (Mercia, Tenon, CCH, Tolley), outwith the professional bodies, also offer the subscription package system of a certain number of seminars for a fixed price. Tolley offer 10 seminars for 425 plus VAT. Mercia offer a flexible season ticket of 10 courses for 400 plus VAT. Smaller practitioners can get 6 courses for 320 plus VAT. Mercia are also delivering some seminars in-house for the larger accounting organisations within the Highland region. Mercia offer an enormous number of training and development programmes for everything to do with

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accounting and accounting practice management and are spoken of very highly by respondents who have used them. Some firms researched are accredited providers of CPD. This means they have mean approved by a professional body to provide in-house verifiable CPD for their employees. Johnston Carmichael have four accounting firms located within the Highland region, and have a dedicated Human Resource department who provide accredited CPD for their staff. They also hire in Mercia trainers who will run sessions in Elgin and Inverness. This is of benefit as it means members of these firms do not have to travel long distances to seminar venues, and the CPD can be tailored to the specific requirements of the firm and be delivered at a time to suit all. However, it only works within large firms where there are in-house training providers. Many accounting firms within the Highlands are sole practitioners or have two or three practising accountants and the cost of in-house training would be prohibitive. The research indicates that the larger the accounting firm, the more opportunities to access CPD in-house or at a local level and retain face-to-face interaction. The smaller firm is looking to seek the most cost-efficient method of obtaining CPD with minimum travel and time away from work, at a time that is most suitable. 2.3.2 Online material

Although many of the accountants interviewed preferred physically being at a seminar, for those away from Inverness, where there are a wide variety of seminars offered by ICAS, the use of CD-Roms provided a positive alternative. As an alternative to attending a seminar in person, many training providers now offer a CD-Rom service. Tolley and Mercia have developed this learning resource and for 50 plus VAT per sole accounting practitioner per CD/online seminar can access, on computer, a seminar with the presenter on left and slides on the right of the screen, plus supporting notes. The obvious advantages of this method of training are:

There is no need to worry if you can't make the date of a course Travelling time and costs are eliminated You can view the course when and where it suits you best You can use the CD or online course as a reference tool or refresher You can allow more of your team access to the training

(www.mercia-group.co.uk/training/cd_online.htm- accessed 18.12.06)

Also, each CD seminar counts as three structured hours of CPD for the professional body requirements. Two respondents had, in previous years, signed up for 10 seminars with Tolley Lexis Nexis in Glasgow but could only ever get to 6 or 7 due to work commitments. They were both choosing the CD-Roms for the next calendar year of CPD, still with Tolley, but would be able to have the seminar on their computer. Both respondents felt that there were disadvantages to the new method mainly the self-discipline of setting aside time to watch the CD; and the isolated nature of the learning experience; however they felt the benefits outweighed the costs as they both lived in remote locations and were sole practitioners with large workloads.

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It appears that accounting professionals remain loyal to certain training providers and if they have been happy with the seminars offered by a provider they tend to choose the same for their online learning. However, in one particular case, one respondent had used CCH, in partnership with ICAEW, as their lead CPD provider, but had found that many online tutors/seminar providers had moved to Tolley and that the standard of training had fallen. This respondents organisation now used a combination of Mercia and Lexis Nexis to provide their CPD requirements. This suggests that if the quality of the provision is reduced then accounting firms will seek alternatives and will make use of more than one provider to meet their needs. Table 5: Perception of CPD provision offered by training providers
Excellent 78% 100% 100% 28% Good 16% 0 0 28% Fair 0 0 0 0 Poor 6% 0 0 44%

Quality of CPD offered Delivery method Relevance/usefulness Accessibility

It should be noted that all respondents indicated that the CPD provided by their preferred supplier was graded as either Excellent or Good. Accessibility in terms of face-to-face seminars was the only grade which was regarded as poor, and again this was in more remote locations away from the Inverness area. 2.3.3 Conferences

The professional bodies usually develop an annual conference around specific learning themes. Depending on the theme and the level within an accounting firm a respondent is, would determine the relevance and whether they would choose to go. Respondents were far more willing to travel longer distances for a two day conference than they were for a 3 hour seminar. 2.4 Professional view of external market for accounting and financial management qualifications in the Highlands and Islands

Respondents would like to see more local provision but were unsure if that provision would attract accountants outwith the Highlands and Islands region. They felt that the existing provision was excellent and that to attract individuals from outside their geographical area would mean competing with some very well-established organisations with seasoned portfolios. When respondents were told that UHI was planning to develop a Highland Management School this was greeted most favourably, but again it was assumed that this would be to provide local provision to local learners rather than those further afield. The quality of the product is crucial as the competition is fierce. Although the issue of local availability is important to many respondents, they felt that they would rather travel or use alternative learning resources such as online seminars, rather than use inferior products or services.

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2.5 2.5.1

Professional view of key skills, attributes and professional recognition required of accounting and financial management graduates Survey findings

The respondents indicated that the following were key skills and attributes required by contemporary professional accountants:

Good interpersonal skills to establish and maintain relationships with clients Thorough knowledge of current taxation, legislative and budgetary requirements Excellent communication skills oral and written especially to non-accountants Ability to manage time and prioritise effectively heavy workload Ability to analyse information/data quickly to reduce time Ability to work effectively as part of a team (in the larger accounting firms) Good understand of accounting a pre-requisite of the job

Many of the respondents work for very small accountancy practises and they have particular requirements that the larger firms do not. This concurs with the research carried out by ICAEW, which identified the particular skills necessary for a small accounting business (see table 6): Table 6: Strategies and skills necessary for accountants to succeed in different employment sectors (ICAEW, 1996 in Howieson, 2003)
Small firms The technical, financial, marketing and business skills to add significant value to their clients' affairs The broader business and personal skills to be an effective adviser and establish long-term relationships Long-term continuity of staffing The ability and integrity to sell on the basis of a strong reputation Good local knowledge and close involvement in the local business structure Strong working relationships with other service providers in order to offer a full range of services The marketing tools (including database software) to target clients with appropriate services A commercial approach to the types of fees and service levels expected by clients Practice management skills

2.5.2

Literature findings

It seems, from the findings of this survey, and from employer studies of identified professional accounting requirements that the skills held in high regard by the accounting profession are not those necessarily taught to accounting graduates and professionals. Increasingly there is an emphasis, in the literature in this field, on not

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merely providing accountants with the knowledge and expertise in accountancy but a recognition that accounting professionals need to be able to demonstrate effective communication, interpersonal and problem-solving skills, and need to be provided with the learning and development which will allow them to do so (see table 7). Siegel and Sorensons survey of management accounting (1999) asked management accountants to identify the most important knowledge, skills and abilities necessary for success. These were: Communication (oral written and presentation) skills
Ability to work on a team Analytical skills Solid understanding of accounting Understanding of how a business functions

Hassall et als comparative research (2005) of employers of management accountants in the UK and Spain, identified that the most valued skills by UK employers were communication skills, a perspective which reiterated Morgans earlier research (Morgan,1997). Oral and written communication skills were the two first items by importance and the ability to listen effectively occupied fifth position. The other group of items highly valued by the UK employers was pressure and time management skills. The ability to select and assign priorities within coincident workloads is the third item in the importance ranking, the ability to organise the workloads to recognise and meet tight, strict, and coinciding deadlines is the fourth and organise the workloads to meet conflicting demands and unexpected requirements the seventh (Hassall et al, 2005, 385). According to Hassall et al (2005) the employers surveyed felt that the development of these work place requirements should be an explicit goal and should be the responsibility of educational institutions and their research identified that employers do not believe that educational institutions pay sufficient attention to the development of these non-technical skills and knowledge areas. Other research has identified that accountants should also be encouraged to take decisions based on their feelings and in order to do this they need to have a more developed level of emotional intelligence (McPhail, 2004). Also the recognition of knowledge management as an essential part of an accountants education. The IMA (1999, pp. 45, 7) views knowledge management as a transformation of management accountants from scorekeepers to business partners with the result that these accountants spend the bulk of their time as internal consultants or business analysts performing tasks such as strategic planning, internal consulting, process improvement, and performance evaluation. Accountants have a competitive advantage in knowledge management relative to many other professionals because they tend to understand the interrelationships between different segments of a business (ICAA, 2001, p. 8 in Howieson, 2003, 84).

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Table 7: Research into importance of transferable skills by accounting employers (Hassall et al, 2005, 384)
Skill Reference Group Result 82% consider these skills as very important and 78% indicate that integrated development within accounting classes is an advantage At least quite important for 90%. At least quite important for 90%. 90% support greater emphasis into the acc. curriculum for these skills. Considered to be the highest priority for skills development

Communication

Gingras (1987)

Professional Acc.

Novin and Pearson (1989) Novin, Pearson and Senge (1990) May, Windal and Silvestre (1995)

CPAs CMAs Academics Spanish academics and professional accountants

Arquero Montao (2000)

Interpersonal skills

Bhamornsiri and Guinn (1991) Gersich (1993)

Auditors Auditors

Increasing importance as the career progresses. Are considered the most important in their job.

Problem solving skills

Novin and Pearson (1989) Novin et al. (1990) May et al. (1995)

CPAs CMAs Academics

At least quite important for 95%. At least quite important for 97%. 96% consider that students must solve unstructured problems requiring multiple info sources

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2.5.3

Current Accounting and Finance degree programmes

Most respondents felt that an accountancy degree was more useful than a generic qualification and then taking the professional route. This was because most Higher Education institutions in Scotland provide up to the maximum exemptions for most of the professional body awards, and this would save time in the long run. They also felt that accounting graduates would have a better overall grounding in the subject matter. They also felt it was far easier to study as a student on a full-time basis rather than once working and balancing work and study as part of the professional award. The view of the professional bodies is that graduates are not required to have obtained a degree in Accounting or Financial Management, although they do stress that some employers will only accept graduates onto their professional development programme with a degree in a related discipline. Research indicates that many accounting and financial management courses have not addressed some of the concerns of the employers who will recruit their graduates. The current state of accounting education according to Howieson (2003) is:

1. Course content and curriculamany stakeholders view accounting curricula


as too narrow and often outdated or irrelevant. [Curricula] are driven by the interests of faculty and not by the demands of the market (Albrecht and Sack, 2000, p. 43). Pedagogythe teaching of accounting is dominated by a rule based approach which promotes memorisation rather than creativity. Skill developmentthe focus of teaching is upon content rather than the development of generic skills. Technologythe emphasis remains on technology as a bookkeeping system rather than on how technology can be leveraged to make business decisions Faculty development and reward systemsaccounting teachers are largely divorced from teachers of other business disciplines and business practitioners. Strategic directionmost accounting schools have failed to strategically plan for the changes to their environment and as such have lost ground to other disciplines and other education providers.

2. 3. 4. 5. 6.

Universities in Scotland which offer ICAS accredited degrees, and also qualify for alternative professional body exemptions are listed in Table 8:

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Table 8: Scottish University Accountancy degree providers & provision of explicit transferable skills in the curricula University
University of Aberdeen University of Abertay The University of Dundee The University of Edinburgh

Qualification
MA Accountancy single & joint honours BA(Hons) & BA (2 year top-up) BAcc (Hons) & BAcc MA Business Studies & Accounting; MA Economics & Accounting; MA Law & Accountancy BA Accountancy; BA Accountancy with Finance; BA Accountancy with Law; BA Accountancy with minor discipline BAcc (Hons) (Conventional); BAcc (Hons) (Accountancy with Language); BAcc (Hons) (Accountancy with Finance); BAcc (Hons) (Accountancy with International Accounting); BAcc (ordinary); BAcc (Joint Honours with Economics); BAL (Accounting & Law) MA Accountancy & Finance; BA Accountancy & Finance BA Accounting; BA Accounting & Finance BA Accounting BA(Hons) Accounting & Finance

Soft skills
L1 Managing People & Organisations No dedicated units but commitment to transferable skills throughout Not specified Not specified

Glasgow Caledonian University

Not specified

University of Glasgow

No dedicated units but interpersonal & transferable skills methods adopted

Heriot-Watt University Napier University University of Paisley The Robert Gordon University

Not specified Not specified Not specified Problem solving & decision-making skills built-in; only university in Scotland to offer 12 month accounting placement No core or optional units Integrative studies at all levels particularly at Honours: Communication Numeracy - IT Problem solving Inter-personal skills); Integrative Studies 2 (Decision Making, Negotiation, Entrepreneurship); Integrative Studies 3 (Strategy, Ethics, Business Environment, Research Methodology)

University of Stirling University of Strathclyde

BAcc BA with Principal Subject Accounting; BSc Mathematics, Statistics & Accounting; BSc Technology & Business Studies with Accounting

All are able to offer maximum exemption of the Test of Competence (ICAS) as long as students select the appropriate units on their degree. However, the inclusion of transferable skill development is sometimes made clear and seen as integral, however in many cases there is little or no reference to these learning areas. Strathclyde, in particular, has a commendable approach to transferable skills development but it is very much a pioneer in this field. The professional bodies, too, although they have commissioned research to identify employer requirements, are still requiring the standard knowledge and understanding and not addressing some of the requisites the research has identified (see Table 9).

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Table 9: Four main Professional Body syllabus ICAS


Test of Competence (ICAS accredited degrees can gain exemption from all or part of this stage) Business Law; Business Management; Finance; Financial Accounting; Principles of Auditing & Reporting Test of Professional Skills Advanced Finance; Assurance & Business Systems; Financial Reporting; Taxation A Business Ethics course is delivered during the first two years of training Part 2 2.1 Information Systems 2.2 Corporate and Business Law 2.3 Business Taxation 2.4 Financial Management and Control 2.5 Financial Reporting 2.6 Audit and Internal Review Part 3 Option papers: 3.1 Audit and Assurance Services 3.2 Advanced Taxation 3.3 Performance Management 3.4 Business Information Management Core papers: 3.5 Strategic Business Planning and Development 3.6 Advanced Corporate Reporting 3.7 Strategic Financial Management Diploma Audit & Assurance; Leadership & Management; Financial & Performance Reporting; Accounting for Decision Making; Governance & Public Policy; Public Finance; Taxation

ACCA
Part 1 1.1 Preparing Financial Statements 1.2 Financial Information for Management 1.3 Managing People

CIPFA
Certificate Financial Accounting; Management Accounting; Financial Reporting; Financial Management Systems & Techniques

CIMA
Managerial Level Management Accounting Performance Evaluation; Management Accounting Decision Making; Financial Accounting & Tax Principles; Organisational Management & Information Systems; Integrated Management; Financial Analysis

Strategic Level Management Accounting Risk & Control Strategy; Management Accounting Business Strategy; Management Accounting Financial Strategy

Test of Professional Expertise Multi-discipline case study

Final Test of Professional Competence Strategic Business Management (SBM) Strategic analysis and decision making Strategic option appraisal Strategic change management Strategic planning Finance and Management Case Study

Test of Professional Competence In Management Accounting

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As can be seen from the four professional bodies represented by the respondents, there is little attempt to bring transferable skills into their professional routes. This, coupled with the degree programmes currently on offer within Scotland, suggests that employers and their clients are not getting the best skills required to provide a contemporary professional accountant service. It should be noted that the universities who design the degree structures are hamstrung, to a certain extent, by the need to offer value-added courses which offer maximum exemption from the professional body membership syllabus. However, not all units need qualify for exemption and there is a degree of latitude which, for many university accountancy programmes, is currently not being exploited. Finally, when researching current CPD provision by the main suppliers within H&I, it is apparent that most are involved in enhancing technical rather than transferable competence. Mercia do offer a wide range of programmes as do ICAS, and some of these go beyond accounting updates, however it is obvious that accountants, too, are guilty of assessing their CPD needs in terms of tangible knowledge rather than intangible skills. There are currently no seminars planned in Inverness, by ICAS, that address these issues although they do run plenty of seminars on Management Development (MD) in Glasgow and Edinburgh. It is obvious that these courses are not popular within H&I as ICAS base their seminar venues on attracting viable numbers. The seminars include:
Managing Change Assertiveness Developing and Managing Teams Achieving Peak Personal Performance Effective Presentation and Delivery Managing Individuals Writing Skills Workshop Successful Report Writing Mastering Time Management Delegation and Empowerment

Respondents in the survey recognise it as a need but can only access it online at present, but it also takes second place to the more technical-based training that informs their daily business performance. Often transferable skills are seen as an added extra or luxury rather than essential and the location of the ICAS MD events would bear this out. However, if there was local delivery more accounting professionals would be encouraged to attend. 3.0 Conclusion

The Professional Accounting Survey for the Highlands and Islands has highlighted certain key themes which need to be further explored and developed. Accounting and Finance professionals within the region have specific concerns which are not necessarily replicated in the rest of this employment sector, with relation to CPD. Most accounting professionals, given the choice, would opt for face-to-face seminars to meet the necessary CPD requirements; and the current CPD providers do offer this facility in Inverness only (ICAS in particular). Larger firms have the resources to access CPD training in Inverness, and for many who are located in the city itself, this is of little hardship, and further afield if necessary. However small firms of sole traders in remote locations within the H&I region find travel and the associated costs prohibitive, and thus turn to online resources to provide their CPD needs. If they

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could access quality, financially competitive, and locally delivered face-to-face CPD, most accounting professionals would do so. However the product must be of an extremely high quality as the current training providers are extremely good at what they do and respondents indicated they would rather use good online resources than attend a poor face-to-face seminar even if this was easily accessible. The Highlands and Islands do not offer an Accountancy and/or Finance degree at present other than those which can be accessed through the Open University. Therefore individuals wishing to study Accounting to degree level have to do so outside the region. In order for accounting professionals to turn to UHI for the provision of their CPD it is imperative that there is the facility for providing graduate accountants and a mechanism for achieving chartered status. Only then will professionals be assured that UHI has the competence and expertise to deliver a quality product. Accounting professionals recognise that there are certain transferable skills required within the modern profession, but the research indicates that these are not being taught at degree level in many Scottish universities and are not as fully promoted by the professional bodies as the technical competencies. Corporate and public accounting firms are working hard to transform themselves into finance professionals and professional services firms. It is now accounting education's turn to transform itself. Failure to do so could be fatal. Seizing the moment to make needed changes could increase our relevance and open new opportunities for accounting education (Albrecht and Sack, 2000, 66).

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4.0 1.

Recommendations Face-to-face local delivery

All of the accounting and financial professional bodies require their members to undertake some form of CPD on a yearly basis. The face-to-face seminars only take place in Inverness, and this has proved prohibitive for many professionals in more remote Highland locations. The preference is for face-to-face seminars at local venues, and therefore it would be necessary to offer CPD seminars in these remote locations. Video-Conferencing could be one way of delivering to a number of locations simultaneously, but with minimal cost. However the provision of this medium would need to be as good, if not better, than the current CD-Roms that professionals have access to. 2. Quality provision is essential

The provision already available is extremely well-received, and has been in place for a number of years. In order to compete with this market, the quality of delivery and materials must be excellent as the competition is fierce and UHI currently has no track record in this area. Also the cost must be in line with alternative training providers, as for sole traders, in particular, cost is a key factor. 3. Transferable skills

The accounting and finance professionals identify that some of the key skills necessary within contemporary accountancy are not available to them as face-toface seminars. By offering a blend of local technical and transferable skills training this would provide something that is not currently available within the H&I. In particular the areas of interpersonal skills, communication and problem-solving seem most required. This would also provide UHI with its unique selling point (USP) in that it markets these programmes as something unique to the Highlands, which cannot be obtained from another source. 4. Tailored CPD to meet Highland accountants needs

Related to point 3 is the issue that accountancy and finance firms within the H&I are operating with specific client requirements, not easily replicated elsewhere in the country. Therefore by developing and marketing programmes which appeal specifically to Highland accountants this, too, provides a USP. By directly contextualising the technical themes such as taxation, charities reporting and VAT to the day-to-day Highland accountancy firm, the professional is receiving a specific rather than generic training experience. 5. The possible market is within small rather than large accounting firms

Respondents within the survey who are working within sole-trade or two staff firms have already adopted a blended learning approach to their CPD, as they attend some seminars and also use the CD Rom resource when they cannot leave the office. It is more likely that UHI would be able to attract these individuals, as they have limited time and resources available and are looking for local delivery; rather than those in larger firms who are often already located in Inverness and therefore have access to seminars in their local area. Larger firms, too, have better resources and are able to offer their own training or send their staff to the central belt.

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6.

UHI needs a BA Accounting and/or Finance

Of the current provision of Accountancy and Finance degree programmes within Scotland, the closest to the Highlands and Islands is in Dundee or Aberdeen. Although UHI currently offers a HND in Accountancy, students have to travel out of the area to gain an Ordinary or Honours. 6.1 The degree should be with Honours to enhance reputation

In order for UHI to successfully provide CPD for professional accountants it must offer a degree (at least Ordinary in the first instance but Honours would be more preferable) in Accounting and Finance which is recognised by a professional body most notably ICAS as providing maximum exemption from stage 1 of the professional award. 6.2 Degree with emphasis on transferable skills and a placement

Within this degree should be far more emphasis on transferable skills using University of Strathclyde as a model for this; however also offering a placement year (currently only available at Robert Gordon University). This would provide another USP for UHI. 6.3 UHI needs to gain ICAS (or another professional body) accreditation

It would also be necessary for UHI to become a recognised ICAS syllabus provider in order to offer students full chartered status. 6.4 USP attraction to students outside the Highlands and Islands

This would serve many purposes: it would offer students the opportunity to study accountancy and finance from HN through to professional status in one location be that remote or central; it would provide the gravitas essential to encourage accounting professionals to move to UHI as a supplier of their CPD; and it would also encourage students from outside of the H&I to come into the area as UHI would be offering an opportunity to not only study an innovative accounting programme, but work in an increasingly popular region.

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5.0

Bibliography

Albrecht, W.S. and Sack, R.J. (2000) Accounting Education Series, Accounting Education Series 16, American Accounting Association, Sarasota, FL in Howieson, B. (2003) Accounting practice in the new millennium: is accounting education ready to meet the challenge? The British Accounting Review Volume 35, Issue 2, June, Pages 69-103 Cooper, D.R. & Schindler, D.A. (2001) Business Research Methods, 7th ed. London: McGraw-Hill Glaser, Barney. G. & Strauss, Anselm, L. (1967) The Discovery of Grounded Theory. New York: Aldine Gummesson, E. (2000) Qualitative Methods in Management Research, 2nd ed. London: Sage Hassall, T., Joyce, J., Arquero Montao, J.L. & Donoso Anes. J.A. (2005) Priorities for the development of vocational skills in management accountants: A European perspective Accounting Forum Volume 29, Issue 4 , December, Pages 379-394 Howieson, B. (2003) Accounting practice in the new millennium: is accounting education ready to meet the challenge? The British Accounting Review Volume 35, Issue 2 , June, Pages 69-103 Institute of Chartered Accountants in Australia (2001) The New CFO of the Future: Finance Functions in the Twenty-First Century, prepared by M. Simister of KPMG Consulting, Inc. for the Institute of Chartered Accountants in Australia in Howieson, B. (2003) Accounting practice in the new millennium: is accounting education ready to meet the challenge? The British Accounting Review Volume 35, Issue 2 , June, Pages 69-103 Institute of Chartered Accountants in England and Wales (1996) A Consultation Document ,London, November in Howieson, B. (2003) Accounting practice in the new millennium: is accounting education ready to meet the challenge? The British Accounting Review Volume 35, Issue 2 , June, Pages 69-103 Marshall, C. & Rossman, G.B. (1999) Designing Qualitative Research, 3rd ed. Thousand Oaks, CA: Sage McPhail, K. (2004) An emotional response to the state of accounting education: developing accounting students emotional intelligence Critical Perspectives on Accounting Volume 15, Issues 4-5 , May-July, Pages 629-648 Morgan G. J (1997) Communication skills required by accounting graduates: practitioner and academic perceptions Accounting Education, Volume 6, Number 2, June, pp. 93-107(15) North, D.J., Leigh, R. & Gough, J. (1983) Monitoring industrial change at the local level: some comments on methods and data sources in Healey, M.J. (ed) (1983) Urban and Regional Industrial Research: The Changing UK Data Base, Norwich: Geo Books, pp. 111-129

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Parker, L.D. (2001) Back to the Future: The Broadening Accounting Trajectory, The British Accounting Review Volume 33, Issue 4 , December, Pages 421-453 Patten, M.Q. (2002) Qualitative Research and Evaluation Methods, 3rd.ed. Thousand Oaks, CA: Sage Saunders, M., Lewis, P. & Thornhill, A. (2003) Research Methods for Business Students, 3rd ed. Essex: FT Prentice Hall Siegel, G. and Sorenson, S.E. (1999) Counting more, counting less. The practice analysis of management accounting, IMA Thietart, R-A et al (1999) Doing Management Research, London: Sage Yin, R.K. (1990) Case Study Research: Design & Methods, Applied Social Research Methods Series, Newbury Park, CA: Sage Websites www.mercia-group.co.uk/training/cd_online.htm www.tolleyseminars.com www.yell.com www.icas.org.uk www.accaglobal.com www.cipfa.org.uk www.cimaglobal.com www.icaew.co.uk www.treasurers.org www.actuaries.org.uk www.tenongroup.com www.abdn.ac.uk www.abertay.ac.uk www.dundee.ac.uk www.ed.ac.uk www.gla.ac.uk www.gcal.ac.uk

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www.hw.ac.uk www.napier.ac.uk www.paisley.ac.uk www.rgu.ac.uk www.stir.ac.uk www.strath.ac.uk www.hmrc.gov.uk/bulletins www.accountingweb.co.uk

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