Social mobility and Fair Access to the accountancy profession in the UK

Purpose. This paper considers how Big Four and mid-tier accountancy firms in the United Kingdom (UK) are responding to political concerns about social mobility and Fair Access to the accountancy profession.Design/methodology/approach. Interviews were undertaken with 18 public accountancy firms, ranked in the Top 30 by fee income, operating in the UK to identify how they are recruiting staff in the light of the Fair Access to the Professions’ agenda. Bourdieusian sociology is used to inform the findings.Findings. The Big Four firms employ a discourse of hiring ‘the brightest and the best’ to satisfy perceived client demand, where symbolic capital is instantiated by reputational capital, reflecting prestige and specialisation, supported by a workforce with elite credentials. For mid-tier firms, reputational capital is interpreted as the need for individuals to service a diverse client portfolio. In general, most interviewees demonstrated relatively limited awareness of the issues surrounding the Fair Access agenda. Research implications/limitations. The interviews with accountancy firms are both exploratory and cross-sectional. Furthermore, the study was undertaken at an embryonic point (2010) in the emerging Fair Access discourse. Future work considering the accountancy profession could usefully examine if, and how, matters have progressed. Social implications. The investigation finds accountancy firms remain relatively socially exclusive, largely due to the requirement for high educational entry standards, and interviewees’ responses indicate generally only limited attempts at engagement with political agendas of promoting Fair Access to the profession.Originality/value. The paper: is the first to empirically evaluate how the accountancy profession is responding to the Fair Access agenda; documents changing patterns of recruitment in accountancy employment, including the hiring of non-graduates to undertake professional work; and augments the literature considering social class and accounting. <br/

Managing the risk of misleading financial metrics in annual reports: A first step towards providing assurance over management's discussion

© 2016 University of Florida, Fisher School of Accounting. Recent public policy initiatives seek greater transparency in financial reporting through an honest, balanced and thorough management discussion of company performance in the annual report. Management's discussion invariably includes key performance indicators, such as financial ratios, relevant to external stakeholders. We model the impact of accounting estimates, assumptions, choices and errors on the risk of misleading financial ratios. This framework is illustrated through good and bad examples of financial reporting practices and by simulation of financial data of public companies. We provide a structured approach to inform policymakers, auditors and other stakeholders of the incremental financial reporting risk that accompanies current regulatory efforts