Professionals like doctors, lawyers and accountants often receive special privileges in law. Only a doctor can treat patients or operate. Only lawyers can appear in court. Only auditors can audit financial statements and only accounting officers can issue independent review engagements.

Why would society award professionals such exclusivity and what do they expect in return? In this life nothing is free so what is the quid pro quo?

As a general concept, a person that declares that he/she has special or advanced knowledge of a subject matter is considered a professional. Wikipedia explains the etymology and historical meaning of the term professional as from “Middle English, from profes, having professed one’s vows, from Anglo-French, from Late Latin professus, to profess, confess, from pro- before + fatēri to acknowledge. Thus, as people became more and more specialized in their trade, they began to ‘profess’ their skill to others, and ‘vow’ to perform their trade to the highest known standard”.

By presenting yourself as a professional you are saying people can trust you to perform work of quality and in compliance with laws and regulations.

In terms of the South African Constitution, Parliament makes statutory laws and authorises related regulations. Parliament is the representative body for the people of South Africa, and are elected by the people. These statutory laws and regulations are in turn administered and enforced by various state departments.

Statutory laws or regulations issued by Parliament include such statutes as the Companies Act, Close Corporations Act, National Qualifications Framework Act, and the Tax Administration Act.

In terms of these laws, Parliament intends to assist citizens with starting their own businesses, generating income, and paying taxes.

For this process to work effectively Parliament has decreed that business owners should keep track of their activities and summarise them in the form of financial statements. This enables business owners to evaluate the success of their activities, and to decide to expand or contract their operations.

The decisions and activities of the millions of companies operating in the borders of South Africa together make up the South African economy, and together they are represented in all the financial statements prepared by business owners. This process is known as the financial reporting supply chain.

Parliament, therefore, understands the importance of financial statements in supporting economic development and decision making. 

As the financial reporting supply chain is so important for economic development Parliament has entrusted elements of this supply chain to professionals.

The financial reporting supply chain can be illustrated as follows and follows a circular route: 1 Business Activity > 2 Transactions > 3 Bookkeeping system > 4 Journals > 5 Trial Balance > 6 Financial Statements > 7 Taxes > 8 Analysis > 9 Improvements > 10 Business Activities.  

These professionals are designated as auditors, independent reviewers, accounting officers, independent accounting professionals, business rescue practitioners and tax practitioners.

To qualify to become a designated professional and provide designated services, Parliament has decreed that you should be a member of a professional body such as SAIBA (*in the case of auditing you are required to be registered with the IRBA).

Parliament, therefore, delegated certain functions to SAIBA. These functions are detailed in the regulations to the above statutes. According to Parliament and the Professional Standards applicable to SAIBA, SAIBA must do the following prior to awarding a designation:

  1. Keep a register of members,
  2. Set admission criteria for the different levels of membership,
  3. Evaluate applicants prior to issuing a designation to ensure they are competent for the work they are designated to perform,
  4. Require designated members to do CPD that is relevant to their designated function, and which meet quality standards of CPD, and monitor if they do CPD,
  5. Report to CIPC and SAQA about the CPD program and members compliance to CPD,
  6. Receive complaints from the public regarding member conduct and issue penalties and compliance notices,
  7. Ensure SAIBA is managed in a sustainable and responsible manner.

Common law is generally established by the Courts through case law. Common law is a fundamental aspect of the laws and regulations applicable to business owners and professionals as not all laws are issued as Acts of Parliament.

Common law dictates that professionals must act with care, skill and diligence when performing designated work for business owners. Common law will consider the standards as adopted by professional bodies as indicative of what constitutes care, skill, and diligence.

SAIBA, therefore, adopt and require members to comply with standards of professional conduct and performance. These standards may include standards issued by the International Federation of Accountants (IFAC) as standards related to:

  1. Ethical conduct
  2. Quality management
  3. Assurance engagements on non-financial information,
  4. Audit engagements
  5. Review engagements
  6. Factual findings engagements
  7. Compilation engagements

The standards guide members on how to conduct their relationship with the client, and how they should perform the professional work. The standards require members to know and understand the legal framework within which the business of their client operates to ensure quality and lawful services are provided by the professional.

Society expects professionals to act in their best interest. This means the professional should have a good understanding of the external and internal environment affecting the business of the client. This includes economic conditions, business models, internal resources, compliance responsibilities, processes, productivity, and technology. In addition, clients expect that accountants will be highly competent when performing a professional engagement such as completing a tax return.  They rely on the practitioner to prepare a tax return that complies with the tax laws and is completed in a way that ensures only the correct amount of tax is paid.

In return for awarding the designation or title “Professional” society expects professionals to be knowledgeable to advise clients and protect society from abuse.

Both statutory law and common law, therefore, require professionals to commit to Continuous Professional Development or CPD. CPD is a descriptive name for the: learning activities a professional accountant must complete ensuring that they perform their work in terms of the professional standards applicable to accountants.

CPD assists accountants to:

  1. stay up to date with changes in laws, regulations, standards, guidance, and frameworks the professional should apply when providing services to business owners, and
  2. deliver a professional service

There are a further two practical reasons that a professional should commit to CPD:

  1. Mistakes: Without the knowledge gained through CPD, the quality level of the professional service decreases and the risk to the professional increases.
  2. Missed opportunities: Without CPD the accountant will not know what additional services could be offered to their clients.

Professionals pay a price for the privilege to be called professional and to receive statutory recognition or exclusivity. The price is being held to a higher standard. One of the ways that a professional can show that they are indeed worthy of the title is to commit to CPD.