What's In a Name?
The official name of our professional body was changed at the beginning of this year to no longer spell out the "Institute of Chartered Accountants in England and Wales", but use simply "ICAEW".
An ongoing discussion on
Linked in about the name change indicates that some members are not that impressed, eg Jonathan White says:
"
Removing the term 'Chartered Accountant' formalises the opening up of control and use of the organisation to non-qualifieds, primarily the employees. Although in reality this is a situation which already exists as Graham says.
The removal of national terms, 'England and Wales' in this case, has been done to aid the 'globalisation' process they are so obsessed with and inevitably will lead to the ICAEW assisting people abroad to take the work of members here in the UK."
What do other members think?
Labels: diluting the brand, icaew
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Advice To The Members of The ICAEW and ACCA
I don't think the comments being levelled by some members of the ICAEW and ACCA at each other, as summarised in
Accountancy Age, do anyone any favours.
Size does not matter.
This isn't a pissing contest!
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Unemployed Chartered Accountants
There is an interesting and useful discussion going on at the LinkedIn ICAEW Group at the moment, concerning the number of Chartered Accountants who are actually unemployed and the role that the ICAEW should take/does take in helping them.
As ever with the ICAEW, there appears to be a disconnect between the views of Moorgate Place and some of the membership. Several pertinent points about subscription levels, and the need for global offices have been raised by a number of ICAEW members.
Here is the opening comment by Martin Lloyd-Penny, the full discussion can be followed by group members here
LinkedIn:
"
Is Michael Izza correct?On Monday I met the Michael Izza the CEO of the ICAEW and asked him how many Chartered Accountants are out of work - i.e. those that haven't retired and still want/need to work. Michael thought between 1,000 and 2,000 (out of a total of 135,000) and I think he may have underestimated the scale of the problem facing many of our members. Michael's estimate is based on the number of members that request a reduction in their annual subscription due to financial hardship - which maybe is not a true reflection of the scale of the problem. My view is that the number is significantly higher if you consider the numbers that:-
• Are not working at all and in many cases are claiming benefits
• Are having to find interim work as and when to support themselves – and the interim market is dead and there are literally thousands of highly experienced interim managers who can’t find any work.
• Are working part time and earning significantly less than they were 10 years ago
• Are having to resort to other means to keep a roof over their head – one of my candidates who was a CF partner in a London bank is driving a taxi!
• Are working as bookkeepers at £20 an hour in London – when I advertise that type of job I get up to 100 applicants of which 50% or more are qualified accountants.
Fortunately I continue to find lots of exciting opportunities for my candidates but I am not sure that the ICAEW is aware of the size of this problem. I know that they are trying to provide as much support as possible through CABA so I would like to make sure that the resource is being properly directed."
Labels: icaew, michael izza, subscriptions, unemployed
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Size Doesn't Matter
Accountancy Age reports that the latest survey of accountancy by the Professional Oversight Board shows that ACCA had 137,233 members worldwide in 2009, up from 131,398 a year earlier. The ICAEW saw member numbers increase to 134,698 from 132,411.
ACCA is now larger than the ICAEW.
Sadly this may be used by the ICAEW as an excuse to dilute the brand by making it easier to join the ICAEW.
A quote by "Peter" on the AA website alludes to the fact that this is already happening:
"
If the ICAEW is more elitist as the second comment claims why is it the case that they now allow members of other chartered institutes, ie CIMA, ACCA, to become ICAEW members (through the Pathways to Membership programme) without even taking the exams of the ICAEW after they have been fully paid up members of their own institutes for 5 years.
The ACCA and CIMA would only allow members of the ICAEW to become members of their institutes after passing the final exams of their respective institutes regardless of how many years they have been members of the ICAEW."
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EU Branch
AccountingWeb reports that The Institute of Chartered Accountants in England and Wales (ICAEW) has opened its third international branch, based in Brussels, which will bring together all the body's work across the European region.
The new arm will be the ICAEW's third international region and follows the launches of the South East Asia (Singapore) and the Middle East (Dubai) regions in 2009. It will be run by the ICAEW's new European regional director Martin Manuzi.
Not everyone sees the benefits of this, Jonathan White asks "
and how much and what exactly are the benefits to the rank and file membership here in the UK?"
Labels: icaew, subscriptions
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Easy
As per the
Economic Times:
"
Sameer Natu (37), head of finance for the rest of Europe at Dr Reddy's Laboratories, bears this out. A CA from India, he has been working in London since 2002, but doors opened up for him following an MoU between ICAI and ICAEW in November 2008.
'Though an Indian CA can get jobs or contracts in the UK, having an ICAEW qualification definitely gives them an edge. It gives them a qualification which is locally as well as internationally recognised,' says Mr Natu.
The MoU allowed Indian CAs to seek senior positions in companies in the UK and made it easier for them to be ICAEW members. To qualify, they had to take just three examinations out of the mandatory 15.
'Due to my six years of work experience in India, I had to appear in only one paper and complete ICAEW's structured training in ethics,' says Mr Natu. However, fresh CAs from India need to take three papers — business reporting, business change and a paper on case studies besides completing ICAEW's structured training in ethics programme."
Are we diluting the brand value of our qualification by making it easier for non members to become members in this manner?
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Fit for purpose
Peter Hargreaves has written this excellent piece in
Accountancy Age.
I need add nothing more:
"
During 2009 this magazine printed a profile of myself in which I stated that I was many things, not least chief executive of a public company. The thing of which I was most proud was being a chartered accountant. Indeed that is how I describe myself on my passport.
Something has perplexed me over the years. I hear accountants moaning about the profligacy of the Institute and fees but don't complain to the president. Accountants are supposed to be frugal and look after both their and their clients' money. It is a disgrace when the ICAEW doesn't set an example and show similar prudence.
The accounts of the ICAEW reveal several interesting facts. 600 people are employed on an average salary of £45,000 per annum. Most commercial organisations are moving to defined contribution pensions but they still have a defined benefit scheme. I am surprised how much the chief executive pays himself for presiding over this overstaffed bureaucracy (in 2008 £425,000 plus the final salary scheme).
The ICAEW it appears has acquiesced to a few cranks who feel the Institute should provide the unnecessary. Information on the economy, which most members never read, is probably done better elsewhere, not least by the four major firms of chartered accountants in this country. The Institute should have a limited role and chartered accountants wherever they may be should attempt to restrain the excesses. They should be confined to:
* maintenance of the register of members;
* examination of potential new chartered accountants;
* maintenance of professional standards and discipline of the occasional member that errs;
* communication to chartered accountants on accounting standards and other relevant factors which chartered accountants require in their job in industry or in their profession;
* advice on how to charge for their services.
I see no advantage to the members in England and Wales in having a Singapore office and various other offices throughout the world. I would have thought a hundred staff maximum could do the job that is required. Perhaps a member might care to stand for the council on the manifesto that 80% of what the Institute produces is superfluous. Failing that, perhaps members who don’t like the profligacy will write and express their dissatisfaction. I have written and expressed my dissatisfaction but I am just one chartered accountant. The latest accounts show there are now 133,000 members. Even if they paid half the fees they pay at the moment that is considerably more than a well run institute would need to provide more than what is required.
what not to do
'The institute only asks people what they want. I've told [chief executive] Michael Izza you ought to ask: 'What do you not want?' They provide lots of things because a few people ask for something. They produce lots of stuff most don't actually want – they should really find out a consensus of things. They should also work at improving the image of the accountant. That's what the institute should do. Accountants are not valued.'
Peter Hargreaves, July 2009.
Peter Hargreaves is chief executive of Hargreaves Lansdown"
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Spinning The Myth
I see on page 98 of January's Accountancy that Clive Parritt (ICAEW Vice President) is still spinning the myth (first espoused by
Anstee - "
Mr Anstee said the two-thirds voting threshold had allowed 'the minority to hold back the majority' and it was 'not beyond the bounds of possibility' the institute would ask its 127,000 members to amend the constitution to lower the barrier.") that the majority of ICAEW members voted in favour of a merger with CIPFA in 2005.
Parritt is quoted:
"...
within a members' organisation, a small but determined minority can sometimes frustrate the majority."
Clearly time has dimmed the ICAEW's memory, only
29% of the ICAEW membership voted in favour of the merger.
As I noted
at the time, 29% is not a majority!
Which part of the word "No" don't the ICAEW understand?
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ICAEW Axes Defined Benefit Pension Scheme
In
June 2006 I wrote:
"
Given the ever increasing pension black hole in the ICAEW accounts (it has grown by £4M over the last year), it is hardly surprising that the ICAEW has asked to raise subscriptions this year by 4% (which, despite their denials, is above inflation).
The triannual actuarial review will be carried out later this year and, as sure as eggs are eggs, we can assume that the black hole will have increased.
The astute amongst you will realise that the ICAEW will therefore be again coming cap in hand to its members, to ask for another inflation busting subscription increase in 2008.
Given these never ending increases in staff costs, why did the ICAEW hire 125 more people in 2006?
Do they regard the membership as a docile compliant cash cow which can be milked to death?"
The ICAEW have finally realised that the current arrangement, whereby subscriptions are increased each year to fund the pension black hole, is unsustainable. Therefore the ICAEW is going to cancel the final salary (defined benefit) pension scheme (closed to new members since 2000) next year.
Accountancy Age quote an ICAEW spokesman:
"
A spokesperson for the ICAEW said that the fund had become too costly in its current form and that the volatility of the market made it difficult to determine the amount of funding needed.
We will honour the commitments we have already made to those people in the scheme, and are committed to funding the deficit that exists."
The scheme currently has a £19M deficit.
I don't fully understand "
we will honour the commitments we have already made to those people in the scheme".
Given that the scheme has been closed to new members since 2000, the closure implies that those currently in the scheme will have to move to a defined contribution scheme.
On the assumption that is the case, how can the ICAEW "
honour commitments to those already in the scheme"?
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Tax Matters - Michael Izza
Michael Izza is interviewed by
AccountingWEB:
"
Q: In the ICAEW's Enterprise survey, 54% of respondents said UK regulatory and tax environment was 'not very' or 'not at all' business friendly. Employment tax and legislation and business tax changes were all regarded a hindrance. Why do you think businesses responded so negatively and what do you think can be done to improve the situation?
A: This is a constant refrain, and we hear this from businesses of all sizes. We have a great opportunity this year because we're moving into the last few months of this government, there has to be an election no later than June 2010 and this is now the time when business people of all sizes can start to talk to their MPs (or prospective MPs) about the things that bother them and the legislative changes they would like to see.
The institute has issued a manifesto and that was something we were talking to politicians about at the three main party conferences in September and October. One of the themes in it is that we need a more simplified government in this country. An area which I'm sure many of your members will be familiar with is the tax code. The tax code in this country now runs to over 11,200 pages.
There is nobody in HMRC who understands that from A-Z. There is no chartered accountant in this country who understands it from A – Z, it's just become too complicated. We have an opportunity to make something like that more simple, for everyone in business. This is the sort of thing we should be talking to the politicians about now and saying we want to see it changed.
We're at one of those moments in history where because of the economic crisis that we've just experienced and the fact that things are going to be very different going forward, we might be able to make a very significant change in something like that; and that's the sort of thing the institute is going to be asking for".
I fully agree wrt simplification. However, this is something that the ICAEW should have been calling for way back, not "
going to be asking for"!
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Bangladesh
Accountancy Age reports that a deal has been made between the ICAEW and the Institute of Chartered Accountants of Bangladesh (ICAB) wrt developing the profession.
"
Both will look at examining requirements allowing members of one body to access the other."
I assume that any inter institute membership, if it occurs, will be structured in such a way as to ensure that the brand value of the ICAEW qualification will not be diluted.
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In From The Cold
Ernst & Young will take ICAEW students again, having abandoned the ICAEW at the turn of the century in favour of ICAS.
However, Ernst & Young will continue to use ICAS.
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Gerson Lehrman News
Off topic, I write articles covering business issues for Gerson Lehrman News, and am an Accounting & Financial Analysis Council Member (AFA Council Members include CFOs, former top regulatory body officials, partners from the world's leading accounting firms, academics, forensic accountants, and other financial executives).
The news articles can be accessed via this link
Gerson Lehrman News.
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Online Community
Accounting Web reports that the ICAEW is to launch a new online community for accounting students.
The site will offer information and guidance on relevant topics to support ACA and CFAB students, as well as containing a forum where members can swap tips and network. Membership will be open to all ACA or CFAB students, including those outside the UK.
Good idea, when will there be an online community for qualified members of the ICAEW?
Update: I stand corrected, it seems that there are some non student communities; evidently I have either been asleep for the past few months, or ICAEW did not publicise these very well.
The list of communities can be accessed via this link
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Madden Leaves
Accountancy Age reports that Dr Raymond Madden, executive director for learning and professional development of the ICAEW, is leaving his post this week without warning.
His duties have been taken on by Mark Protherough, director of learning and professional development at the institute.
The sudden departure was, seemingly, unexpected.
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