ICAEW News

ICAEW News

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Originally dedicated to fighting the proposed merger of the ICAEW with CIMA and CIPFA, this site now provides news about the ICAEW

Do you think the ICAEW rebranding was money well spent?

Thursday, October 27, 2005

Peace In Our Time?

So much for the ICAEW taking on board my advice to make peace with ICAS.

The Scotsman reports that:

"Eric Anstee, chief executive of the Institute of Chartered Accountants of England and Wales (ICAEW), told The Scotsman that, despite his members narrowly voting not to merge with the Chartered Institute of Public Finance Accountants (CIPFA) this week, he plans to go ahead with an application to the Privy Council to drop "England and Wales" from its title.

The move has infuriated accountants in Scotland, whose governing body, the Institute of Chartered Accountants Scotland (ICAS), has already protested to the council about the move, with the support of the First Minister, Jack McConnell, angry it contravenes the convention that accounting bodies must carry a national name in their title
."

In my view, not only is this pig headed and arrogant policy going to further worsen our relationship with ICAS, at a time when we should be making peace with them; the public argument between the two professional bodies, and negative publicity that this will attract, will irreparably damage the reputation and brand value of the ICAEW.

If anyone on the executive or council of the ICAEW has any sense, they will stop this now.

Back To Basics

Congratulations to Accountancy Age for their misleading headline today.

On their front page, in a nice big blue box, they state that 65.7% of the ICAEW voted for the merger.

How can that be, if only 44% bothered to vote?

Speaking as a qualified accountant myself, I would say that the correct headline should read 29% voted in favour.

Still, why let facts get in the way of a good headline?

I am sure that there are a few of you reading this who, for a modest fee, would be happy to provide AA with a remedial course on basic mathematics and stats.

Those of you who wish to point out the error on their front page, should address your comments to comment@accoutancyage.com

Wednesday, October 26, 2005

29% Is No Mandate For Merger

Yesterday's ICAEW merger vote saw a mere 29% of the membership backing the merger proposal.

This is very clearly a resounding "No".

Yet an article in the FT today notes that:

"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."

In other words, having been wholeheartedly rebuffed by the membership, the ICAEW executive are going to ignore the membership.

I have repeatedly warned that their promise to run a dual qualification system, if the merger had been accepted, would have been broken.

It seems that changing the rules of the game, to suit the political imperative of the executive, is now on the cards.

The battle may well have been won, but the war is not over.

It is now time for the membership to wrest control of the Institute from the hands of the current executive, and cut the size of Council.

Tuesday, October 25, 2005

Merger Rejected

The merger between the ICAEW and CIPFA has been rejected, by the narrowest of margins.

65.7% of ICAEW members, who voted, voted for the merger; less than 600 votes below the 66.7% majority needed to carry the motion.

However, the 37,004 members who voted in favour of the merger represent a mere 29% of the total membership of the ICAEW.

Hardly a mandate for merger!

The close margin just goes to prove that the outcome was far from certain, and that every vote counted.

I am pleased to say that turnout was reasonably good, compared with other votes, 56,326 members (44%) voted.

I understand from feedback at the meeting, that the younger members, who have only recently qualified, were the most keen to maintain the brand value of the qualification that they have worked so hard for.

This puts into perspective the media spin that has been used by some, to portray the "anti merger camp" as being out of touch and "of a certain age".

I would like to thank everyone for their help and support in stopping this misguided merger proposal.

I am very pleased with the result.

The brand value of our qualification has been maintained.

However, there are issues that now need to be addressed:

1 The size of council needs to be cut from its current level of over 90, to 12.

2 Peace needs to be made with ICAS, with a view to merging in the long term.

3 £1.4M has been wasted, members of the ICAEW executive team should now consider their positions.

4 Our relationship with Media Strategy should be terminated.

I will continue to run www.stopthemerger.org, to ensure that these issues are addressed.

Once again thank you for your help and support.

Ken

Monday, October 24, 2005

Phone Home

Tomorrow, in case you had all forgotten, is the day that the result of the ICAEW merger vote will be announced.

Unfortunately, I will not be able to attend the meeting.

However, I wonder if there is anyone who is attending who would be willing to call me with the result as and when it is announced?

I will then post the result here, as soon as I know it.

If there is anyone willing to volunteer to call, please could you email me and I will let you know my contact number.

I would be very grateful.

Thanks for your help and support on this.

Ken

Thursday, October 20, 2005

Poll Shows Members Against Merger

53% of ICAEW members are against the proposed merger with CIPFA, according to the poll conducted by Accountancy Age.

Accountancy Age also confirm the story featured on this site four days ago ("£1.4M Wasted"), that the cost of the merger campaign has been at least £1.4M.

Money well spent!

Sunday, October 16, 2005

£1.4M Wasted

According to today's Independent, the ICAEW has spent £1.4M on trying to win the merger campaign.

I would suspect that the figure excludes the fees paid to Media Strategy, the PR firm hired by the ICAEW to persuade us.

However, the article also notes that the ICAEW is preparing itself for an embarrassing climb down; as private polls show that it might lose the vote.

I would like to make this observation, the vote is not over until the polls close; as such it is vital to ensure that everyone votes on this issue.

Please make sure that everyone you know votes.

Thanks for your help and support.

Ken

Just in case you have forgotten, here are a few reasons as to why you should vote against the merger.

I have recorded a short video outlining my personal views about the ICAEW merger proposal.

Please click the following link to watch the video ICAEW Video 10MB.

I also have a "high quality" 22MB version, which you can view here ICAEW Video 22MB.



Reasons To Vote No

  • The merger will dilute the brand


  • Merging CIPFA and the ICAEW is not a merger of equals, we should be merging "like with like"


  • The merger will increase the size of Council, from its current unwieldy and inefficient size of 90, to 115 members


  • A two tier membership, as promised by Council, will be confusing to the membership, the outside world and impractical to administer


  • Council will renege on its promise to run a dual qualification system


  • To hand over control of the governing council of the ICAEW, to a new body, will denude the current membership of its right to veto who can become an accountant


  • We should be talking to ICAS about merging, not CIPFA and CIMA


  • The ICAEW have mismanaged the merger proposal from day one, by talking to the wrong bodies and by antagonising ICAS over the choice of name


  • The Audit Commission has noted that 25% of submitted local council accounts have to be resubmitted, because of significant errors and "significant" departures from UK GAAP


  • The mixture of qualifications that the merged body would embrace, would mean that it could not accurately claim to be called The Institute of Chartered Accountants


  • The proposal to takeover CIPFA will add only another 13500 members to our numbers, that represents a mere 11% of our current membership. This will not alter the status quo, or increase our standing within the financial community


  • If the merger were truly "revenue enhancing", as the ICAEW would have us believe, why did they raise subscriptions by 9% for 2006?


  • The ICAEW is meant to represent the interests of its members, yet it is ignoring the membership and wasting our money on trying to convince us of the need to merge with CIPFA

Thursday, October 13, 2005

PR Blunder

Reading the front page of today's Accountancy Age I wonder if the ICAEW and their advisers, Media Strategy, haven't made something of a PR blunder last week; by persuading some of the senior partners of the larger accountancy firms to publicly back the proposed merger with CIPFA.

I understand that at least one of the Big 4 has actually posted a notice to their staff indicating that it is their official policy to favour the merger.

Accountancy Age report that other professionals have expressed serious disquiet about influencing their own staff on the merger vote.

The professionals quoted in the report note that it may not be appropriate to try to influence staff, and that they did not want to put their firm's name to something that might not express a commonly held view.

I suspect that, human nature being what it is, many will feel more than a little annoyed at being told how to vote by their firms.

Were I in charge of the ICAEW, and I am not at the moment, I would be asking my PR advisers exactly why they thought that this media stunt was such a good idea.

ICAS Update

Mike Hathorn, President of ICAS, has issued another open letter to the members of ICAS; which updates them on the issues surrounding the ICAEW name change proposal.

He starts by saying:

"I have been overwhelmed with the volume of responses in the last few days.."

The full text can be read here ICAS open letter.

The name issue is causing a lot of bad feeling, on an international level, and is something that could have been avoided if the ICAEW had properly thought the merger proposal through.

More to the point, the ICAEW should have conducted discussions with ICAS with a view to merging.

What's In A Name?

My thanks to Kamran, who sent me the following message:

"It has recently come to my notice that members of a UK based professional body are already using the MICA designatory letters.

The name of the body is the International Compliance Association - ironically the abbreviation for this body is also ICA.

Their website is at www.int-comp.org

We are now going ahead with a vote to form an Institute whose name is undecided, and whose members will use designatory letters of some other Institute.

This goes to show how ill planned this merger is.

It is like sitting for exams without any prior homework or revision!"

VOTE NO TO THIS MERGER OR ELSE LETS FORM A BREAKAWAY INSTITUTE!

Regards,

Kamran Sekha, ACA, CPA
"

As Kamran says, this is another example of how the merger has not been properly thought through.

Wednesday, October 12, 2005

Parliamentary Motion Tabled Against Name Change

Motions are to be tabled at Westminster and the Scottish Parliament, opposing plans by the ICAEW and CIPFA to change their name to 'The Institute of Chartered Accountants'.

The name is the preferred choice of the two Institutes if their consolidation vote is successful.

The moves come after the First Minister of Scotland, Jack McConnell, announced his intention to officially object to the Privy Council about the proposal.

The Deputy Leader of the Scottish Liberal Democrats and ICAS member, Michael Moore MP, is tabling an Early Day motion at Westminster, calling for the ICAEW and CIPFA to maintain the unbroken convention that Chartered Accountancy Institutes carry a geographical designation in their name.

Mr Moore added:

"The change of name should not be approved. There are many 'Institutes of Chartered Accountants' around the world. It would be quite wrong to allow one body to give the impression that there is only one, or that they were the first."

Brian Monteith MSP, the Conservative member for Mid – Scotland and Fife and also convener of Holyrood's audit committee, has tabled a motion which he is confident will attract cross-party support.

He said:

"This proposal is against the interests of ICAS and similar bodies across the globe. The Privy Council should not approve a Royal Charter change that would assert a false sense of superiority to the new body".

ICAS President, Mike Hathorn, welcomed the support:

"This backing at Holyrood and Westminster is an important endorsement for our arguments against this proposal. We continue our ongoing discussions with both the ICAEW and CIPFA to find alternatives to this increasingly unpopular choice of name."

Source ICAS

There is already an Early Day Motion against Media Strategy (the PR advisers to the ICAEW, paid for by the membership).

It is quite clear that this badly thought through, and badly managed, merger proposal is doing untold damage to the name, brand and reputation of the ICAEW.

Those responsible will have to resign once the vote goes against them.

Tuesday, October 11, 2005

ICAS Stops Fastracking CIPFA

ICAS have announced today that they have closed a scheme which offered CIPFA members fast-track membership of ICAS. Around one in six CIPFA candidates who began the scheme completed it and became members.

The focus in the ICAS syllabus on International Financial Reporting Standards has meant that CIPFA candidates, many of whom have not covered IFRS, can no longer be given the exemptions that made accelerated entry to the Institute possible.

Chief Executive Desmond Hudson said:

"When the course was first offered to CIPFA members, the accountancy landscape was very different. However, the educational content of today's CA qualification has changed dramatically. Unfortunately for CIPFA, it means it is no longer sustainable for their members to benefit from this fast-track entry to ICAS."

Executive Director of Education at ICAS, Mark Allison added,

"We will shortly be contacting our remaining CIPFA students to confirm the transitional arrangements which will allow them to complete their studies".

Source ICAS

ICAEW should take note of this.

Letter From The President

I draw your attention to the open letter written to the members of ICAS by Mike Hathorn, President of ICAS.

In it he explains the rationale for the opposition by ICAS to the proposed name change by the ICAEW, if the merger between ICAEW and CIPFA goes ahead.

One paragraph particularly caught my eye:

"After months of ICAS asking to meet to attempt to resolve the dispute sensibly, talks finally began on 17th August 2005. Although we believe these discussions should have started many months ago, we remain committed, as we have been from the outset, to pursue them honourably and seriously..."

This again confirms one of the main points that I have been putting forward on this site, namely that the ICAEW has mishandled the merger issue from the very beginning.

The issue regarding the name, and the delay in meeting with ICAS, has soured relations with the one body that we we should be discussing merging with.

The full text of the letter can be read here Open Letter.

Monday, October 10, 2005

Welsh Members' Press Release

Bruce Lawson FCA, of the Welsh Members' against Consolidation, asked me to publicise this press release today.

Does this not rather make a mockery of Accountancy's assertion (October issue page 30) that there is no organised opposition to the proposed ICAEW/CIPFA merger?

Your Vote Counts Double - Use It To Vote 'No'

Members Against Consolidation (MAC), a group of Welsh practising accountants supported by many others across the U.K., believe the proposed merger is flawed, face saving, expensive and will tarnish the Chartered status of members of ICAEW.

Consider The Following

ICAEW have a "planned deficit" for 2005 of £1.39 million. Why?

Subscriptions went up by 7.5% in 2005 and are set to rise 9% in 2006. Why? The final proposals speak of "net cost savings of not less than £4 million will be achieved by the end of the first two years".

"CIPFA represents 13,500 members working" Page 3, Message from Council. CIPFA has, in fact, 10,584 active members (Accountancy, October 2005). ICAEW webcast talks of 14,000. Why the spin?

Two straw polls in Wales and the Marches in February and August 2005 involved 700 practising accountants. 120 of those replied, of whom 90% were against the merger.

MAC wrote to all 2005 Council Members (95 of them) in September. It emerges in replies from several of them that they are gagged on the merger issue; one member commented "At present, members are not permitted to discuss the merger in public or let their views be known". There is not unanimous support on Council for the merger.

Nevertheless, senior partners of all major firms have written a collective letter in Accountancy Age promoting the merger. Presumably they all have partners on Council!

Another former Council member comments "When I was on Council, I too tended to feel that we were being fed a lot of spin that required us to trust the Chief Executive and the Officers although I understand at least one of them had been gagged and did not support the merger".

Another ICAEW Council Member resigned within the last year over "woolly financial planning and reporting".

Another Council member commented that the presentation at Council Conference in July of the merger figures was poor, and that another meeting was convened for September when it was then reported that due diligence was not quite complete! He felt reluctant to accept the mooted £4 million saving.

CIMA have no place for a merger in their future strategy (see their website).

The merger is unnecessary. ICAEW have already alienated Institutes in Australia, India, New Zealand and Scotland over the name issue. The Privy Council may not accept the Institute of Chartered Accountants as a future name. What then?

What are the costs to date of this activity - £1-£2 million? How many man hours have been devoted to this issue, which could have been better used elsewhere.

YOUR VOTE AGAINST COUNTS DOUBLE. ICAEW need a two-thirds majority. Read the interview in Accountancy Age with ICAEW executives (6th October, Page 20) carefully. Is it our professional institute or a Plc seeking growth for growth's sake?

PLEASE VOTE NO

If you don't, sadly we'll reach the stage, after 125 years, where the ICAEW logo and its universally acclaimed goodwill and reputation will be sacrificed simply to increase its size by a paltry 8%.

MEMBERS AGAINST CONSOLIDATION

(C. B. Lawson, F.C.A. and others 10 October 2005)

Thursday, October 06, 2005

Details Details Details

There is an interesting, yet maybe not obvious, difference in wording between the ICAEW merger proposal document sent to the members of the ICAEW, and the CIPFA merger proposals sent to the members of CIPFA.

The CIPFA document says (page 7):

"All members will use the title 'Chartered Accountant'".

The ICAEW document says (page 7):

"All qualified accountant members will be entitled to use the description chartered accountant".

The dual designatory letters, so emphatically emphasised by the ICAEW as being a guarantee of the ICAEW brand, will be debased and ignored if we are all called chartered accountants.

The question also arises, why is there a difference in wording between the two documents?

Many Oppose The Merger

The Times notes today that the proposed merger between the ICAEW and CIPFA "faces opposition from many members of the ICAEW".

The article then goes on to add that "many believe the ICAEW will find it difficult to obtain the two thirds majority required".

Funny that Accountancy didn't note the large scale opposition, in their October edition?

The Times article even mentions the existence of website opposing the merger; again, funny that Accountancy didn't mention this?

The Times also has another article, which outlines the history of the previous failed attempts to merge.

In this article Damian Wild, editor of Accountancy Age, is reported to doubt that the ICAEW will succeed in its attempts to merge with CIPFA.

Wednesday, October 05, 2005

First Minister of Scotland Backs ICAS in Name Dispute

The First minister of Scotland, Jack McConnell, has given his backing to ICAS's objections to the proposal by ICAEW and CIPFA to call the newly merged accounting body (if they win the merger vote) The Institute of Chartered Accountants.

McConnell is quoted in Accountancy Age as saying that the name would give a "false sense of representational status" to the merged body.

ICAS have confirmed that McConnell would complain to the Privy Council "if required".

ICAS state, in a press release, that:

"..ICAS has been deluged by a membership response from around the world entirely opposed to the name change and is heartened by the support of other Institutes..".

Des Hudson Chief Executive of ICAS said:

"The backing of the First Minister, Scotland's highest constitutional office holder, is terrific news for ICAS and an endorsement of the role of CAs in Scottish, UK and Global business. It is a very important step in ending this proposal.."

Needless to say ICAEW chief executive, Eric Anstee, is trying to push this under the carpet; by saying that "the name issue should not cloud voting".

The failure of the ICAEW to handle the name issue shows just how badly they have thought through the whole merger proposal.

The name issue is a clear example of the failure of leadership and planning shown by the Council, and the executive team, at the ICAEW.

I trust and assume that there will be resignations a plenty, once the members of the ICAEW have voted against the merger.

Vote for change, vote against the merger.