CIPFA and ICAEW Fast-track Pathway To Dual Membership - Merger By The Backdoor

 

Today's announcement by CIPFA and the ICAEW of a fast-track pathway to dual membership has raised eyebrows among some in the accountancy profession. Some see it as a positive development, as it will allow accountants to move more freely between the public and private sectors. Others, however, are more sceptical, and believe that it is simply a backdoor to a merger between the two bodies.

There are a number of reasons why this scepticism is justified. First, the two bodies have been working more closely together in recent years. In 2021, they signed a memorandum of understanding to "explore opportunities for closer collaboration". This collaboration has included sharing resources and expertise, and working together on joint initiatives.

Second, the fast-track pathway to dual membership is not the only way that accountants can move between the two bodies. CIPFA members with less than five years' experience can already apply to join ICAEW through the Pathways to Membership programme. And ICAEW members with less than five years' experience can already apply to join CIPFA through the Fast Track Route.

So why did CIPFA and ICAEW feel the need to create a new fast-track pathway? 

One possibility is that they are simply trying to make it easier for accountants to move between the two bodies. However, it is also possible that they are laying the groundwork for a merger which would dilute the ICAEW brand.

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The Emperor's New Clothes

As loyal readers know, I have often likened the ICAEW to a Victorian trading association (given its overpopulated council and the absurdly out of date rules for standing for election to council etc).

Yesterday the ICAEW and its member subsidised media organ economia managed to raise the bar on "Victoriana", with regard to a prize offered for completing a survey about the economia app.

The prize in question was a bespoke suit (up to the value of £1K) crafted by a London based tailors. So far so good, except that as Elaine Clark (British Accountancy Awards winner 2014) pointed out the tailors only make suits for men!

Errm, does the ICAEW not realise there are women accountants?

When Elaine raised the issue on Facebook and Twitter with economia/ICAEW, she was told that the tailors would make a suit for a woman (except that when she called the tailors, they said they don't make women's suits).

Economia then dug itself further into the hole of its own creation by calling Elaine, and asking her to remove her comments from Twitter etc.

I dare say some face saving amendment to the prize rules will now be made. However, the damage is done.

Once a brand is damaged it is very hard to undo that damage. The ICAEW should have learned that lesson a few years ago, when they tried to merge with Cipfa!

ICAP Fiasco Rumbles On

It seems that ICAP's decision to ban foreign accountancy students has stirred things up in the UK.

Yesterday I asked:

"Does this ruling apply to ICAEW students?"

By all accounts the ICAEW is also wondering this.

PQ Magazine reports that three UK-based accountancy bodies are seeking clarification from ICAP as to exactly what is going on.

The ACCA is looking for a formal meeting the ICAEW "is seeking clarification from ICAP as to what the implications are for ICAEW students", whilst CIMA said "we are fully aware of the situation and remain in regular discussions with ICAP."

It is unclear what ICAP's response, if any, has been.

It is possible that ICAP have realised that their decision may have been taken in haste, and that they now don't know how to respond.

ICAP Ban Foreign Accountancy Students

In July 2009 I wrote the following:

"A fellow member of the institute wrote to me today, voicing his fears over the dilution of the ICAEW brand wrt less demanding entry requirements for members of the profession who qualified in India and Pakistan.

"I recently discovered that ICAP(Pakistan) members just need to pass ICAEW 4 papers to become ICAEW members. Moreover ICAP members do not need to undergo any training with ICAEW ATO.

In past (until last wk) ICAP members needed to pass ICAEW 4 papers plus undergo 2 yrs training with ICAEW ATO to become ICAEW member, but now ICAP members do not need to undergo any training.

I do not know why ICAEW is giving its membership of other institutes members in this way. If ICAEW does not want other institute's members to undergo any training in ICAEW ATO (which is main strength of ICAEW), then I have to say merger with ACCA is a better option....

ICAEW has given more relaxation to ICAI(India) members."

Whilst the ICAEW may be relatively relaxed about brand dilution, it appears that ICAP are not.

PQ Magazine reports the following:

"Thousands of ACCA students are planning a protest march on the headquarters of the Institute of Chartered Accountants of Pakistan (ICAP), in Islamabad, tomorrow.

The march is in direct response to a letter sent by the ICAP to audit firms allegedly reminding them that hiring students with ‘foreign’ accountancy qualifications breaks Section 22 of the Chartered Accountants ordinance 1961.

PQ magazine has seen the letter behind the storm of protest - ‘Engaging a person as trainee of other bodies’. It specifically says: “refrain from engaging trainees of other accounting bodies, particularly trainees of foreign institutes of Chartered Accountants, or any other accounting body of similar nature.”

Social media sites erupted over the weekend with some students suggesting the letter must be a ‘fake’. Others wondered if ACCA, ICAEW and CIMA students would be deemed as ‘working illegally’ in Pakistan. "

Does this ruling apply to ICAEW students?

Here is a link to the ICAEW's page about ACA training in Pakistan.

You will need to meet one of the criteria to be able to study for the ACA from ICAEW.

• Members of the Institute of Chartered Accountants of Pakistan (ICAP) living in Pakistan who have obtained ICAP membership by complying with its training and examinations requirements can study for the ACA and apply to join ICAEW.
• Members of the Institute of Chartered Accountants of Pakistan (ICAP) living in other countries who have obtained ICAP membership by complying with its training and examinations requirements can study for the ACA and apply to join ICAEW.
• Students, affiliates or members of another internationally recognised professional accountancy body (such as ACCA) living in Pakistan may be able to study for the ACA in Pakistan. 

Saj Ahmed states on LinkedIn:

"I believe that the core issue is that the ICAP is losing ground to the ICAEW in Pakistan. New student members joining the audit firms wish to opt for ICAEW qualification as oppose to ICAP. 

This is because they know that they can do better with the ICAEW than the ICAP overseas. 

 ICAP's student numbers are down and hence such an action has been taken in order to protect their interest."

This appears to have stirred up a hornet's nest.

Cameron Lambastes Accountants Again! - ICAS Weighs In

I am pleased to see than Anton Colella (CEO of ICAS) is also less than impressed with Cameron's comments about accountants:

""People want to know that we’re not just a bunch of accountants trying to turn around the British economy as if it were a failing company, but that we’re resolutely on their side as we do,” said Prime Minister David Cameron earlier this week. It’s an unhappy irony that, in making an appealing point, Mr Cameron should malign an entire group of hard-working professionals.

ICAS represents over 19,000 world-class business-women and business-men. Now that’s just a – big – bunch of chartered accountants (CAs).

But it’s also a bunch of dedicated and passionate professionals, working to serve clients and investors in the public interest.

It’s a bunch of business leaders, who head up some of the biggest companies in the country, in public practice and in a myriad of business roles, providing employment, innovation and tax revenue.

It’s a bunch of volunteers, who provide their expertise to a range of charities across the UK and abroad with organisations like Accounting for Development, an organisation which matches CAs with organisations in developing nations.

I am sure Mr Cameron didn’t really intend to denigrate accountants. However, the notion of accountants as uncaring bean-counters is at odds with my experience of enthusiastic, hard-working CAs, whose energy and insights and will be key drivers of the UK economy’s recovery.

Prudence is a watch-word for accountants; in reporting, in auditing, in projecting. Prudent phrasing, in this case, might have helped avoid one group of people feeling as though Mr Cameron was not resolutely on their side."

The drip drip of negative comments about accountants, tax efficient schemes, tax avoidance etc, that are coming from Osborne and Cameron, are deliberately designed to play to people's prejudices about the profession and about those involved in the "dark arts" of financial advice.

It undermines the brand value of accountancy as a profession. We should not simply roll over passively, like some pitiful Victorian clerk, and let the politicians use our profession for their own political ends.

As I said a couple of days ago, an open joint letter from the UK's leading accounting bodies is required.

Plus members of the profession should tweet @Number10gov to tell Cameron to stop this nonsense, and make #accountinggate a trending topic.

ICAEW International Constituencies

Accountancy Age reports that the council of the Institute of Chartered Accountants in England and Wales (ICAEW) has voted (without any form of irony) for the establishment of international constituencies for direct election to the council.

This of course means that the designation "in England and Wales" is now irrelevant and misleading.

Constituencies will be set up in regions and countries where there are at least 2,000 ICAEW members, on the basis of one council member per 2,000 ICAEW members.

As a result, constituencies will be set up in mainland Europe (one member), Hong Kong (one member), North America and the Caribbean (two members) and Oceania (one member) with a view to setting up further constituencies in Africa, China, the Middle East and South East Asia in the future once those areas hold enough members.

Needless to say budget allocations of members' subscriptions, because of this change, will at some stage be reapportioned.

Given that this is such a fundamental change to the ICAEW I am surprised that it was not put to the vote of the members.

I assume that the outdated Victorian trade association rule that states that members who wish to stand for election can only be nominated by 10 members within their region will remain?

Will the ICAEW in the future at least notify members within a region that someone wishes to be nominated, or will they still block that as they did when I tried to stand in 2007?

Here Comes Economia

The ICAEW have recently announced the name of their new in house magazine that will replace "Accountancy".

It will be called Economia.

Quote:

"As you may be aware, in February 2012 we are launching a new member magazine to replace accountancy as part of the annual ICAEW membership. The new all member magazine is called economia.

Why have we chosen the name economia?

This is the name of the figure at the heart of our logo who has represented ICAEW since its inception over a hundred years ago. She embodies the values of the profession which are so important to chartered accountants today. 

economia will reflect these values, providing the latest analysis and commentary on financial and accountancy news, essential technical updates and the most up-to-date business, management and economic trends. Plus, a whole lot more."

It is interesting to see that Wolters Kluwer have retained the brand name "Accountancy" for their magazine (which ICAEW members will have to pay for as from February 2012 if they still wish to receive it).

Christie Malry on FCAblog is worried about finding a decent URL, it seems the main ones are owned by non ICAEW organisations (why didn't the ICAEW check this first?).

I have checked and the Economia url is still available with the "xxx" adult extension, together with org.uk and me.uk.

As tempted as I am to buy them up, this time I will let that opportunity pass:)

Oh what the hell, I can't resist, I have now bought www.economia.org.uk!

Diluting The Brand Via The Back Door

The ICAEW has announced plans to work more closely with the Institute of Certified Accountants of Kenya (ICPAK) and has signed a Memorandum of Understanding (MoU).

The MoU enables qualified ICPAK members to apply for ICAEW membership subject to certain requirements, which include passing ICAEW’s Advanced Stage examinations and attaining a period of work experience with an ICAEW Authorised Training Employer.

ICAEW members can apply for ICPAK membership subject to passing Kenya tax and law papers delivered by Kenya Accountants and Secretaries National Board.

It seems that the ICAEW is intent on growth by numbers, irrespective of the fact that the method chosen dilutes the brand.

Breaking Ranks?

Citywire reports that the ICAEW plans to "break ranks" with fellow accredited bodies and offer statements of professional standing (SPS) to advisers who make a one-off payment rather than requiring them to join as members.

The ICAEW has applied to be an accredited body, and expects to be approved by the Financial Services Authority in December 2011.

Other accredited bodies, such as the Institute of Financial Planning and Chartered Insurance Institute, want advisers to be members in order to be issued with a SPS.

Vernon Soare, ICAEW executive director of professional standards, said:

"They won't have to be a member.

They just need to register with an accredited body, they pay a registration fee and we do a review of continual professional development."

The proposal has generated a fair amount of heated "debate".

However, so long as the ICAEW's "certification process" does not get dragged through the mud by a conman (a certificate does not make a man/woman a "professional"), it does not seem to be an unreasonable proposal.

Anal Issues

Accountancy Age reports that Alan Livesey, an ex ICAEW Scottish council member, is none too happy with the ICAEW over rules "fudging" at the recent elections.

The ICAEW is trying to ditch its "boring Blighty" connections/brand, by growing internationally (coming soon a motion to change the name). As such council composition has been changed, and the number of reps from UK constituencies cut (eg Scotland lost one of its two council members - can you guess who?).

Note: does anyone not see the irony that the "English" Institute has Scottish councillors, given that the "English" Institute once rejected a merger with its Scottish brethren and vice versa?

Anyhoo, it seems that "technical errors" meant that the required period between voting and Tuesday's AGM (constitutionally set at 14 days) was breached, forcing an emergency suspension of election rules.

This was approved by the majority of council members. However, Livesey argues:

"There appears to be one set of rules for the masses and another, seemingly unchangeable set of rules for the institute."

All very "anal" maybe, but it rather misses the point.

As long as the ICAEW claims to be the "English" Institute, it should not bring in non institute members to council without first clarifying to its main membership why international growth is to the benefit (as opposed cost) of its members and brand value of its qualification.

Global Ambitions Chinese Whispers

The dangers of the ICAEW's global ambitions are revealed by a question posed at the ICAEW council meeting by Alan Livesey.

Accountancy Age report that he raised the problem of students in China (where the ICAEW has recently opened a new office, to great fanfare) passing their exams without ever having paid their membership.

The institute's board was taken aback by the suggestion, and promised to investigate.

Global Ambitions - The ICAEW Looks East

The ICAEW's ambitions know no bounds (internatioanlly at least).

Accountancy Age reports that the ICAEW has opened a new office in Beijing, in order to extend its reach in China and Hong Kong.

I wonder how much this office and its staff will cost the membership?

Come to think of it, why does the Institute of Chartered Accountants in England Wales need an office in China?

Whilst people ponder those two questions, Accountancy Age goes on to report that Douglas Lau (regional director of the ICAEW in greater China) will head up the new office.

Factoid: The ICAEW has 200 members in mainland China and around 3,000 in Hong Kong.

As part of the ambition to grow its membership (its attempt to do so by merging with CIPFA et al was thwarted in the UK) the ICAEW will work with the Chinese Institute of Certified Public Accountants and the Hong Kong Institute of Certified Public Accountants, with which it has signed memorandums of understanding.

There's irony for you!

It would seem that the article I wrote in October 2010, about ICAEW's ambitins in Sri Lanka, is also applicable to the Chinese venture:

"Global ambitions are all well and good. However, care needs to be paid by the ICAEW to ensure:

1 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.

2 That, given the recession and high cost of subscriptions, UK members' subscriptions are not frittered away on global ambitions that have little relevance to the UK membership."

Global Ambition II - Are ICASL and ICAEW About To Merge?

In October 2010 the ICAEW and the Institute of Chartered Accountants of Sri Lanka (ICASL) signed an MoU designed to establish closer working relationships.

I noted the following at the time:

"Global ambitions are all well and good. However, care needs to be paid by the ICAEW to ensure:

1 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.

2 That, given the recession and high cost of subscriptions, UK members' subscriptions are not frittered away on global ambitions that have little relevance to the UK membership."

I see that according to the Daily Mirror in Sri Lanka:

"Justin West, ICAEW’s Head of New Business Opportunities declared that the two institutes were looking at going beyond exchanging membership and was seriously focusing how the two institutes can share talent, ideas and technical expertise which will help take the profession forward.

In a detailed presentation, West who articulated the international recognition possessed by ICAEW and thereby the benefits that members can enjoy with an ICAEW membership, disclosed that within the next six months, both Institutes will make an announcement on the tangible benefits that its members can enjoy which would help in the further development of their professional goals."

I also note that ICAEW has extended the fee waiver, valued at £900, offered to all ICASL members until September 2011 who wish to join ICAEW.

Are ICASL and ICAEW about to merge?

My comments made in October 2010 stand.

Have CIMA Shot Themselves In The Foot?

Following the announcement by CIMA that they are to leave the seemingly moribund CCAB, there have been a number of comments posted on Accounting Web by members of CIMA.

Aside from the issue that none of them were consulted over this move, there is also the valid point being made that many accounting jobs require a CCAB qualification.

Now that CIMA have removed themselves from CCAB, does this not put their members at a disadvantage?

Have CIMA by their actions damaged their brand and made themselves and their members a lesser body or, does CIMA know that CCAB is about to implode and that this is in fact a canny move that ensures that they will avoid the chaos that will ensue?

Global Ambition

I see that the Institute of Chartered Accountants of Sri Lanka (ICASL) and the ICAEW have signed a Memorandum of Understanding (MoU), on 25th October 2010, designed to establish closer working relations between the two bodies.

Gerald Russell, ICAEW President, is quoted by dailymirror.lk:

"ICAEW and the ICASL have developed a close working relationship over the years and as a result of this agreement, we look forward to welcoming ICASL members to ICAEW.

Removing barriers for professional accountants across markets, through agreements such as this, is an important part of our international strategy.

ICAEW is keen to work in partnership with accountancy bodies across the world to enhance the profession globally."

Global ambitions are all well and good. However, care needs to be paid by the ICAEW to ensure:

1 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.

2 That, given the recession and high cost of subscriptions, UK members' subscriptions are not frittered away on global ambitions that have little relevance to the UK membership.

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?

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!

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."

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?

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.