The Institute of Some Chartered Accountants

It seems that our colleagues in Scotland are more than a little "peeved" at the proposed name of the proposed merged institute.

ICAS have posted a letter on their website sent by Ian Robertson, the ICAS president. In it he says that ICAS and its members would "robustly oppose" the name.

Quote:

"The style proposed seems to ignore the fact that throughout the world the various chartered accountancy institutes are differentiated by a national designation".

As Robertson points out that the merged institute would be an "amalgam of accountants, not all of whom are in an everyday sense recognised as being chartered accountants".

Now if he can see that, why can't our Council?

Robertson suggests a new name for the merged body: "The Institute of Some Chartered Accountants and Public Finance Accountants".

Robertson has succintly highlighted the lack of thought and planning that has gone into the merger proposal.

It has already been fatally holed below the waterline by the absconding of CIMA, now we are faced with direct action and ridicule by ICAS.

The time has come to abandon the proposal, and to restructure Council in the manner that I proposed in an earlier article.

When a Freebie isn't a Freebie

As noted in my earlier post, it seems that the ICAEW Council has decided to spread the word about their merger proposal by sending out free copies of Accountancy in April.

That much would appear to be confirmed via the ICAEW website, see last paragraph of this link from the ICAEW website.

"The draft proposals for consolidation are available on ICAEW and CIPFA websites and have been sent to the members of both Institutes via Accountancy magazine (ICAEW members) and Spreadsheet (CIPFA members)."

However, what is not entirely clear is how much this act of philanthropy has cost us the members.

We can take an educated guess:

-125000 members

-Normal circulation of Accountancy approximately 50000

-That leaves 75000 people to receive a "freebie"

-Approximate unit cost £3.50 (including post and packing)

-Total cost £262K

-Less bulk purchase discount, say 20%, gives us a grand total of £210K

To my view that is a lot of money, just thrown down the drain by our Council.

I have written to both Accountancy, and the ICAEW asking for the exact cost.

Accountancy wrote back saying that they cannot comment, as and when I hear from the ICAEW I will post their response here.

The Costs Keep Rising

I draw your attention to the following post, made on the previous article, by Kamran:

"I live abroad and am yet to receive the April edition of Accountancy. The ICAEW is sending it to me anyway.

In fact, just to promote this silly merger, the ICAEW is sending a copy free of charge to each of its 125,000 members. Can you imagine the cost!

I haven't yet received April's Accountancy, so from what is said in the magazine, are there indications that this previously rejected ridiculous merger will go ahead?

If it does, then I will join a breakaway Welsh Institute or whatever alternatives are available..."

I find the above story about the free issue of Accountancy, if it is true, to be a pretty poor use of our subscription fees.

How much of our money is being spent by "our" Institute in trying to convince us of the merits of this unloved and unwanted proposal?

April Accountancy

The April edition of Accountancy devotes a large amount of space to the issue of the proposed merger.

It sets out the views of both the protagonists, and the views of people like me who are against the idea.

Whatever your viewpoint, I suggest that you read it.

Timetable Slippage

The timetable for the ICAEW putting the merger proposal to the members has slipped rather dramatically.

The original intention was for CIMA, CIPFA and ICAEW to put the proposals to their members in the spring of 2005.

Now with CIMA having dropped out, the ICAEW are working on bringing CIPFA into the fold, with a vote by Autumn 2005; whilst trying to persuade CIMA to come back.

The ICAEW, according to their website, expect to put the tripartite merger to the vote by 2006.

Quote from ICAEW website:

"On 24 February 2005, we jointly announced a two stage process to consolidation. The first stage involves the integration of CIPFA and the ICAEW on detailed terms to be put to our respective memberships no later than autumn 2005. The second stage is the revision of detailed proposals and the blueprint for a new constitution that address the specific needs of CIMA. CIPFA and the ICAEW will work with CIMA towards a mutually agreeable outcome. Subject to the success of the negotations (sic), proposals will be put to the memberships of all three bodies as soon as appropriate and no later than 2006."

That's quite a timetable slippage; not to mention the wasted time, effort and money.

AAT Shake Up

Accountancy Age reports that the Association of Accounting Technicians (AAT), a sister organisation of the ICAEW and other institutes, is facing a board shake-up as the ICAEW and CIPFA consider a two-way merger.

The full article can be read here.

Best In Class

As noted in other posts, I would like to use this website as a forum for ideas and suggestions as to how we may improve the ICAEW.

One area, in my opinion, that needs urgent reform is that of Council.

"The purpose of Council, as defined in the 2003 accounts, is to consider, review and approve the overall Institute Strategy and Strategic Plan, including the Institute budget. Council scrutinises policies, policy changes and budgets proposed by The Board and the Directorate Boards in support of the Strategy. It also reviews the activities and performance of the Directorate Boards.

It represents, and articulates, the views of members on all these matters and otherwise delegates the powers and authorities conferred on it by the Charter and bye-laws. Council members take decisions in the best interests of the Institute as a whole."

There are currently around 96 Council members. This, to my view, is excessive; it is, I suspect, a hindrance to effective and rapid decision making.

I believe that a leaner, more focused, decision making body would best serve the membership in the 21st century.

I propose that the current arrangement, whereby members are elected from 22 regional constituencies, be abolished and replaced with elected representatives from the Lines of Business (LOB) of the membership.

The LOB's would be:

-Tax
-IT
-Finance
-Audit (Practice)
-Audit (Internal)
-Students
-Retired

In order to keep the size of Council manageable, there would be no more than two posts available for each LOB. Thus an elected Council of no more than 14 members would be created.

In my view this would be a significant step forward to making the ICAEW "best in class" in the 21st century.

That at least is my view, I would welcome the views of others. Please feel free to disagree with my proposal, and make your own suggestions for reforming the ICAEW.

The Times

This is in the City Diary section of today's Times:

IN THE normally dull world of accountancy, rebellion stirs. The Institute of Chartered Accountants in England and Wales (ICAEW) is trying to ram through a merger with two other bodies, CIPFA, which specialises in the public sector, and CIMA, which represents management accountants.

The latter has already fallen by the wayside, and its arrival has had to be delayed. Members of the ICAEW are up in arms, in so far as an accountant can be said to express so strong an emotion. There is a website devoted to stopping the merger. There are calls for resignations, demands for a vote and talk of forming a breakaway institute.

The Welsh are particularly unruly. An informal poll suggests an 11-to-1 stand there against the merger. “When will the ICAEW council realise that this proposal is fatally holed below the water line?” asks one rebel. The ICAEW had no comment to make.

Breakaway Institute?

There have been some very interesting comments on the recent post "Welsh Rebellion" (see the comments section). Here are the two most recent posts:

"Why not have a poll to see how many ICAEW members would like to become members of ICAS or ACCA or a new Welsh Institute.

The consolidation outcome is certain though the timing is not. How many disgruntled ICAEW members want a new home unless Messrs A and D withdraw by say, 31st March.

Messrs Frost, Lawson, Wooller and the Ginger Group surely have enough combined clout and prospective financial support to test the strength of opinion."

"You guys should let us know if there is a address where by contribution is required to set up the new body. I believe a lot will join the new body!!!!"

The idea of forming a breakaway body, or joining another body, is to my view an action of "the last resort".

In my view the best way forward, at this stage, is for the ICAEW to be reformed from within. In the short term a number of actions need to be taken; to show that ICAEW is capable/willing to change, and listen to its members:

1 The office of president should be an elected office, whereby all the members have the opportunity to vote. The current situation whereby the office holder is appointed by Council is unsatisfactory.

2 The merger plans, and associated expenditure on road shows etc trying to convince us of its merits, should be stopped immediately.

3 The ICAEW should give us, the membership, a full accounting of the costs incurred to date of trying to persuade us to vote for this unwanted proposal.

4 The "board" of the ICAEW that pushed the proposal forward, despite the objections of the membership and of CIMA, should resign and submit themselves for re-election.

5 The ICAEW should review the size, structure and role of council.

The response of the ICAEW to these points will, I guess, determine how strongly the membership really feel about joining/starting up another body.

Please post you views, and tell your friends/colleagues about this site.

Welsh Rebellion

Accountancy Age report that a poll shows that Welsh accountants in practice are against the proposed institutes' merger.

Members Against Consolidation, a protest group of Welsh ICAEW members, has polled 400 practice accountants in Wales; it found that they were 11 to one against the current merger plans.

When will the ICAEW council realise that this proposal is fatally holed below the water line?