ICAEW Hire MORI

The ICAEW has written to all its members today, to tell us that has hired MORI to conduct research into why the consolidation vote failed.

Extract:

"Equally we need to understand why the minority who voted 'no' did so in order that we can regain your support for what we are trying to achieve as a professional body. Over the next few weeks we will be working with MORI on a short piece of member research which will examine why you voted as you did in order to help us with this analysis."

I wonder how much this research will cost, and why it is needed now that the merger issue has been finally put to rest?

Good money after bad!

Message To Editor Of Accountancy

December 2005 edition, Page 37 quote:

"..,while 65.7% of ICAEW members backed the (merger) proposal."

29% actually.

Get it right!

Chaos At The ICAEW

I read with interest today the story in Accountancy Age, concerning the delay in the new ICAEW syllabus.

The new syllabus was meant to have been implemented in 2006, yet will now be postponed until 2007.

The rumour, printed in Accountancy Age, is that the delay is due to staff turnover; rather than a coherent strategy.

The story is of particular interest to me because in September the ICAEW advertised for professionals, interested in acting as examiners for the new syllabus; the advertisement noted that it would go live in 2006. The work would be for a few days a year.

There were to be 12 modules; one of which, Ethics (a new subject), I applied for.

I take a particular interest in ethics and corporate governance, and feel that these areas in many companies need some serious attention. Ethics is something that should be of great importance to the ICAEW as well:

• The ethical image and reputation of the profession has been badly undermined by the media coverage of eg Enron, WorldCom, Andersens etc



• The ICAEW needs to publicly display to the world that it is committed to ethics and integrity



• Including Ethics as a specific subject in the examination syllabus is an ideal method to send a message to the media, and the world, that we take ethics seriously



• Not to include it in the syllabus is an opportunity wasted (to say the least)

I was invited for interview on 19th October, along with 24 other candidates who had applied for the other 11 papers. Prior to the interview I was sent the 5 page Ethics syllabus to read through, together with some other information and a training disc.

I had a one to one 20 minute interview, then a 45 minute panel interview. Seemingly I was the only person to specify Ethics as my first/only choice of paper.

I was told that I would hear by the end of the month, and that if chosen I would have to make a decision quickly; as work on the paper would start in November.

I received an email on the 1st of November which stated that since the interviews the ICAEW had rethought the approach to Ethics, and that there may well not be an assessment of the kind envisaged.

As such no Ethics exam team would be appointed.

I found the change of heart, in such a short space of time, to be surprising and odd at the time. Hardly indicative of a well thought through strategy, given the time and money spent in preparing the syllabus, advertising and interviewing candidates.

Changing the syllabus within the space of a fortnight, seemed to me as though the ICAEW was making up policy as it went along.

Clearly, in the light of today's report, there is chaos within the ICAEW. The result being that not only are the current members being let down, but those who are studying for qualification, and the industries in which they hope to serve, are being let down as well.

This is a very sorry state of affairs indeed.

CCAB

I see that the Consultative Committee of Accountancy Bodies (CCAB) has finally got its website back up and running.

As the site states:

"CCAB provides a forum in which matters affecting the profession as a whole can be discussed and co-ordinated, and enables the profession to speak with a unified voice to government."

So we needed a merger for why?

IFA Rumour

The printed version of Accountancy Age has printed a rumour today, that the ICAEW may be having talks with the Institute of Financial Accountants (IFA) about a possible merger/closer collaboration.

Dear Oh Dear!

Off topic, and on a lighter side, for the moment; I have just received an email from the ICAEW reminding me about the forthcoming CPD declaration that all ICAEW members have to sign.

The message starts as follows:

"Dear Dear..."

Not the most inspiring way to start this process, maybe they are still depressed after the "No" vote?

The Anstee Interview

Accounting Web has published an interesting "post merger" interview with Eric Anstee the CEO of the ICAEW.

It seems that, judging by the article, the ICAEW have succumbed to "Ivory Tower Syndrome".

I have a number of comments relating to the points the he makes, and have countered extracts of his comments (in italics) with my own thoughts:

"I personally am at a loss to understand why those 19,000 people voted the way that they did and we need to find that out."

If he had bothered to visit this site, at any time over the past year, he might have had a few clues as to why people voted down the merger proposal.

"We will undertake specific survey work using independent surveyors - probably MORI who we used back in June."

More expense for us the membership, yet for what purpose?

"I believe that what you have to do is look at what the vote itself tells you, and that is that nearly two thirds want to go forward and one third don't and therefore two thirds are the majority."

Which part of the word "No" don't the ICAEW understand? A mere 29% of the membership voted in favour, the pro merger lobby lost...PERIOD!

"We responded to all queries that were anti the integration proposal."

Bullshit!

I wrote at least 6 emails, and used the special feedback box on the ICAEW website to send them. I even have a receipt for at least one of them.

Yet I received no response.

"My problem here is that the minority of 19,000 are dictating to the majority, so we will have to look at that constitutional impact."

If you lose, then change the rules!

"However, we would keep ourselves informed as to what the market place wants. We would have to adjust the qualification to meet the market needs."

It seems that I was right, the ICAEW would have abandoned the dual qualification for ICAEW and CIPFA members had the merger vote gone through.

"That is my big disappointment that a lot of what we are doing has not been understood."

The fault for that lies with the ICAEW.

Accept the fact that you lost, and move on.

Letter To Council

For your information I reproduce the full text of a letter sent by Bruce Lawson to all members of the ICAEW council.

"Dear Member of Council,

A miss is as good as a mile – No means No!

So the Institute gambled and lost – just 29% voted for a merger – 15% voted against and 56% don’t care – hardly a recipe for a re-run. Taking the ICAEW cost of £1.42 million, the 37,004 Yes votes cost £38 each.

The No camp, with two websites and less than a £5,000 spend, was successful because ICAEW strategy was inherently wrong. Try again, and with a £38 a head budget for the Nos (£734,000) you might not even get 50% of the vote and become even more embarrassed.

Your Chief Executive compares the vote with a parliamentary mandate – should a 29% vote be permitted to run the country – does the Council want to compare themselves with spinning politicians and the apathy that they expensively create. Hopefully not after the excellent leadership ICAEW has given until recently.

The debate has had the benefit of educating members. I did not know ICAEW had 500 staff whereas ICAS have 140. A lady at the EGM, who spoke eagerly in favour of the merger, was amazed to know there were 95 Council members.

So where next?

Surely the strategy must focus on falling income. Increased regulation, Practice Assurance, CPD requirements, etc. mean members will not fade away as in the past, but stop and resign to save paying expensive subscriptions. We might like to work longer, but will stress levels permit?

A recent Robert Half report shows (AA 27th October) 25% of a 2,232 sample don't want to work past 55. So face it, budget for a 20% fall in income in real terms over the next five years (think of the 1946 baby boomers) and cut your cloth accordingly.

A truly independent panel of ICAEW members with a budget of say £200K – 10% of what has recently been wasted – should review all ICAEW activities with a view to cutting costs and staff by say one-fifth, and Council members by at least half.

Dissident members will (and should) from now on, resist any subscription increase of more than general inflation – say 3% p.a. ICAEW must live within its means – members have to.

We note gratefully that ICAEW "work hard to provide value for money for our members and realize future cost savings" (page 8, Accountancy – November 2005).

ICAEW should concentrate on training, discipline and a dissemination of technical information and advice on ethics. Sponsoring major symposiums in Washington … what utter drivel.

Council should also abandon the collective responsibility secrecy, which MAC have written evidence of existing and find so disturbing. ICAEW must be utterly transparent in its dealings and an unwieldy Council should not be led by the Executive. What was wrong with the previous system anyway?

Your Chief Executive sees the vote as a mandate to continue to discuss consolidation. He and the Council would be wrong to pursue that strategy. Say you were wrong; budget for lower numbers and the inevitable recession. Cut costs and fanciful delusions of grandeur and then maybe you will get 71% of the members, who voted No or don’t care, and perhaps some of the Yes voters, who only reluctantly voted on your side again.

Ignore these warning signs and the Institute could become ungovernable.

On a lighter note, and in football parlance, you lost, the Nos won; accept defeat as graciously as your current President. Both sides knew the rules. Complaining to the referee after the match achieves very little … and what of the manager’s position?..

We shall see what happens next.

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

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.

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

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

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!

£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

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.

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.

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.

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)

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.

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.

Vote Now

You can vote online against the proposed ICAEW merger with CIPFA here:

Online voting form

Please make sure that you vote before 23rd October.

I would also be very grateful if you could point your colleagues and friends, from the ICAEW, in the direction of this site.

Thanks for your support.

Ken

AccMan Pro Article

My thanks to AccMan Pro for the write up yesterday.

Ken

Reasons To Vote Against The ICAEW Merger Proposal

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

ICAEW Merger Resolution

Those members of the ICAEW who wish to take an early look at the merger resolution should visit CIPFA's site, where they publish it in full.

The relevant section of the site can be accessed via this link CIPFA.

ICAS Receives Support

ICAS received support this week, from the Indian and Australian institutes, in its fight to preserve its name.

The institutes have backed ICAS's insistence that there is an "unbroken global convention that chartered institutes use their geographical designation".

ICAS has already lodged its objections with the Privy Council, and has not ruled out legal action.

Des Hudson, ICAS chief executive, said:

"It is now very clear that this proposal from ICAEW is demonstrably unpopular across the world's chartered accountancy institutes. The argument in opposition to the change is totally consistent from ICAS, our Australian colleagues and now our Indian colleagues."

A Poor Choice of Adviser

We are now approaching the last few weeks of the merger campaign, being mounted by the ICAEW.

As I have noted in an earlier post, the ICAEW are hosting a series of roadshows and mounting a publicity campaign; under the direction of their PR firm Media Strategy (perversely enough paid for by us, the membership), brought in to swing the vote of the membership in the favour of the ICAEW.

Unfortunately, those of us who oppose the merger do not have the resources to be able to afford to hire Media Strategy (Media Strategy list the ICAEW as a client); even though we will, via our subscriptions, be paying for Media Strategy's involvement.

I am therefore very grateful to an anonymous visitor to this site who has drawn my attention to the following Early Day Motion (EDM), filed on the 13th of July 2005, by Paul Flynn MP.

The EDM (number 581) concerns the activities of Media Strategy, and urges:

"..all Right honourable and honourable Members to have no contact with the clients of Media Strategy until this matter is resolved; and believes that it is inappropriate for public sector organisations such as the Audit Commission, the Police Federation, Southwark Council, Westminster City Council, The Royal Parks, The Environment Agency and others to retain the services of a company that behaves in this manner.."

It seems that Media Strategy breached the Code of Practice of the Association of Professional Political Consultants (Lord O'Neill had joined their advisory board) and, as a consequence, resigned its membership of that body rather than face an investigation.

The Association of Professional Political Consultants issued a public statement about the affair, on the 11th of July 2005.

Here is an extract:

"..It was agreed by the APPC Management Committee at its meeting on 8th July that there was sufficient prima facie evidence to show that Media Strategy had breached Clause 8 of the APPC Code of Conduct by employing Lord O'Neill to justify referring the issue to our Professional Practices Panel. Media Strategy's early resignation from the APPC means that this course of action is not open to the Association (resignation is not, of course, permitted after a complaint has been referred to the Panel).

The APPC Management Committee was also disappointed by Media Strategy's readiness and happiness to resign from the APPC and therefore its' Code of Conduct. The Committee felt that Media Strategy had dismissed the seriousness of the complaints made against them, and the importance of the Code of Conduct to the industry as a whole. This is unwelcome and inconsistent with the commitment and compliance of APPC member companies to the Code of Conduct and its underlying principles. The Committee felt it inappropriate for any member company to treat membership of the APPC in a similar vein whereby a member would rather resign than sort out the problem or comply with the Code..."

The association of the ICAEW with a body whose reputation is being questioned in this way, does our brand value and image no good whatsoever; it also brings into question the judgement of the ICAEW, in using the services of Media Strategy.

The ICAEW continue to mishandle the merger issue, and their judgement is questionable.

Please vote against the merger.

I reproduce the full text of the EDM below:

EDM 581

ASSOCIATION OF PROFESSIONAL POLITICAL CONSULTANTS AND MEDIA STRATEGY

13.07.2005

Flynn, Paul

That this House notes with profound concern that the public affairs consultancy Media Strategy, which represents a wide range of public sector and commercial organisations, has been forced to resign its membership of the Association of Professional Political Consultants after a flagrant breach of the Association's Code of Practice; further notes that the breach involved a contravention of Clause 8 of the Code, which prevents the employment of any honourable Member or Peer, or the payment of money or other awards to such honourable Members; is shocked that Media Strategy's response to the investigation of this complaint was to resign from the Association to prevent a formal inquiry rather than to put its house in order; is appalled at the flippant comment of the Media Strategy Director, Charles Lewington, that although Lord O'Neill was indeed to be paid for services to the agency 'he won't be doing much given the money'; welcomes the statement by the Association that the appointment compromised the profession's integrity; urges all Right honourable and honourable Members to have no contact with the clients of Media Strategy until this matter is resolved; and believes that it is inappropriate for public sector organisations such as the Audit Commission, the Police Federation, Southwark Council, Westminster City Council, The Royal Parks, The Environment Agency and others to retain the services of a company that behaves in this manner.

Source Parliamentary Information Management Services

Reasons To Vote No

We are now approaching the last few weeks of the merger campaign, being mounted by the ICAEW.

They are hosting a series of roadshows and mounting a publicity campaign, under the direction of their PR firm Media Strategy (perversely enough paid for by us, the membership), designed to swing the vote of the membership in their favour.

Unfortunately, those of us who oppose the merger do not have the resources to be able to afford to hire Media Strategy; even though we will, via our subscriptions, be paying for Media Strategy's involvement.

Therefore I ask you to help me out in the last few weeks of the campaign, by emailing this post to as many members of the ICAEW and of the media that you know.

Please can you ask them to

-Visit this site

-Forward this post to their friends and colleagues in the ICAEW

-And, most importantly of all, vote against the merger

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

Thanks for your help and support.

Ken Frost FCA

www.stopthemerger.org

D Day

The deadline for casting your vote on the merger proposal is the 25th of October.

Please remember to vote, and please ensure that you encourage/motivate your fellow ICAEW members to visit this site and to vote against the merger.

The ICAEW need 67% of those who vote to vote in favour, if the motion is to pass.

Remember, as the ICAEW says:

"Our rigorous integrated education and training programme produces chartered accountants, auditors and business advisers, who are valued above all others in practice, industry, commerce and the public sector, in the UK and worldwide.

..The qualification will retain all the features that have made it the premier accountancy qualification in the world"

Let us ensure that our qualification, and brand, retains this premier position.

Thank you.

Ken

ICAEW Further Antagonises ICAS

The Herald reports that, in a move guaranteed to further antagonise the one body that we should be discussing merging with, Carl Bayley the Chairman of the ICAEW has stated that the merged institute will enjoy a huge rise in influence in Scottish affairs.

He claims that the removal of the "England and Wales" part of the name will eliminate the prejudice shown by the Scots to the ICAEW, which he says has had little influence to date in Scotland.

Des Hudson, chief executive of ICAS, is not impressed:

"The ICAEW is well aware of the concerns that ICAS has on their proposal to change their name to 'The Institute of Chartered Accountants'. The global convention for chartered institutes is, after all, to use the national designation in their names".

Media Strategy

I understand that the ICAEW are using the services of Media Strategy, a PR firm based in London, to help them sway the membership in favour of the merger.

Media Strategy describe themselves, on their website, as being:

"London's fastest growing agency, specialising in corporate communications and government relations..."

I wonder what their advice to the ICAEW will be, and how much it will cost us (the membership)?

CIPFA's E-Newsletter

Visit CIPFA's August E-Newsletter, and read the title of their article about the proposed "integration".

Notice anything wrong?

Kudos to Accountancy Age for spotting this first.

Call For Resignation

Bruce Lawson, who is leading the Welsh campaign against the merger, communicated the results of his straw poll to Ian Morris (President of the ICAEW) in a meeting last Thursday.

Quote:

"The second straw poll we have taken, which I will communicate to Accountancy magazine, has indicated that from 300 practising members, 47 were against, 2 were in favour, 8 were undecided and the rest did not reply. I think it would be unwise to assume that the non-replies mean that they are in favour of the 'consolidation proposals'".

He notes on his website that if the merger proposal is not voted through, then the CEO of the ICAEW should resign.

To read more, visit Bruce's site, and scroll down to the bottom.

Merge Like With Like

My thanks to the anonymous person, calling himself/herself XYZ, who sent me the following message today (exact quote):

"It is narrow minded to resist merger of icaew,cima and other accounting bodies".

I normally respond privately to private messages. However, no email address was provided.

I would note that I am not against the merger of "like with like". In a recent interview (featured on this site), published in Accounting & Business I am quoted as being in favour of discussing a merger with ICAS:

"Ken Frost, ICAEW member, who has set up a website dedicated to rallying members to stop the merger, says he isn't against consolidation.

'I would be delighted if we could enter into discussions with ICAS. We have to merge like with like,' says Frost."

However, as repeated ad nauseam, I believe that the merger of CIPFA will dilute our brand.

We, if we wish to merge, must only merge "like with like"

Featured

My thanks to Accounting and Finance 365 for featuring this site in the Feature section of Editor's Corner.

See Accounting and Finance 365

CIPFA Regional Meetings

CIPFA is inviting their members and students to give their views on the proposed consolidation with ICAEW, at a series of meetings around the country.

The President of CIPFA, Vice President or immediate Past President or a representative will attend these events.

The announcement says that the agenda is deliberately unstructured to encourage a dialogue.

All meetings are hosted by the region in which the meeting takes place.

There is one important point that we should not forget, namely that the membership of CIPFA also have to approve of the merger as well as the membership of the ICAEW.

It would be highly embarrassing for the ICAEW if CIPFA rejected the merger.

One other point that caught my eye on the CIPFA website, is the fact that the CIMA logo is still displayed in the header.

CIMA, you will recall, have pulled out of the current merger plans. Is the inclusion of their logo on the CIPFA site merely an oversight, or has no one told CIPFA that CIMA have pulled out?

The timetable can be viewed via this link Regional Meetings.

Audit Commission Criticises Quality of Public Sector Accounts

The Audit Commission has identified that councils do not take the process of preparing, or publishing, their accounts seriously enough.

The Commission noted that 25% of submitted accounts have to be resubmitted, because of significant errors.

The Commission highlighted "significant" departures from UK GAAP, the Commission is also concerned at the delay in bringing the local government systems into line with UK standards.

Competition or Merger?

There is a good article on the Accounting and Business website, outlining the arguments for and against the merger proposals.

You can access the article via this link Accounting & Business.

ICAEW Shuns ICAS

According to Accountancy (page 6 July 2005) the ICAEW seems to be being a tad disingenuous when it says that it is in "continuous dialogue" with ICAS, over the controversial proposed name of the new merged body.

Des Hudson, CEO of ICAS, is quoted as saying:

"we reiterate that we are anxious to sit down and enter into proper negotiations in a good spirit to try and find a solution. And we're ready to do that any time, any place".

In other words, despite what they claim, the ICAEW are not talking to ICAS.

Why?

The Hypothetical Merger

Ian Christison, the new president of CIMA, is quoted in Accountancy (page 136 July 2005) as saying a merger with the ICAEW is "hypothetical".

He goes on to say that he is "part of a team which is working to advance the CIMA brand and reputation of members".

Doesn't sound like he is that supportive of the idea of a merger.

ACCA Believe Merger Plans Flawed

Allen Blewitt, chief executive of the Association of Chartered Certified Accountants (ACCA) the world’s largest accountancy organisation outside China, has criticised the ICAEW merger plans.

He is quoted in today's Times as saying:

"The model for merging accountancy bodies is probably flawed..We educated accountants to be sceptical and conservative, yet you are asking people to forget years of entrenched mindsets."

He believes that institutes should collaborate first, then worry about whether or not to merge.

Row Between ICAS and ICAEW Deepens

Des Hudson's (Chief Executive of ICAS) article about the proposed ICAEW merger, which is published today in Accountancy Age, has raised the hackles of the ICAEW.

In the article Des Hudson says that the merger is based on "unproven beliefs", and that a "monolithic institute" would not be more effective.

He goes on to say that ICAS sees considerable benefit in an "exclusive and unremitting focus on chartered accountants".

Eric Anstee is reportedly so incensed, by what he calls "spoiling tactics", that he has threatened to "realign" the ICAEW's funding of CCAB; he may even withdraw ICAEW from CCAB.

12% Vote For Subs Hike

In a staggering display of apathy, a mere 12% (15000) of the membership of the ICAEW bothered to vote on the proposal for the 9% subscriptions hike.

63.7% of those who could be bothered to vote, voted in favour of increasing the basic member subscription by 9%, to £252 from £231.

I hope that the 111000 members, who could not be bothered to vote, feel thoroughly ashamed of themselves.

If this level of apathy is repeated in the merger vote in October, the ICAEW may well win the vote; even though the majority of the membership will not have made their voices heard.

I hope, that more of the membership votes (even if it is in favour of the merger) in October.

Soap Box

My thanks to Des Hudson, the CEO of ICAS, who emailed me last night; and pointed me in the direction of his article, that appeared yesterday in the Soap Box section of The Herald.

The article is written in response to the one a week earlier, featured on this site, in which Eric Anstee discusses the merger; and makes a play for ICAS merging with the ICAEW.

He points out that Anstee's article was inaccurate; in as much as the Scottish Institute is the oldest when compared to the ICAEW.

150 years old, as opposed to 125 years old, to be precise.

The article goes on to point out that ICAS believes that competition is good for the profession, I tend to agree.

Additionally, it notes that the Consultative Committee of Accounting Bodies is the appropriate vehicle for the profession to speak with one voice.

He states unequivocally that ICAS has no current intention to merge, noting that there are far more important issues to be focusing on.

He also notes that the takeover of CIPFA would:

"..be an amalgam of accountants not all of whom are, in an everyday sense, recognised as being chartered accountants. The mixture of qualifications the new body would embrace would mean that ICAS would be the only one in the UK that could accurately claim to be called The Institute of Chartered Accountants".

In other words, as I have said, the takeover of CIPFA will dilute the brand.

Now let us be done with this nonsensical proposal and concentrate on more pressing issues, such as cutting Council down to no more than 12 people.

Scottish Institute To Fight

The change of president of the Institute of Chartered Accountants of Scotland (ICAS) has done nothing to dampen their ardour, in respect of fighting the proposal by the ICAEW to name the merged body "The Institute of Chartered Accountants".

New President Mike Hathorn took up office at the end of April this year.

Des Hudson, the CEO of ICAS, said that ICAS will oppose plans by the combined English-based organisations to adopt the title Institute of Chartered Accountants.

He said that there had been little attempt by the English bodies to discuss the issue.

He is quoted, in an article in The Scotsman, as saying:

"We would be happy to sit down with them and find a sensible solution, but as yet there have been no negotiations".

As I have noted many times, it seems that the ICAEW have not though the merger proposal through.

I don't think that ICAS need worry too much, the merger proposals do not stand a chance of being approved by the membership of the ICAEW.

Anstee Plea To Scots

Eric Anstee has made a plea to the Scots, in a recent article in The Herald.

He seems, in a rather indirect manner, to be asking the Scots to come on board with the merger proposals. This, in my view, should have been done before the merger plans were put before the members of the ICAEW.

I see he uses my phrase about "brand dilution". I am pleased that he reads, and takes notice, of what is being said on this site.

That being the case could someone from the ICAEW please respond to the pile of emails that I have sent them, over the past few weeks, asking them about the costs of the pro merger campaign?

CIMA Don't Want To Merge

Accountancy Age reported, earlier this month, that both the ICAEW and CIPFA are struggling to gain support for their merger vote in October. Additionally, they are having trouble convincing CIMA about the merits of the plans.

CIMA announced in May that it would still consider joining, if its new proposals were met.

There's the rub!

The sticking points include the higher fees for CIMA members, and concerns about the merged Institute containing an ICAEW dominated charter and council.

Roland Kaye, CIMA president, is quoted as saying that the merger proposals "did not yet recognise the distinctiveness of CIMA".

In other words, CIMA will only merge if they are treated as unique; which of course entirely negates the rationale for the merger.

As noted many times before, this merger proposal is being made up as it goes along.

Council have failed us, it is time that they were removed and restructured.

My Webcast

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





You can view a poor quality, in terms of picture/sound, dial up version via this link dial up version ICAEW Video 2MB.

Those of you with a little more patience should click this link for a far better quality version ICAEW Video 10MB.

I also have a very high quality 22MB version, which I can post to you upon request.

Subscription Hike Vote

I hope that people will remember to vote against the 9% hike in subscriptions being foisted on us by Council?

The AGM is on the 7th of June.

Subscription Hike

The ICAEW has stated that it wishes to impose a 9% hike in subscriptions for 2006, upon the membership.

They claim that this will go towards the costs of maintaining the quality of the qualification.

Yet they also claim that the merger will bring in extra revenue.

Which claim is to be believed?

Maybe some money could have been saved by not sending out free editions of Accountancy in April?

I have written to the ICAEW four times, asking them how much this little PR stunt cost, yet they have not replied.

May I ask for your help in eliciting a response from them?

Please write to them asking for a figure, there is a link in the menu bar of this site to enable you to do this via email.

Thanks.

The Webcast

The ICAEW has just released a webcast, outlining their rationale for the takeover of CIPFA, it can be viewed via this link webcast.

I would like to address the issues raised in the webcast:

Increased Influence

The ICAEW state that the merged body will bring about increased influence and provide a stronger voice, with regulatory bodies, for the membership.

However, the proposal to takeover CIPFA will add only another 13500 members to our numbers, that represents a mere 11% of our current membership. An 11% increase in the size of the ICAEW will not dramatically alter the status quo, or increase our standing within the financial community.

Sir John Bourn, Chairman of the Professional Oversight Board for Accountancy and a member of the Financial Reporting Council, is quoted in April’s Accountancy (p 41) as saying:

"existence of different professional bodies servicing either different geographical or technical needs has supported the strength and depth of the UK profession.."

Expanded Expertise

The ICAEW argue that, by including those with expertise in the public services, the takeover of CIPFA will add value to the ICAEW.

At first sight, this may seem to be fair comment; adding another body of people with different skill sets and experiences can, in theory, add value. However, it is not at all clear that the two bodies are compatible.

The private and public sectors are dissimilar, it is doubtful that the combination of CIPFA and ICAEW will give rise to any synergies

Prestige Preserved

The ICAEW claim that they will maintain a dual qualification approach, and that ICAEW and CIPFA designatory letters will remain. We are reassured that the two groups will be equal.

Quote:

"There will be no change to the separate routes to qualification for existing students of the ICAEW and CIPFA. Any future changes to these arrangements will be subject to a special majority of the new Council and only in response to the needs of members and the market."

I am afraid that this promise is no more than a short term "political sop", designed to allay the fears of the membership.

How can both parties be equal, if they have not had the same training?

At some stage the question of designatory letters, and a common training programme will have to be addressed.

To fail to address this issue will leave a two tier membership in place. A two tier membership will be both confusing to the membership, and the outside world, and impractical to administer.

There will have to be one unified brand.

Those that claim that Council will not renege on their promise to maintain the dual qualification approach should read the proposed constitution of the new body.

Quote:

"Any future changes to these arrangements will be subject to a special majority of the new Council and only in response to the needs of members and the market."

I would also remind you that a vote was passed a few years ago, to reduce the membership of Council from approximately 90 to under 40.

Council have ignored that vote, and they will ignore their promise re the dual qualification approach as well.

Enhanced Resources

Much is made of the acquisition by the ICAEW of the CIPFA regional training facilities. If these facilities are really so desperately needed, would it not have been simpler and cheaper to outsource these from a third party rather than to takeover another professional body?

The Name

The ICAEW state that they are already discussing the proposed new name of the new body, the Institute of Chartered Accountants, with the Privy Council. Have they forgotten, or are they ignoring, the fact that ICAS have promised to fight this perceived "infringement" of their trademark?

See Ian Robertson’s, President of ICAS, letter in May’s Accountancy (p 22).

This oversight shows that the proposal has not been properly thought through.

Revenue

The ICAEW emphasise the revenue enhancing features of the takeover. Yet if this is one of the key motivations for the takeover, why have the larger ACCA not been invited to join?

I note that the ICAEW are pressing for a 9% rise in subscriptions for 2006, does this need to raise subs not contradict their argument as to the beneficial revenue effects of the merger?

Demographics

I note that up until now the ICAEW has made much of the demographic issues facing us, ie the declining and aging membership; they have stated, when CIMA was also expected to join, that a merger would address these issues.

Now the issue of demographics has been dropped.

Council

The ICAEW propose increasing the size of Council from its current unwieldy level of around 90, to 115.

This proposal is absurd.

I believe that if the ICAEW is to successfully address, and respond to, the challenges facing it in the 21st century then cutting the size of Council should be its number one priority.

"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 90 or more Council members. This, to my view, is excessive; it is 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.

A motion to reduce the number of Council members to below 40 was raised, and indeed passed, a number of years ago.

Yet it has been ignored by Council!

Questions that need to be addressed

• Why have ACCA and ICAS not been invited to join the merger?



• How much will the merger cost if it goes ahead?



• How much has been spent so far, eg the free edition of April’s Accountancy, in trying to persuade the members as to the merits of the proposal?



• The ICAEW is meant to represent the interests of its members, yet it is ignoring the membership; why?

CIMA Still Not Convinced

Roland Kaye, President of CIMA, is quoted as saying that currently an agreement has "not been reached" that meets CIMA's "requirements" for a "tri-partite consolidation".

Quote:

"Discussions continue with the aim of agreeing a joint way forward. At the March meeting of CIMA's council, a set of working principles was agreed in order that a successful consolidation could be achieved."

Could someone tell me what these requirements are?

It will be useful to know what CIMA thinks is wrong with the merger plans.

Article in eFinancial Careers

There is an article about the merger on the eFinancial Careers website.

It mentions this site, and is skeptical about the rationale for the merger and the likelihood of it succeeding.

The Silence Is Deafening

I emailed the ICAEW on the 10th of April asking them how much the free editions of Accountancy, that we paid for, cost us.

I have yet to receive a reply.

Therefore I sent them this reminder today:

"I wrote to you over a week ago, asking how much it cost to send the membership a free copy of Accountancy.

I have not received a reply.

Please advise when I may expect one.

Many thanks.

Kind regards

Ken Frost"

If I receive a response I will post it here.

Reform Or Die

The following was sent to Accountancy, and a number of other media organisations, today:

"It is clear from the responses that I am receiving, in respect of the proposed merger of the ICAEW and other bodies, that many members of the ICAEW are not happy with the merger proposal and are very unhappy with the current structure of the ICAEW.

One area 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 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.

I have been in discussions with Dr Jeff Wooller, of the Ginger Group, on this matter; he advises me that a motion to reduce the number of Council members was raised, and indeed passed, a number of years ago.

Yet it has been ignored by Council!

Question: the ICAEW is meant to represent the interests of its members, yet it is happily ignoring the membership; why?

I would appreciate it if you could publish the above article in Accountancy, as it is the only way to elicit a response from Council.

Kind regards

Ken Frost"

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?

ICAS Doubles in Size

There is a splendidly robust article in today's Herald, trumpeting the success of the Scottish Institute of Chartered Accountants (ICAS) in doubling its student membership in the last six years.

The article contrasts the success of ICAS with the failure of the ICAEW to respond to the needs of multinantionals, and its decline in student numbers.

Seemingly the majority of the rise in ICAS number is down to the fact that Ernst and Young put all of its students through the Scottish system five years ago. PWC and KPMG also followed suit with some of their students.

Des Hudson, the Scottish body's chief executive, is quoted as saying:

"The situation will continue as long as we remain of value and relevance (to the firms). But we don't expect it as a God-given right.."

Hudson then went on to say that ICAS is still waiting to hear more about the proposed merger between the ICAEW, the Chartered Institute of Management Accountants and the Chartered Institute of Public Finance and Accountancy.

Seemingly ICAS is determined to thwart the plan to call the super-institute "The Institute of Chartered Accountants".

So there you have it, the merger proposal is merely an attempt to hide the fact that the fall in membership of the ICAEW is down to its lack of flexibility.

The merger proposal is a red herring, and should be dismissed ASAP.

If people feel that the ICAEW is relevant they will join.

CIMA Pulls Out

Now we know why CIMA have not been answering my enquiries about the delay in their council's vote on the proposed merger.

They have pulled out.

Accountancy Age reports that ICAEW and CIPFA may merge by themselves, leaving CIMA to join at a later date.

The ICAEW and CIPFA still seem happy to fudge this ill conceived proposal, by now trying to push forward with a two tier merge.

Frankly this is now verging on the farcical.

Let us be done with this nonsense, and just go ahead with a one tier merger; ie don't merge!

The pull out of CIMA was obvious in December, when they voted against the proposal.

Yet the ICAEW chose to hold their own vote, after CIMA's rejection, and press on regardless.

My questions to the ICAEW are as follows:

1 Why did you hold a vote in December, when you knew that CIMA had rejected the proposal?

2 How much of our money have you spent, to date, on trying to persuade us to support this unwanted and unloved proposal?

3 Why are you trying to continue to push this unwanted proposal forward, when it is obvious that it is holed below the water line?

4 Who will be resigning in the ICAEW over this shambles?

CIMA Sleeps

I sent the following query (see below) about the merger to CIMA some 12 days ago, they have not replied.

I sent them a reminder again today.

Message:

"..There seems to be some confusion about the timing of the CIMA council vote on the merger.

Original reports indicated that the council meeting, and vote, would take place on 4 Feb.

However, now reports state that the vote will occur on 1 March.

Please can you clarify why the date of the vote has moved?.."

Maybe I will get a response before they vote?

Straw Poll

Self Assessment are conducting a straw poll of ICAEW members, who work in Wales, of their views on the merger proposal.

Those of you who live in Wales may care to take part, visit Self Assessment for details.

No Response

I sent the following note to CIMA on 10 February:

"..There seems to be some confusion about the timing of the CIMA council vote on the merger.

Original reports indicated that the council meeting, and vote, would take place on 4 Feb.

However, now reports state that the vote will occur on 1 March.

Please can you clarify why the date of the vote has moved?.."

However, oddly enough, I have yet to receive a response.

I know that CIMA regularly visit this site, so please can you take note of my question and come back to me on it.

Many thanks.

Shooting Itself in The Foot

Following a summit of leading international accountancy bodies in London, on Thursday, the Institute of Chartered Accountants in England & Wales (ICAEW) urged large businesses to employ professional accountants as finance directors.

A laudable aim.

Yet is not the ICAEW shooting itself in the foot, by asking that its membership vote for a merger that undermines the very value of the qualification?

Delayed Vote?

Last week I posted that CIMA's council were due to vote again on the proposed merger between ICAEW, CIMA and CIPFA on 4th February.

I subsequently withdrew that post, and issued an apology, as it seemed that I had been given the wrong date; the date of the vote is now being reported as the 1st of March.

However, I see from an article posted on 6th January 2005 in Accountancy Age, that a vote had indeed been planned for early February.

Quote:

"..All hope is now focused on renewed discussions to forge a replacement plan, but the leaders of the 'merger three' have only a small window of opportunity before the next council meetings scheduled for early February...".

It seems that the CIMA vote may have been postponed.

Can someone shed some light on this please?

ICAS Unhappy

The Herald reports today that ICAS (The Scottish Institute) are unhappy at the proposed name of the "super institute".

In fact, they are so unhappy that they have voiced their concerns about the preferred name for the new body, "The Institute of Chartered Accountants", both to the Privy Council and all three merger partners.

ICAS rather pithily remark that even if they were invited to join, they wouldn't.

Apologies

I must apologise for jumping the gun in earlier posts, in respect of saying that the CIMA merger vote was held on the 4th.

It seems that my source for this information was wrong, CIMA will in fact hold their vote on 1 March.

The FT

I am pleased to see that this site gets a mention in the FT today, you can read the article here FT.

However, I am not so sure that I am happy to be a called a "bean counter"!

Isn't it about time that we cast off this "fusty, dusty" tired old image?

Members Still Against Merger

Accountancy Age report that members of the ICAEW, CIMA and CIPFA are still against the proposed merger.

Why am I not surprised at these findings?

Why is the ICAEW Council still wasting their time and, more importantly, our money on this dead dodo of a proposal?

Democracy in The ICAEW

The merger proposal, put forward by the ICAEW, has at least had one beneficial outcome for the membership.

It gives us the chance to think about the structure and organisation of the ICAEW, and the way forward for the Institute as a whole.

One aspect that seems to have received little attention from the members, in the past, is the annual election of the President of the ICAEW.

The incumbent is currently elected by the Council; the members, for some mysterious reason, do not a get a say.

Now here's a radical idea; why not allow the members to nominate, and vote for the President in the future?

Views anyone?

Have We Already Merged?

There is an interesting public difference of opinion being aired on accountingweb, between Jeff Wooller and the ICAEW.

Nothing new there, you may say.

However, the issue that JW raises is relevant to the merger plans.

It seems that the director of training and education, Brain Chiplin, departed in November due to ill health.

Now the odd thing here is that this fact was only made public, when JW raised it in December.

The fact that there is no permanent replacement in the role yet is, according to JW, down to CIMA; who, he alleges, are annoyed at not being consulted over the advertisements for the post.

Now, if JW is correct, this means that CIMA already seem to have a say in ICAEW policy; this despite the fact that the members of the ICAEW have not yet voted against the merger plan.

I would be very pleased to hear from anyone who can confirm, or deny, this story. It is less than satisfactory to find out that we are being "steamrollered" into a merger, by giving outside bodies a say in ICAEW policy.

Questions For The Institute

I have a few questions for the ICAEW, in respect of the merger:

1 How much is the merger expected to cost, if it gets the green light?

2 How much of the members' money has been spent, and will be spent, on trying to persuade us to support this ill conceived proposal?

3 How was the CEO of the ICAEW able to persuade the Council to approve the
merger proposals, given the fact that he knew that CIMA had in effect rejected it?

4 Are there going to be two Councils, eg ICAEW Council and Super Institute Council?

5 What is the Institute's plan "B" for going forward, when the merger proposal is roundly rejected by the membership?

I know that the ICAEW in Milton Keynes regularly read this site, and would therefore be grateful if they could post the answers to these questions here.

Many thanks.

Harmonisation

The big eight European countries are considering proposals to harmonise their national accountancy qualifications.

This would create a common core of content, which would enable greater freedom of movement for qualified accountants across borders.

Accountancy Age lists the following countries and institutes as participating in the project:

-France, Ordre des Experts-Comptables (OEC)
-Germany, Institut der Wirtschaftsprfer (IDW) and Wirtschaftsprferkammer (WPK)
-Ireland, Institute of Chartered Accountants in Ireland (ICAI)
-Italy, Consiglio Nazionale dei Dottori Commercialisti (CNDC)
-The Netherlands, Koninklijk Nederlands Instituut van Registeraccountants (NIVRA)
-England, Institute of Chartered Accountants in England and Wales (ICAEW)
-Scotland, Institute of Chartered Accountants of Scotland (ICAS)

This harmonisation process further undermines the logic of the "backward" step of merging with CIMA and CIPFA.