Monday, September 26, 2005

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


  1. Ian Morris, President ICAEW, wrote thus;

    In particular integration will deliver:

    * increased influence with government and standard setters nationally and internationally

    MFB says, since when did Government ministers or departments take much notice of any Accountancy Body? The International bit is a joke. What is the CCAB, IFAC etc etc for?

    * more resource with which to provide representation and support to members

    MFB says, what is the point in having more resource if the existing level of representation is zero? Council numbers remain high because member votes were previously ignored; and serious support went out of the door years ago.

    * expertise across the public services to add to our existing strengths in business and practice enabling us to speak with real authority across the whole economy

    MFB says, only CIPFA qualified members will comment on any area of expertise only they may have. But surely they do that now? Use the CCAB.

    * year on year cost savings of £4m after two years which will be invested on behalf of members

    MFB says, does the President know the meaning of "year on year" and does he mean invested or spent prodigally as has been the case with the merger costs? How much are the actual and estimated merger costs? How many staff will go from each institute and which particular buildings will be redundant?

    MFB further says, of the 13,534 CIPFA members at 31st December 2004 2,950 were retired and 8,635 were in public services (CIPFA do not say they were in the service of the public). What is the point? Eric Anstee and the ICAEW Council have done more damage than will be repaired in a generation or two? What is the proposed new logo? It will obviously help the public as will the additional designatory letters MICA? The ICAEW should hold dear to leadership and judgment - vote for the merger if you believe both qualities were displayed - ELSE VOTE.

  2. Excellent case for review and discussion Ken - I've cross-posted at AccMan Pro

  3. How does Eric Anstee counter an accusation that Media Strategy use second rate minds with third rate ethics?

    The recent EDM leaves little room for doubt on the ethics of both principal and agent and there ought to be many Council Members sweating on the result of the vote.

  4. Then there is the story about the Scotsman (read ICAS) who was asked to contribute something to the local orphenage.
    He did; two orphans (read ICAEW and CIPFA).

    If I were to, once again, become an accountancy student I would go for ICAS every time.

  5. No I have not made any comment on the smash and grab raid but I am sure that the ICAEW will be able to demolish the profitability of CIPFA in very short shrift.

  6. One opinion is that any vote for the merger should be one of real conviction.

    Do not vote yes on the vague assumption that on balance it may be a good idea or it isn't a bad idea.

    DO NOT SETTLE YOUR PROXY VOTE LIGHTLY; any merger can never be reversed.

    The sensible way to proceed would be to try genuine across-the-board co-operation for some years - there is definitely no merit in merging now.

  7. CIMA now have thousands more students than MICA will have business members.

    What about ACCA?

    Come on, let's hear from any fellow CIMA members and others who will be delighted to see ICAEW at last receive their just reward for their arrogance and stupidity.

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

    - You lot should merge with the ITA : Institue of Turf Accountants

  9. Interesting: ICAEW say they are "a world leading professional body"; whereas, "a leading world professional body" would have only a small ring of truth, since ACCA and probably CIMA are streets ahead.

    In any case, ICAEW are only concerned with international accounting standards and only then as members of the superior international bodies to which they belong.

  10. Just change the order from MICA to CIMA.

  11. Ken,

    Do you think the new institute will be the number one choice for new students if the merger succeeds?

  12. Ken,

    I agree with mfb. Why didn't the President say "annual cost savings ..."? Why did he have to be economical with the truth and say "year on year cost savings..."?
    Because Media Strategy advised this and the use and placement of the word "world" (see Anon 11.35)?

  13. Ken,

    I read that KPMG moved their training to ICAS earlier this decade.

    If the merger happens I would expect the new student intake to plummet.

  14. CIPFA members are just that. Will there be any new Fellows of the new Institute and, whether there are or not, are not CIPFA route members already unequal?

  15. Ken,

    Remember when the big 4 was the big 5 - one stupid mistake and "farewell my lovely".

    I would not say less is more and certainly fewer is not better.

  16. Hi Anom 2.41 pm

    Talking about the big 4/5.

    Does anybody know of a firm of Management Accountants with that many partners?

    CIMA are next on the list for another smash and grab raid.

  17. I do not see how the brand will be diluted.

    Cipfa members will still have to use the letters CPFA (in addition to MICA if they elect to do so). This will show the public that they entered the Institute via an inferior route. Thus preserving the ACA brand.

  18. I doubt that the public will have a clue as to the nuances between the confusing array of letters.

    Additionally, Council will at some stage push to unify this daft hybrid; despite saying that they will run a dual system.

    The rules allow for them to do that.

    Council are more than happy to ignore the wishes of the members, eg the vote the reduce size of council from 90 to below 40 was happily ignored.

    Indeed they will increase the size of Council to 115-120 if this vote goes through.

    That is an extra 25 or so Council members (27-33%) for and increase in 13000 memebrs (10%), rather a lot wouldn't you say?


  19. Dilute:

    Corrupt,debase, or make impure by adding a foreign or inferior body
    Reduce in strenght or concentration or quality or purity.

    Your question seems answered but how can separate qualifications and titles be preserved as a strenght of the combined body?

    It is a either a merger or it is not. There are separate titles now and the addition of MICA is a nonsense.

    It would be appreciated if Media Strategy could avoid abuse of the English language and the President could avoid adding his signature to such drivel.

    Ken, if it's your phrase - over to you.

  20. Ken,

    You were quicker than me on "dilution".

    Merge with CIMA and Council size will be c.180.

    They would then need 3-day-long Council Meetings so that all could at least try to make a contribution.

  21. Ken and all,

    Why don't ICAEW merge with CIOT. Any answers?

  22. phd,

    ICAEW would have significantly more in common with CIOT than with CIPFA but I suspect CIOT would not even consider the lowering their standards even though they have thousands with joint membership.

    CIOT will doubtless have a handful of CIPFA members and I doubt if even they would approve of the idea.


  23. I have heard that the final merger costs will far exceed a million.

    Any competent CEO could have obtained preliminary views from ICAEW/CIMA/CIPFA members for almost nothing.

  24. would someone please explain why icaew would have more in common with ciot than with cipfa

  25. There are more members of the ICAEW Tax Faculty than there are non-retired CIPFA members.

    Only some 2,000 CIPA members are engaged in similar work to the majority of ICAEW members.

  26. ICAEW and CIPFA would be an more appropriate consolidation than ICAEW and CIOT.

    ICAEW and CIPFA are:

    1. Both RQB allowing members to audit.
    2. Both are accountancy bodies.
    3. Both have the same level of training in accountancy and taxation.
    4. Both have similar status.

    CIOT has:

    1. Little knowledge of accountancy.
    2. A greater knowledge of taxation.

    Just because there are more members n the ICAEW Tax Faculty than in CIPFA does not make a CIOT/ICAEW merger more appropriate.

  27. Ma

    Re the merger costs exceeding £1M please can you provide me a with source for that?



  28. If ICAS has a problem with the proposed name, then why not use the name Institute of Chartered Public Accountants. This would maintain the heritage of ICAEW and CIPFA whilst allowing members to use the letters "CPA".

  29. Anon 6.59 am

    Either you have little understanding or you deliberabely misrepresent the facts.

    Your first (1) sounds true except that you do not explain the new circumstances on RQB at CIPFA.

    As to your second (1), CIOT will have about as many joint ICAEW/ICAS/ACCA members as CIPFA (excluding their retired members).

    Where you express your opinions; whilst many will agree with you - I believe many many more will not.

  30. CPA? But will these letters already be protected?

  31. Anon 10.58

    The reason why many CIOT members have dual membership is because it is a well known fact that ICAEW/ACCA/ICAS have less tax knowledge than CIOT, and CIOT have little accountancy knowledge. Hence, the requirement for dual membership.

    In 1990, 61% of ICAEW members voted in favour of merger with CIPFA, this means the many many more ICAEW members support merger (and view CIPFA as equal to ICAEW) than the 39% who voted against (and view CIPFA to be of low status).

  32. A very senior FCA wrote that the merger cost will exceed £1M.

    The 3 Councils could, of course, have sounded their membership opinion cheaply and rapidly.

    The answer could have been available a year ago without all this bad use of time ,cost and ill-will.

    Whatever one thinks about the merger - to blow £1,000,000 needlessly (by so-called accountants) beggars belief.

  33. Anon 11.40 am/6.59 am

    You answer my serious questions properly and then I will respond to yours.

    In any event, do you not agree with the posts about the waste of time and money?

    Anon 10.58 am

  34. When I used the services of a major firm of Chartered Acoountants for commercial work I did not even consider using any firm of CIPFAs. I do not know the name of even one such firm.

    A Client

  35. Anon 12.07

    I am simply trying to point out that an ICAEW/CIPFA merger is a better fit than CIOT/ICAEW merger. That is ICAEW has more in common with CIPFA than CIOT.

    The merger costs are dwarfed by the merger synergies, so I think it will only be a problem if the Institutes vote against the merger.

  36. A Client 12.49

    You will find that in many firms of Chartered Accountants (including the big 4) some of the partners will be CIPFA qualified. This will be the case particularly where the firm engages in public sector consultancy and audit.

    Agreed that the majority of accountants that perform "private sector audit" are ICAEW or ACCA.

  37. The CIOT comment is a red herring and a likely red rag to a bull.

    What is the point in burning more than £1M and who believes year on year savings of £4M (£40M a year after 12 years). Even if it were true, there is still no point in giving Chartered Accountant status to some 11,000 of CIPFAs 13,000 members.

    As regards the 61%, it was of those who voted, not total membership. There are few letters/posts and I suspect there are many ICAEW members so sickened by the whole fiasco that they are likely to resign (if they can) - I just hope they vote first.

  38. Dear ma

    There is nothing to stop ICAEW members from resigning, but I doubt any will once they start thinking with their brains - and that includes the members of the Ginger subset.

  39. It is some time since I have seen a comment from Dr Jeff. Since he has a doctorate I'm sure he has a brain of some distinction.

    I have little doubt there will also be a few hundred CIMA members with doctorates. Even so, I do not regard CIMA or CIPFA as equal.

    Many of us chose to become Chartered Accountants because we regarded that as the most difficult and prestigious route to success.

    As Ken says, DON'T DILUTE THE BRAND.

  40. I do not understad why the route to ICAEW is more dificult. Facts:

    1. ICAEW students get about three months of spoon feeding study leave to sit exms. Anyone could pass with that support.
    2. CIPFA students sit a 5 Hr case study - much longer than that of ICAEW.
    3. CIPFA students submit a thesis to show application of business knowledge. ICAEW's simply memorise facts.

    CIPFA and CIMA members are more than just "chartered accountants".

  41. It is unfortunate that you do not understand and you are of course entitled to your opinion even though many will not agree.

    If CIPFA and CIMA regard themselves as superior to the ICAEW why would their Councils wish to even consider a merger?

    You can of course retort correctly that ICAEW started the ball rolling. Sadly, that is a fact.

  42. I do understand ma.

    I was a "professional student" at one time. I qualified as CIPFA with KPMG in the early 90's. Then went to BPP Accountancy Tutors as a lecturer where I also sat ACCA, CIMA, ATII and ICAS (all first time passes). I am now with EXXONMOBIL responsible for European Tax.

    Take it from me that each brand exam is difficult. I firmly believe that for each of the ACAs, ACCAs, CIMAs that work for me each are as good as each other (I am the only CIPFA qualified).

    I am more interested in the global issues that effect us. SOX is more of an issue than UK GAAP for me.

    I firmly believe that the time has come for the Uk to speak whith one voice on accounting issues. This means a merger of all six institutes.

    really, the Chartered brand is only a figment of the public's imagination these days.

    Kind regards.

  43. I passed the examinations of two of the chartered bodies without effort. That entitled me to become a member of 6 of the 7 chartered accountancy/tax bodies.

    I was not a professional student, I was a woker (8 am until 11 pm most days) so I found no time to study for CIMA - passed the lot in a year - and spent less time studying for those exams than sitting them. I believe that recent standards have plummeted at CIMA.

    I also worked for KPMG (actually, Peat, Marwick, Mitchell & Co, London). I seem to remember Ken and Jeff did as well.

    It would be interesting have comments from Nigel Eastaway and Dr Ashton - they probably have 2 or 3 times as many qualifications as both of us put together.

    Please understand, my loyalties are firmly with Ken, MA, and ICAEW.

  44. Thanks, but what about CCAB and senior international bodies in particular?

    I have to say that my policy is to employ qualified accountants who are cleverer than me.

    Regards to all.

  45. Anon 8.07

    Which of the two of the chartered bodies exams did you sit and which was the 1 of the 7 you were not allowed membership to.


  46. I'm CIPFA qualified, and have perused this site with interest - its been very informative. Here are some reflections:

    I find it sad how some members of one institute try to justify superiority over another. In my experience of working with members of all the institutes, what counts is the person, their abilities and experience. Which institute they qualified with becomes increasingly irrelevant as their career develops.

    ICAEW members work in range of areas. How can the skills and "brand quality" of those who work in small offices preparing sole trader / partnership / small organisation accounts (which are not difficult or interesting) be compared with those who work as FD's of large companies? Of course they can't, and neither could the former suddenly get a job as the latter.

    How could CIPFA members working as FD's of large public sector organisations mananging hundreds of millions of pounds per year "dilute" a "ICAEW brand" that includes people who spend all day on small sets of accounts?

    As I say, the qualification with whichever institute is the starting point, its the person that counts after that.

    Also, could someone also explain to me why the ICAEW members on this forum want to maintain a brand that you evidently have so many complaints about?

    By the way, I shall probably vote against - because of comments about the failings of the ICAEW on this site, the danger that ICAEW will "swallow" CIPFA, and because I feel we need a wider rationalisation in the UK profession than just our two institutes "merging".

  47. I agree with many of the comments by the CIPFA member.

    I am neither CIPFA nor ICAEW but I think CIPFA would be foolish to abandon the independence of their small but selective club.

  48. Re CIPFA member,

    Does he/she think the latter could obtain work as the former?

    There are many aspects to a small practice.

    Also, to judge by results CIPFA members responsible for millions ...

  49. I agree with the ACCA (?) member above. We weren't invited to the party so there seems little point in insulting most of us.

  50. ok, I was being a bit provocative about small practices - I've no doubt there are interesting and challenging aspects - and it wasn't meant as a dig at ACCA. It was intended to illustrate the point that ICAEW is not some homogeneous group of accountants better than the rest of us!

    Regarding the post at 1.37pm about "responsible for millions", I assume its meant as some sort of swipe at public sector financial results. There are two points in particular about this:

    - firstly a general point that politicians, Board members etc decide policy and the financial results are not necessarily the responsibility of the accountants; and

    - secondly, not just CIPFA members work in public services. Many NHS hospitals and PCTs have ICAEW members as their finance directors, and there are widespread deficits in the NHS. This is often because the actions necessary to remain in budget are not politically acceptable, its not the fault of the FD,whichever institute he or she is with.

    I don't believe the evidence supports the view that CIPFA members are worse at financial control in public services than members of other institutes.

  51. CIPFA Member,

    you are right, it's the person that counts. I have seen oxygen thieves who are members of CIMA, ICAEW, ACCA and CIPFA in the public sector.

    Anon 1.37p.m.,

    Those from the same Institute as a great many androids should be careful about criticising other accountants' qualities.

  52. Quote:

    It is one of the first duties of a professor, for example, in any subject, to exaggerate a little both the importance of his subject and his own importance in it.

  53. I have just read the proposal document and laughed out loud at the following phrase,

    "As the pre-eminent public sector
    accountancy body in the world,CIPFA
    represents 13,500 members working atthe heart of an economic sector which accounts for approximately 40% of the global economy."

    This kind of meaningless PR may seem very clever to those who write it, but unfortunately only highlights the weakness of their argument.

    Will resignations occur if the No vote wins the day?

  54. 2950 + are in any event retired.

  55. Agreed that the paragraph should have read as follows:

    "As the pre-eminent public sector
    accountancy body in the world members work at the heart of an economic sector which accounts for approximately 40% of the global economy. CIPFA
    represents 13,500 members"

  56. Ever heard of USA, Russia, China, South Africa, Australia, Brazil and Poland.

    Now rephrase the 40% to my satisfaction.

  57. Hey bright spark

    If you add up the public sector element of the countries you mentioned and compare that with the global economy you will get 40% You have failed to read the paragraph correctly.

  58. Are you deliberately obtuse or ...

    It is pure spin to use the words "world" and "global" and imply that CIPFA have some major international importance.

  59. The Institute is simply stating the facts so that each of us can make our own informed decision.

  60. You have already admitted that they were too stupid, or dishonest, to get their numbers right.

    You do not belong in any professional institute if you believe your last answer.

  61. Anstee and ICAEW were equally incompetent and dishonest.

    How could they spend to much and not dismiss their PR advisors who are reported on this site to be the dregs of their profession.

  62. The Institute have to put some spin on the whole thing, as they cannot tell the truth:

    1. We are not was good as we think we are. ACCA and CIMA are pressing way ahead of us.
    2. We need CIPFAs £35mm consultancy income to subsidise our activities.
    3. We need CIPFAs intellectual capital to give us a higher profile.
    4. ICAI and ICAS do not want us.

    We do not have the skills to generate our own organic growth so we are doing the only thing we can – buying it.

  63. Anon 1.03 p.m.,

    harsh words, but they capture the feelings of a few people I know(from different Institutes).