A Small Step Forward

Is it possible that this is the first tentative step towards merging ICAS and ICAEW (two equally prestigious professional bodies)?

See Harmonisation of Qualifications

I would welcome that.

About Time!

The ICAEW is looking at plans to slash its 100 strong council, after meetings in which some members had to sit on the steps because there were no seats.

The council met yesterday to give its views on the plans, with proposals set to be brought forward, possibly for a vote in the middle of 2009.

There are more council members than there are seats in the council chamber, and there are feelings that the number of people makes it very hard for all members to put their views across in debates.
‘Some people feel that a council of over 100 people is getting a bit unwieldy.

‘If everyone were to say their halfpennyworth, every single item would last several hours.’ one council member told Accountancy Age.

Source Accountancy Age

Have I not been saying this for several years now?

It is a pity that it is the lack of seats that has prompted the ICAEW to address this issue.

I suppose we should be grateful that they did not propose building a larger council chamber!

Piffle!

Vince Cable spoke at a fringe meeting in Bournemouth, organised by the local ICAEW.

At the meeting he said that tax avoidance is "deeply corrosive of the ethical basis of taxation".

Piffle!

We all practice tax avoidance, via using personal allowances.

Avoidance is legal and ethical.

Evasion is illegal and unethical.

I hope the ICAEW pointed that out to him?

The March of The Technocrats

Could it be that assurance reviews are no longer the "enjoyable" experience that they once were for the reviewees?

According to Accountancy Age it would seem not.

They quote one senior member of the profession as saying that:

"They [those who have passed the assurance visits] are not given positive reviews unless they are so technically competent that they speak in a technical way all the time. There’s a difference between being technically competent and knowing what the standards say and being able to apply them. But applying the rules requires judgment.

But they [the QAD inspectors] just talk in the standards..if you can't reply in a similar vein, they think you’re an idiot.

Perhaps this is why people are no longer enjoying audits at smaller firms. But we still need a balance between small and large firms."

Could it be that the ICAEW is allowing itself to continue to drift apart from its real world members, and only feed the needs of the large firms?

Why do individual accountants need to belong to the ICAEW, aside from the rule that states you cannot call yourself an FCA without belonging to the ICAEW (and paying the annual subscription)?

What do the ordinary members actually get for their money, aside from a nice certificate in a cardboard tube?

The ICAEW Carbon Footprint

This just in from the ICAEW:

"As part of our ongoing commitment to reduce the Institute's carbon footprint you will now be able to receive, by email, notification of your annual subscription and profile."

LOL!

Surely going online to fill in these forms will use more electricity, thus adding to greenhouse gases etc?

If the ICAEW really wants to reduce the amount of hot air in the world their time would be better employed cutting council down to 12 members or less.

Doomed To Failure

I agree with Damian Wild when he says that the campaign to "prevent unqualified accountants, tax and financial advisers providing services unless they have professionally recognised qualifications" is doomed to failure.

As he says:

"What do you do with the thousands of unqualified accountants who have offered sound advice for years?

Do the institutes offer an olive branch and a grandfathering scheme?

Or simply cast them adrift?

Who would oversee a new regime?

The Financial Reporting Council sees it as impossible to police and expensive to coordinate. So who would do it?"

The experience, quality, qualifications of the accountant and the professional body to which he/she belongs should guide the seeker of services to make a well informed choice as to who should provide their accountancy services/advice.

We do operate in free market, don't we?

Lib Dems Hire ICAEW

Congratulations to the ICAEW for winning an engagement offered by the Liberal Democrats, to audit their expenses.

Lib Dem MPs will have their receipts studied by the ICAEW in regular spotchecks.

I hope that the money earned will be used to offset future membership fee increases that are no doubt planned by the ICAEW.

Tax Safeguards

I wish David Furst (the new ICAEW president) and the ICAEW well as they campaign to insert safeguards against new HMRC powers in the finance bill.

I hope that the campaign is assertive and vocal, and that the ICAEW stands up for itself.

Award Nomination

I am pleased to announce that HMRC Is Shite has been nominated for the New Statesman New Media Awards 2008.

The New Statesman, Britain’s leading political magazine is delighted to announce that HMRC Is Shite has been nominated for a New Media Award in the category of Campaign For Change. The campaign for change award will go to the individual or organisation that has most effectively influenced opinions and behaviour through the use of new media technology. The winner of this award will champion a cause and provide information and tools to instigate change.

The full press release can be downloaded here.

Cost Saving Suggestion

Given that the ICAEW made a loss of £1,909K in 2007, I assume that they are looking for ways of saving money in order to avoid raising my members' subscriptions (oh, my mistake, we are being asked to vote for an increased in subs of 4%).

I note that the accounts state that communications expenditure increased by 71%, mainly due to the provision of Accountancy to all members. I can't see in the accounts how much the figure actually is though.

Given that all the qualified accountants that I know simply throw the magazine in the bin, unopened.

Why not stop sending out accountancy to members?

Loss

The ICAEW made a large loss in 2007

Net result before JDS £1,750K (2007) £5,433K (2006)
Funding of JDS £3,389K (2007) £1,671K (2006)
Net result after tax £(1,639)K (2007) £3,762K (2006)

The result is particularly poor given that income increased from £63,615K in 2006 to £69,052K in 2007, a rise of 8.5%.

It seems that "A substantial part of the Institute's expenditure was as a result of investment in people, with headcount increasing by 9.8% to 594".

Why do they use the Nu Labour word "investment", when we all know that they mean cost?

It is a sad indictment of our profession that a council and board of over 100 accountants cannot at least manage to break even.

I assume that we may expect further increases in our subscriptions.

Reputation

I see that The Guardian has taken a snide sideswipe against accountants, in its coverage of its row with Tesco over tax avoidance.

"As is often the way, the tax had no sooner been introduced than some companies engaged smart accountants and lawyers to work out ways of avoiding what parliament had clearly intended....

But fleet-footed accountants and lawyers were still nimbler, knowing that UK tax legislation is rarely retrospective. A casual reading of the Treasury's repeated statements on SDLT avoidance can leave no doubt as to its frustration at the lengths to which companies would go to outwit the law - and at the sums draining away from the exchequer as a result."

Seemingly, the negative subliminal message being drip fed by the Guardian is that "smart" accountants are rather "devious" and are depriving the government of its "legitimate right" to collect as much tax as it wants.

The Guardian needs to remember that, as I have said before on www.hmrconline.com, tax avoidance is not illegal; we all avoid tax each year by using personal allowances.

The need to avoid tax would be considerably reduced if Brown simplified the tax system.

The ICAEW needs to launch a counter offensive, and counteract the Guardian's negative spin about our profession.

HMRC

It is clear that taxpayers, tax professionals and indeed those who work for HMRC are less than happy with the way that HMRC is being run;

-the failed merger with Customs,
-the ongoing "rationalisation",
-security issues, "customer" care,
-avoidance vs evasion
-and the politicisation of HMRC

are ongoing issues that need to be addressed.

The ICAEW for its part, does its best to push for improvement by lobbying the government and HMRC and by issuing press releases.

Unfortunately, the ICAEW is ham strung in its attempts to promote improvement by the fact that it still has to maintain good relations with the government, the technical nature of much of the subject matter (like it or not, the media and public are turned off by the technicalities of taxation) and that it is by its nature too polite.

Therefore I would like to remind those of you who would like to see an alternative form of critique about HMRC, less "soft cop" more "nasty cop" which is not written by committee, to visit www.hmrcisshite.com.

Those of you with self censoring browsers can visit the same site via the less "in your face" url www.hmrconline.com.

SIDC Collaboration

The Securities Industry Development Corporation (SIDC) of Malaysia is collaborating with the Institute of Chartered Accountants in England and Wales (ICAEW) and the Canadian Institute of Chartered Accountants (CICA) to offer their Corporate Finance (CF) qualification programme.

In a statement yesterday, the SIDC said it would become the first CF programme provider outside the United Kingdom and Canada.

It said the CF qualification, jointly developed by the ICAEW and the CICA, was fast becoming recognised as the benchmark of success in the field of corporate finance.

Source The Daily Edge

Anton Colella Joins The Blogosphere

Welcome to Anton Colella (CEO of ICAS) who has joined the blogosphere.

ICAEW Member Communications Survey II

I have just completed my twenty minute telephone interview with ReputationInc, as part of the ICAEW Member Communications Survey.

They are conducting in depth interviews with 50 members, who have been selected at random from those members who completed the online questionnaire (skewed in favour of those who who criticised or praised ICAEW communications).

A detailed report of the findings will be presented to the ICAEW Board in due course.

ICAEW Member Communications Survey

The other week I completed the online ICAEW Member Communications Survey.

On Friday, ReputationInc (which is conducting the survey on behalf of the ICAEW) emailed me to let me know that I was in a randomly selected sample of members to be interviewed in more depth about member communications.

I have a telephone interview with them booked for this Thursday.

Who Pays?

Paul Boyle, CEO of the Financial Reporting Council, has waded into row over the registration of the term "accountant" and proposal by the ICAEW to stratify the profession.

He suggests that the idea has not been thought through.

Boyle is quoted in Accountancy Age:

"It would be very interesting to see what cost benefit analysis the institutes could produce on this proposal. By definition they can't have power over non-members, so who is going to do this, and who is going to pay for it?".

I can certainly answer the "who is going to pay" part.

The members of course, via higher subscriptions!

Ethics - ICAS Leads The Way

ICAS is leading the way when it comes to ethics:

- They introduced a dedicated ethics exam in 2007
- They are considering a voluntary ethics "test" for CPD
- They are considering introducing an annual ethics statement for members
- In 2008 they will publish a number of case studies of ethical dilemmas experienced by ICAS members

Source "Bean Counters or Business Leaders?"

ICAEW does not even have a dedicated ethics exam, why not?

Why is the ICAEW lagging behind ICAS when it comes to ethics?

Scum of The Earth

It seems that the ICAEW, either via accident or design, has managed to stir up another major row with some other accounting bodies.

Accountancy Age reports that "private papers" (intended for council only) were "accidentally" published on the ICAEW website last week.

The papers disclose a plan to rank accountants in terms of a hierarchy. The Consultative Committee of Accountancy Bodies would be the top, and book-keepers at the bottom.

The plan is part of the ICAEW's desire to formally recognise the term "accountant", and will be submitted to the Privy Council.

The ranking will be as follows:

- CCAB
- financial accountants
- accounting technicians
- book-keepers.

Not unsurprisingly the ICAEW recognise that there may be some opposition to this (eg from the Association of International Accountants and Institute of Certified Bookkeepers).

ICB chief executive Garry Carter is quoted in Accountancy Age:

"Our members are highly qualified, they are not the scum of the earth."

It seems a very odd "accident" to publish this, given that the membership of the ICAEW are never allowed to read on the ICAEW site about what their illustrious members of council discuss or do.

I must ask why did the ICAEW publish this on the site, before they had finalised the plans?

I trust and assume that an investigation is being carried out by the ICAEW.

Needless to say, the ICAEW have now taken down the document from its site. However, I am pleased to say that I have a copy. Here it is ICAEW Report.

I would note that it contains this rather revealing paragraph:

"ICAEW has adopted a policy of getting closer to IFA and other organisations. In turn that meant that David Hunt became the IFA President in January 2007. Eric Anstee became the IFA Chairman of Council in September 2007."

Are we heading for another merger attempt, this time by the back door, or is this a takeover of IFA?

I did warn people about this in three articles in 2005 and 2006:

- The Confidential Plan

- Supersize Me!

- IFA Rumour

The Eye of The Storm

It seems that the ICAEW will soon find itself at the eye of the Northern Wreck storm, as the government has asked it to advise on who (firm of individual) should be appointed as "adviser" for determining the "value" of Northern Wreck.

The bill to nationalise the bank, the Northern Rock Compensation Scheme Order, notes that the ICAEW will have the final say on who will act as "adviser":

"Before making any appointment the Treasury must consult the Institute of Chartered Accountants in England and Wales."

Given that the valuation will determine the compensation that the increasingly desperate shareholders are to receive, the role of "adviser" is considered to be a poisoned chalice.

Whoever accepts the role is likely to find themselves the subject of litigation by the shareholders, keen to take as much from the wreckage as possible.

Phrases "touch it" and "bargepole" are rumoured to have been used by possible contenders.

Good luck to the ICAEW on this.

I am happy to offer my valuation services, and save everyone time trouble and expense.

After due thought and consideration, the estimated value of the Wreck is approximately zero!

Diluting The Brand

The ICAEW, having failed to dilute the brand by merging, has found another way to dilute it. This time via the old trick of dumbing down the exams, and extending time period needed to qualify.

Rob Lewis quotes Raymond Madden, the Institute's executive director of learning and development:

"Instead we said you can take as long as you like, but you can only attempt each paper a maximum number of four times.

Theoretically you could do one paper a year and take fifteen years, but the chances are you wouldn't get a job with a firm. The market manages [the time-bar] for us."

He added:

"We are more flexible than we used to be..."

Lewis notes that the 12 papers that need to be sat at the professional stage can be taken anywhere in the world by home-studiers, who have never done a day's accounting in their life.

Students can take exams at their own convenience.

The desire of the ICAEW to grow in size is undermining the value of the qualification.

The ICAEW should remember that strength comes from quality, not quantity.

The New VP

Congratulations to Gerald Russell, the new Vice President of the ICAEW, who won last week's vote held by council.

For reasons that are unclear to me, the ICAEW official site does not make any mention of the election or of Gerald's victory.

As I said before, it is also a mystery as to why the ICAEW does not allow the ordinary ICAEW members to vote in this election.

Vice Presidential Election

Good luck to the three candidates standing for the position of Vice President of the ICAEW.

They are:

- Gerald Russell, senior partner in the London office of Ernst & Young

- Ian Hayes, managing director at Vataxworld London

- Paul Wagstaff, client partner at HLB Vantis Audit in Wokingham.

Voting closed yesterday, and the successful candidate will be announced at the ICAEW council meeting this Thursday.

The new vice president will take up the role in June. He will then become deputy president after 12 months in office, before being elevated to the post of president of the institute in 2010.

It is a pity, and indeed a mystery, as to why the membership of the ICAEW are not allowed by council to vote for the vice president.

Anyone would think that council and the ICAEW are not interested in the views and opinions of the membership, but only interested in taking our subscriptions from us each January.

Surely not?

Is this an example of effective corporate governance?

Best Practice

It seems that, according to Dennis Howlett, the ICAEW does not believe that its members need to follow best practice.

Quote:

"Best practice does not have to be followed by members."

Has the ICAEW taken leave of its senses?

No To Merger

CIMA CEO, Charles Tilley, has emphatically told Accountancy Age that there will be no further plans for a merger with any other accounting body.

Quote:

"That is absolutely a no.

There is no merger on the horizon."

It is good to know that the accounting bodies have finally got the message from their respective memberships that mergers are not wanted.

Irony

The results of the "Old Professional Stage" ICAEW December 2007 - Professional stage examinations make interesting reading.

In as much as the lowest pass rate (51.1%), was in the Accounting Paper.

Somewhat ironic for a profession of accountants.

Look East

The ICAEW is looking Eastwards as it attempts to increase its size. It has announced a deal with the Chinese Institute of Certified Public Accountants (CICPA) to award credits to each other's examinations.

An agreement will mean that CICPA members, who have passed all five subjects of the CPA Uniform Exams, will be awarded credits in the professional stage of the ICAEW's ACA qualification.

Richard Dyson, ICAEW president, said the agreement between the two parties is "one more step forward in helping to create a global accountancy profession".

Size of course is not everything, quality is the key issue.

Dyson, as if anticipating the above comment, went on to say:

"By providing mutual credits for prior learning, we are making it simpler for members of both the ICAEW and CICPA to achieve qualifications which will enable them to work in each other’s territories."

So long as this does not dilute the ICAEW brand, or expose the ICAEW to ethical problems, then in theory this agreement should cause the ICAEW no problems.

The devil is in the detail.