Friday, December 21, 2012

The #economia50

My thanks to those who voted for me in economia’s (the official magazine of the ICAEW) list of the top 50 most influential sources of finance news and information in social media.

I am number 30 on the list.

As per economia:
We asked, and you responded. Here are the top 50 most influential sources of finance news and information in social media, voted for by economia readers and ordered by PeerIndex…

Using the hastag #economia50, readers sent us their nominations, we counted the votes and ranked them according to influence in association with PeerIndex, to reveal the economia Finance Twitter 50.

Topping the list is Michel Barnier, the EU commissioner who oversees financial regulation. The bilingual bureaucrat’s presence at the top of the list suggests the significance of the ongoing EU audit debate as well as the general uncertainty over the eurozone.

Aside from the influence of Europe, the list is dominated by journalists, with Newsnight’s economics editor Paul Mason coming in at number seven. The energetic tweeter offers insight to the UK economy and the political machinations behind it.

Flying the flag for chartered accountants in the top ten is Richard Murphy, founder of the Tax Justice Network and an advisor to the TUC on taxation and economic issues. A sometime columnist for The Guardian and, he offers his followers forthright views on the profession.

Never afraid to express his opinions on HMRC or the profession in general, Ken Frost rounds out the top 30. Frost writes regularly on his own website and blogs for Metro.

Given her role as chair of the Public Accounts Committee, which has spent the last month lambasting tax avoidance schemes used by large companies in the UK, it’s no surprise that MP Margaret Hodge features on our list at 37.”
The full list can be seen here economia.

Wednesday, December 05, 2012

ICAEW Withdraws Audit Qualification of 713 Members

As per Economia there has been a wee bit of an administrative snafu within the ICAEW, that will negatively impact 713 members erroneously given an audit qualification since 2008:
"More than 700 ICAEW members are to have their audit qualification withdrawn after the discovery of an administrative error in the ICAEW Learning and Professional Development department.

This resulted in their receiving the qualification although their audit experience did not match the eligibility criteria. The error does not affect their ACA qualification or their ICAEW membership.

Letters are on the way to the 713 members who were among 28,000 members given the qualification over the past four years on the basis of their audit experience. This was part of an initiative, launched in 2008, that was designed to ensure that ICAEW-registered audit firms were helped to maintain compliance with EU legal obligations which require them to be controlled by qualified auditors.

As firms had widened their interests into other, non-audit areas, it became more difficult to ensure that 51% of the partners were audit qualified. However, there were plenty of ICAEW members who met the eligibility criteria, even though they no longer worked in straight audit.

To save the members having to write an extensive and time-consuming narrative detailing all their audit experience, and obtain fresh counter-signatures, ICAEW drew on its records for evidence of eligibility. The problem arose because members who trained outside the UK or in a crown dependency were mistakenly included when they shouldn’t have been. Strict restrictions set by UK company law require members to have gained their key experience for the audit qualification in UK statutory audit work.

“As soon as we became aware of the anomalies, we contacted the FRC and set up an internal inquiry,” said Mark Protherough, ICAEW executive director for learning and development. “We have now restructured the department to ensure that the right oversight is in place and that this sort of administrative mistake does not happen again.

“We apologise to those members who were awarded the audit qualification when they shouldn’t have been.” 

Those affected members who believe they do in fact fulfil the eligibility criteria should get in touch with ICAEW.

The institute thinks it unlikely that firms will find they do not comply with the 51% rule as a result of the mistake. However, if they are concerned, they should also get in touch."

How is it this error has taken four years to surface, and has only now been discovered?

Monday, December 03, 2012

ICAEW and CIOT Offer Fast Track To Joint Membership

The ICAEW and CIOT have announced a fast track scheme to joint membership of the two professional bodies, that will enable successful students to join both bodies within three to four years (faster than using the traditional route of ICAEW first then CIOT).

The programme includes a new paper "Taxation of Major Corporates" which, given today's PAC report on HMRC and the ongoing media frenzy over multinational tax avoidance, is clearly relevant to those with a penchant for tax.

Here is the full text of the announcement:

The Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Taxation (CIOT) have launched a Joint Programme enabling students to simultaneously achieve two prestigious qualifications – the ICAEW chartered accountancy qualification, the ACA, and the Chartered Tax Adviser qualification, the CTA.
Those students who successfully complete this route, which is likely to take three to four years, will be eligible to apply for membership of both ICAEW and CIOT – providing they have undertaken relevant professional work in tax and accountancy during their studies. This could be quicker than if they had followed the traditional path of training to become a CTA after qualifying as an ICAEW Chartered Accountant.

Within the Joint Programme there will be separate routes to qualification for those specialising in direct and indirect taxation.

Mark Spofforth, ICAEW President said:
“The Joint Programme is designed for the most dynamic and talented corporate tax professionals who are ambitious to rise quickly to the senior levels of the profession.

“Under this new programme, students complete all the requirements for the ACA and CTA in a way which considerably reduces the study overlap, time out of the office, and tuition costs.

“It still enables the employer to be confident that the student has gained the relevant skill set required for an accountant ready to advise on tax at the highest level. The combination of two well respected and high quality programmes will help employers offer their employees a more efficient route to become tax specialists.”

Patrick Stevens, CIOT President said:
“The CIOT and ICAEW have worked closely with professional services firms to create this flexible new programme for those specialising in tax. It has been designed for students dealing with the tax affairs of FTSE 350 companies or other large corporates from the start of their training. It also has a route suitable for those specialising in indirect tax.

“As well as drawing on the existing strengths of the two qualifications it incorporates a new, specially developed paper, Taxation of Major Corporates, which has been developed jointly by ICAEW and CIOT. This paper has a strong practical focus and deals with the kind of corporate transactions that students will find relevant to their employment.”

Paul Morton, Global Head of Tax at Reed Elsevier, added:
“The challenges faced by our department are very demanding so we look for new team members to be highly knowledgeable. We can be sure that a tax professional who has the ACA and CTA qualifications will have all of the technical skills needed to succeed in our team.”

CIOT: George Crozier on 020 7340 0569 or 07740 477374 (
ICAEW: Caroline Florence on 020 7920 8564 or 07973 400 264 (

Notes to editors
  1. For links to further information and brochures please go to or
  2. ICAEW is a professional membership organisation, supporting over 138,000 chartered accountants around the world. Through our technical knowledge, skills and expertise, we provide insight and leadership to the global accountancy and finance profession.Our members provide financial knowledge and guidance based on the highest professional, technical and ethical standards. We develop and support individuals, organisations and communities to help them achieve long-term, sustainable economic value.
    Because of us, people can do business with confidence.
    ICAEW is a founder member of the Global Accounting Alliance, which represents around 785,000 of the world's leading professional accountants in over 165 countries around the globe, to promote quality services, share information and collaborate on important international issues.

Wednesday, November 14, 2012

ICAEW Cracks Down On Self Certification of CPD

Be warned, the ICAEW is cracking down on those members who fail to complete their annual self certification of CPD.

AccountingWeb (ignore the misleading title of their report) reports that Robert Pasley was reprimanded and fined £3,000 with £1,100 costs for breaching ICAEW bye-law 56(c) which requires members to certify their compliance with ICAEW CPD provisions on an annual basis.

Wrt AccountingWeb's misleading article title, a cynic might opine that were the ICAEW ever to crack down on actual CPD undertaken by every member, it is likely the ICAEW would lose half its membership.

Tuesday, October 23, 2012

Professional Stage Exam Results September 2012

The ICAEW have released the results of the Professional Stage Exam sat in September 2012.

A total of 2,972 students sat the September 2012 session. 6,450 papers were attempted in total, with 2,220 students passing all the papers they took. 846 students passed the Professional Stage this session, with 604 of these not failing any papers.

Pass Rate %
Business Strategy 1,036 87.1
Financial Reporting 1,193 75.6
Financial Accounting 983 89.6
Audit and Assurance 1,209 88.0
Taxation 1,136 88.7
Financial Management 893 86.8

Evidently Financial Reporting proved to be somewhat problematic for many candidates.

Monday, October 01, 2012

Real Time Information (RTI) Resources

Resources to help you understand Real Time Information (RTI), the automated HMRC process to collect payroll and tax details as wages and salary payments are made.

In theory it will eliminate annual reconciliations and end-of-year forms such as P14s and P35s.

All schemes/employers with less than 5,000 employees will start to submit RTI in April 2013; those with 5,000 employees or more will start to submit RTI on dates agreed with HMRC between June and Sept 2013.

As per HMRC:
"The move to reporting information in real time is the biggest change to the operation of PAYE in over 60 years.

Under real time reporting, employers and pension providers – or agents, payroll bureaux and other intermediaries acting on their behalf – will send us information about tax, National Insurance Contributions (NICs), student loans and other deductions each time they pay their employees. This will enable HMRC to keep more accurate records and, over time, more people will pay the correct tax.

So what are the essential facts you need to know?
• Migration to reporting PAYE information in real time is mandatory
• Most employers and pension providers will move to reporting PAYE information in real time from April 2013
• We will write to you
– in October to tell you what you need to do to get ready
– in February to confirm the date from which you should start reporting PAYE information in real time
• Most employers already send PAYE information electronically and information reported in real time will also be sent online. Your payroll software will collect the necessary information and send it to HMRC online
• You need to consider your options for payroll. A wide range of commercial software designed for real time reporting will be available from April 2013 to suit employers’ and pension providers’ individual requirements, including some free products. HMRC’s Basic PAYE Tools will also be available for employers who have nine or fewer employees. You can get more information about this at
• You will need to include information in your RTI submissions about all employees
• We will no longer require the end-of-year Employer Annual Return forms P35 and P14, and you won’t need to send forms P45 and P46 to us; instead you will include this information with the information reported in real time
• Employers making payments to their employees by Bacs, using their own service user number, will need to include a cross-reference in the RTI data submission and their Bacs payment instruction, see Getting ready to operate PAYE in real time.

What will not change?
• The way tax and National Insurance contributions are calculated will not change
• You will still need to give employees certificates of tax and NICs paid – form P60
• You will still need to send expenses and benefits returns (P11D and P9D) annually
• The dates by which you must pay HMRC stay the same
Here are some useful links:

Friday, September 14, 2012

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Monday, August 20, 2012

The Danger of Hubris

In its haste to congratulate itself on HMRC's announcement about possibly "recruiting" another 1,000 staff for call centre duty, has the ICAEW forgotten that HMRC promised the self same thing in March 2011?

Wednesday, August 15, 2012

Membership Derides ICAEW's Stance on Tax Avoidance

The membership of the ICAEW, who have taken Accountancy Age's poll on the ICAEW's stance on tax avoidance, have given the ICAEW a hearty two fingered salute.

Accountancy Age reports that "strong opposition" has been voiced against the ICAEW's move to outline how advising on aggressive tax avoidance is a potential disciplinary matter.
"Three-quarters of the 60 readers polled online by Accountancy Age said they did not agree with the ICAEW's decision, while 17% were completely behind the move. Some 5% agreed, but felt the guidance was too vague, and 3% were unsure."
Doubtless those residing in the ICAEW bunker will be bemused, bewildered and dismissive about the result.

However, those who reside in bunkers would do well to listen to voices outside if they wish to retain office!

Tuesday, August 14, 2012

NAO To Audit HMRC's Service Commitments

As I noted on Friday, HMRC have with great fanfare and naive approval of the ICAEW attempted some diversionary tactics by announcing a reallocation (HMRC calls it "investment") of "up to" £34M and a possible extra 1,000 personnel into their call centres.

Whilst the above may satisfy the ICAEW and some naive taxpayers, the NAO are not going to sit idly by. As I note on my HMRC site, the NAO is looking at commitments made under the HMRC’s change programme and will report "in winter 2012" on the service that HMRC’s "customers" receive over the phone, online and in writing.

Monday, August 13, 2012

The ICAEW Stance on Tax Avoidance

Currently, according to the poll hosted by Accountancy Age that asks "Do you agree with the ICAEW's disciplinary stance on tax avoidance?", 84% of respondents say "No, leave it to the tribunals and legislators".

Friday, August 10, 2012

In Which The ICAEW Spouts Utter Nonsense

The ICAEW has fallen for HMRC's PR announcement about new "investment" in its appalling call centre service hook line and sinker.

The idea that the £34M (if that is what will really be spent) is new "investment" is utter nonsense. The money, as I have clearly explained on my HMRC site (and as indeed Lin Homer says), is merely a budget reallocation from other parts of the overall HMRC budget.

This is nothing more than window dressing!

As one commentator wrote on my HMRC site:
"Don't be fooled by the retoric, there's no new money, they are only robbing Peter to pay Paul, there will be some new jobs but the vast majority will be back room staff taken off working on post to answer phones.

They have spent God knows how much revamping the telephones so we're now connected to the CC system.

So telecalls will be answered more quickly but as we all know not everything can be done over the phone and written confirmation or paperwork is required. so the post receipts will go sky high, then the calls will triple cos everyone will want to progress chase and it's back to Square One, thank God I retire shortly

How gullible can the ICAEW be?

Friday, August 03, 2012

ICAEW's Helpsheet On Aggressive Tax Avoidance

The ICAEW has issued a Helpsheet to remind its members of the terms of its own Code of Ethics and its guidance on professional conduct in relation to taxation. The Helpsheet focuses on the "aggressive end" of the tax planning spectrum and provides practical guidance.

It is sad to see that the ICAEW appears to be running scared wrt the tax avoidance witch-hunt orchestrated by dog whistle politicians and the media.

The helpsheet quite correctly states:
"Tax is a question of law and it’s the Government’s job to decide what legal tax planning arrangements it wishes to prevent."
However, it then goes on to imply that members should take a "moral" decision on behalf of third parties (ie clients)  wrt the "morality" or otherwise of legal (subject to a challenge in the courts) arrangements that may or may not reduce their business expenditure (ie taxes).

It would be far more constructive, and beneficial to the nation's finances, if the ICAEW were to set the agenda and push for a simpler tax system which would in effect make these schemes obsolete.

Tuesday, July 17, 2012

ICAP Fiasco Rumbles On

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

Yesterday I asked:
"Does this ruling apply to ICAEW students?"
By all accounts the ICAEW is also wondering this.

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

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

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

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

Monday, July 16, 2012

ICAP Ban Foreign Accountancy Students

In July 2009 I wrote the following:
"A fellow member of the institute wrote to me today, voicing his fears over the dilution of the ICAEW brand wrt less demanding entry requirements for members of the profession who qualified in India and Pakistan.

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

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

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

ICAEW has given more relaxation to ICAI(India) members.
Whilst the ICAEW may be relatively relaxed about brand dilution, it appears that ICAP are not.

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

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

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

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

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

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

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

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

 ICAP's student numbers are down and hence such an action has been taken in order to protect their interest."
This appears to have stirred up a hornet's nest.

Friday, July 06, 2012

Izza Changes His Mind

On 29 June I wrote:
"Michael Izza (CEO of the ICAEW) has published a blog post today entitled "Chartered accountants and tax evasion". Oddly though his first sentence deals with tax avoidance, not evasion, specifically the Times campaign against tax avoidance."
It seems that the ICAEW has taken on board what I wrote, because the title of Michael's article has now changed to "Aggressive tax avoidance - my view".

Thanks to Tax Journal for pointing that change out.

Thursday, July 05, 2012

Kicking Off On Michael Izza's Blog

I see that it is rather kicking off on Michael Izza's blog about tax avoidance.

Good to see that fellow members are not docile/passive about this issue!

My views on the subject are here: An Opportunity Lost - Michael Izza Gets Stuck On K2

Friday, June 29, 2012

An Opportunity Lost - Michael Izza Gets Stuck On K2

Michael Izza (CEO of the ICAEW) has published a blog post today entitled "Chartered accountants and tax evasion". Oddly though his first sentence deals with tax avoidance, not evasion, specifically the Times campaign against tax avoidance.

He goes on to say:
"I believe that there is no place for our profession in the creation or maintenance of these sorts of tax schemes...

In these difficult times, any ICAEW Chartered Accountants who are engaged in the kinds of schemes highlighted in The Times need to look at themselves in the mirror and ask – am I upholding the honour and reputation of ICAEW Chartered Accountants and am I seen to be doing that? If the answer is no then they need to ask themselves whether they want to belong to our profession or not? "
Sadly Michael has missed an opportunity to stand up against the media and political witch hunt that is threatening both legitimate tax avoidance and the profession itself.

Instead of calling for the simplification of the tax system, which would kill many complex tax avoidance schemes stone dead, he kowtows to the pressure of the media and political witch hunt and implies that the ICAEW wants members who offer legal tax schemes which the ICAEW does not approve of to leave the ICAEW.

As Jason Selig commented the other day on the ICAEW Group discussion about tax avoidance on LinkedIn:
"How is this a moral question?- there is no "right" or "wrong" about paying tax. 

Is it moral to save for a pension or open an ISA or invest in an EIS scheme? 

All of them save tax and if it wasn't for the tax break you wouldn't do them. A tax adviser is under a "moral" obligation to offer these kind of schemes to clients and warn about the ramifications, tax investigation, exposure in the media of actually doing them. 

To fail to offer the schemes where relevant would be potentially negligent. 

You may find them repugnant - as do I in some of the more aggressive schemes such as K2, and my advice to clients is not to enter into them - but that's not my call it's the client's - the fact is it's legal and fully disclosed on the tax returns - if HMRC want to challenge there is a legal process that allows them to do so. "

As I noted the other day on my HMRC site:
"Avoidance is a perfectly normal human thing to try to do, the politicians are not in a position to lecture the rest of us on 'morality'." 
The media and politicians lecturing us on morality is as natural as a cat walking on its hind legs.

Wednesday, June 13, 2012

ICAEW Members Disconnected From ICAEW

Unsurprisingly of those members of the ICAEW that could be bothered to vote, a significant percentage (almost 20%) voted against an increase in the annual subscriptions.

Accountancy Age reports that of the nearly 8,000 members that voted, 19.8% voted against an increase.

The ICAEW has over 138,000 members worldwide, the turnout of less than 6% is a disgrace and shows an alarming disconnect between the bunker in Moorgate and the membership who live and work in the real world.

Based on the low turnout and (relatively) high vote against an increase in subscriptions, the ICAEW will have its work cut out for it if it is forced to fill the £40M black hole in the pension scheme by increasing subscriptions again!

Wednesday, June 06, 2012

ICAEW Technical Advisory Twitter Account

The ICAEW have set up a special twitter account that gives access to a specialist advisory team to support ICAEW members, by providing free confidential advice on and help with any technical or ethical problems, issues or questions.

The account is at this address @ICAEW_TAS

Saturday, May 19, 2012

Gilding The Lilly

Five days ago I wrote about my surprise that Michael Izza had not commented on the potential £40M pension deficit in the ICAEW's 2011 accounts:
"for reasons that are unclear he does not say a word about the pension deficit of £40M that completely undermines that finances of the ICAEW, and is the tail that is wagging the dog of the ICAEW's drive for new members via its international "strategy".

How very odd that he doesn't mention it?
It seems that I am not alone in believing that such a significant potential shortfall deserved more prominence. Kevin Reed is also of that view:

"MAKING FINANCIAL REPORTING more relevant and easier for to stakeholders to understand has been a long-running issue. 

Let's face it - when things go wrong there will always stakeholders up in arms as to why they'd not been able to predict such a terrible moment by reading the accounting runes. Conversely, there will be some clever sausage that looks in hindsight at the statements and figures to highlight that the problem's been clear all along.

As a non-accountant of the most severe kind - but as a journo with an interest in these issues - a couple of areas within the latest annual reviews from ICAEW and CIMA left me slightly perplexed.

Firstly, the ICAEW's pension scheme financial position has been valued by actuaries as in deficit of £40.1m at 31 December 2011, compared with the triennial valuation measured in 2010 at a deficit of £19.9m. This has the potential of forcing the ICAEW to stump up another £5m and review its pension funding plan. A fall in gilt yields is the main culprit behind the deficit's degradation.
Having traipsed up and down the pension schemes numbers - which spread across four pages - I admit to originally missing out the figure, which was included within the narrative section of the notes.

The deficit is mentioned twice within the institute's financial statements - in the review pages and again in its notes to financial statements. The ICAEW's summary of its position, the review, is online where the deficit is again flagged up.

The ICAEW told me that it is satisfied about the coverage afforded to the deficit, and its potential ramifications, within its year-end statements. Note the ‘potential', as the valuation itself was a ‘desktop' valuation, or estimate.

While I don't pretend to be able to pull out the institute's various pension scheme calculations through its statements of financial position (or balance sheet as I'd know it), particularly as ICAEW stakeholders are - let's face it - accountants, it still irks.

As a journo I'm not owed anything by the ICAEW. But maybe in the context of its members, and its role in making reporting as clear as possible, perhaps such an important ‘number' deserved more pronounced presentation.

And while on the topic, it also seems strange that CIMA feels it can't specifically reveal chief executive Charles Tilley's pay packet.

CIMA's annual review 2011 reveals its water consumption (3,400 cubic meters), but not the salaries of its senior management.

Some details are contained within the financial statements, but these are anonymous. We know that the highest paid executive's dosh has moved from the £210k-£220k bracket to £220k-£230k between 2010 and 2011. Is that Tilley? Dunno, assume so. Has ‘his' pay gone up from £220k to £220.1k, or £210k to £230k? A 100 quid or twenty grand? Dunno.

The average CIMA staff salary (wages + NI) fell to £33,349 from £36,224, with total staff numbers up to 426 from 369.

And of course, you're dying to know, the ICAEW does state their executives' pay. Chief Michael Izza earned a total of £477,000 - £372,000 in salary and £105,000 in ‘deferred variable pay', or performance-related pay."
My thanks to Kevin Reed for his Tweet following my publication of this article:
Hat tip to Ken for flagging up the pensions data in 1st instance. Will add to my copy"

Monday, May 14, 2012

What About The Pension Deficit Michael?

Michael Izza (CEO of the ICAEW) has just published a brief review of the 2011 ICAEW results, entitled "2011: A Year of Growth for ICAEW".

He says:
"We have just published the ICAEW Annual Review for 2011, and as you will see the headlines are positive. Member and student numbers are up and income has grown, despite a tough economic backdrop in many parts of the world."
Yet for reasons that are unclear he does not say a word about the pension deficit of £40M that completely undermines that finances of the ICAEW, and is the tail that is wagging the dog of the ICAEW's drive for new members via its international "strategy".

How very odd that he doesn't mention it?

Friday, May 11, 2012

ICAEW Results - Pension Deficit Drains ICAEW Lifeblood

In May 2011 I wrote the following about the ICAEW's results:
" the defined benefits pension scheme, which was closed on 30 June 2010, is expected to show a £22.6M deficit as of 31 March 2010 following the completion of an actuarial valuation.

It seems that funding contributions of £6M a year for three years, followed by £3.5M a year, will be made until the deficit is eliminated.

It is reasonable to assume that the long suffering members of the ICAEW will be expected to pay increased subscriptions to cover these funding contributions
. "
One year on, and the pension deficit continues to drain the lifeblood of the ICAEW.

In fact the pension deficit (based on a December 2011 desktop review) has worsened to £40.1M:
"at which level a trigger event is recognised on the covenant agreement.  The situation is being monitored to determine whether this represents a temporary event and discussions are continuing with the trustee. This review will not be concluded until after the date of signing of these financial statements. At that date our estimate of scheme funding was 82.5%, at which level we would expect the trigger event to be deemed temporary.

If the red trigger event is not deemed to be temporary and the covenant agreement is enforced, an additional funding contribution of £5.0m to the scheme would be required and the funding plan reviewed as to duration and size of payments; the current covenant agreement would also end. Such a contribution does not have a direct impact on the income statement and no provision has been made within current liabilities owing to the uncertainty of the temporary event."
Be warned, by the sound of it there may be a major increase in subscriptions.

However, much like local councils, it seems that the ICAEW has found a way to boost its finances (other than just by increasing the annual subs); namely by levying fines. The retained surplus after tax for the year was £4.1m (2010: £1.8m), after receipt of £2.4m of one-off fines and recoveries of past costs from the Accountancy and Actuarial Discipline Board (AADB).

Wednesday, May 09, 2012

Cameron Lambastes Accountants Again! - ICAS Weighs In

I am pleased to see than Anton Colella (CEO of ICAS) is also less than impressed with Cameron's comments about accountants:
""People want to know that we’re not just a bunch of accountants trying to turn around the British economy as if it were a failing company, but that we’re resolutely on their side as we do,” said Prime Minister David Cameron earlier this week. It’s an unhappy irony that, in making an appealing point, Mr Cameron should malign an entire group of hard-working professionals.

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

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

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

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

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

Prudence is a watch-word for accountants; in reporting, in auditing, in projecting. Prudent phrasing, in this case, might have helped avoid one group of people feeling as though Mr Cameron was not resolutely on their side."
The drip drip of negative comments about accountants, tax efficient schemes, tax avoidance etc, that are coming from Osborne and Cameron, are deliberately designed to play to people's prejudices about the profession and about those involved in the "dark arts" of financial advice.

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

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

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

Monday, May 07, 2012

Cameron Lambastes Accountants Again!

I see that Cameron is lambasting accountants again:
" David Cameron has warned that the Coalition risks being seen as a “bunch of accountants” unless it “focuses on what matters” in the wake of last week’s dismal local election results."
It looks like the letter from Michael Izza was not enough.

As I wrote a few days ago:
"Izza should not be too surprised at the barracking about tax avoidance and accountants from Cameron, Osborne and their ilk. Their background means that their financial affairs are handled by trusts and (ironically) accountants. They have no real world interaction with HMRC or the "mundane" daily matters of the finance that the rest of us have."
Maybe an open joint letter from the UK's leading accounting bodies is required, or maybe Cameron's accountant should simply go on strike?

I have Tweeted to tell him to stop this nonsense, I suggest fellow members do the same and make #accountinggate a trending topic.

Friday, May 04, 2012

ICAEW International Constituencies

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

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

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

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

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

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

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

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

Tuesday, May 01, 2012

Izza Vents His Spleen

Fed up with the low level ongoing anti accounting barracking from the Bullindgdon set at the heart of government, Michale Izza (CEO of The ICAEW) has vented his spleen.

In a letter to Cameron, Izza says that, while such remarks may be tongue-in-cheek, they undermine the significant contribution that the profession makes to the UK economy.

Izza should not be too surprised at the barracking about tax avoidance and accountants from Cameron, Osborne and their ilk. Their background means that their financial affairs are handled by trusts and (ironically) accountants. They have no real world interaction with HMRC or the "mundane" daily matters of the finance that the rest of us have.

Georgie Porgie and Cameron need to be reminded of the wise words of Lord Templeman in 1992:
"There is no morality in a tax and no illegality or immorality in a tax avoidance scheme."

Saturday, April 28, 2012

KPMG's Irony

How ironic that one of the world's leading accounting firms, KPMG (my old firm in fact), failed to pay any of its 11,000 UK staff yesterday (as it was meant to have done).

Payroll World reports:
"KPMG says it “holds its hands up” to a human error at the firm that has led to its entire UK workforce not being paid on time.

Normally staff at the big four accountancy firm are paid on the 29th. If that falls on a weekend, as it does this month, they are paid the Friday before. 

But a human error has led to 11,000 staff having to wait until Monday to receive their wages.

A spokeswoman for KPMG told Payroll World that the problem was not with its supplier but originated within the firm.

“We hold our hands up over this, it was caused by a human error within KPMG,” she said.
An email was sent to all staff this morning explaining the problem.

“We hope we told people in time to adjust any direct debits or payments from their accounts if they needed to. Our HR and finance teams are ready to help anyone who may face any hardship as a result of the mistake,” she said."
KPMG may need to follow their own advice re payroll systems:
"Review the systems – how robust are systems around payroll and what safeguards are in place to ensure that the correct amounts of tax and NIC are properly accounted for?"
Interestingly KPMG issued a press release in March about RTI and a survey conducted by KPMG which said:
"The survey also revealed that many employers were still relatively “low tech” in their approach to payroll: a surprising 25 percent of respondents said they did not use software to run their payroll, 22 percent still make payments by cheque and nearly half (49 percent) said that their payroll was not linked to their HR systems.
Over four in ten respondents (42 percent) said they had not reviewed their payroll processes within the last year and almost a fifth (18 percent) said they had not done so for three or more years." 
I am a firm believer in creating an opportunity from a crisis (or in this case a cock up), this cock up provides KPMG with an ideal opportunity to review its payroll systems.

Friday, April 06, 2012

Economia and Ken Frost Asleep at The Wheel

Both Economia and myself were asleep at the wheel regarding this error relating to HMRC interest rates:
"As was quite correctly pointed out yesterday, by a loyal and observant reader, Martin Casimir's assertion that HMRC does not pay interest on tax repayments is wrong. HMRC (as I noted in the comments section) does in fact pay 0.5% (perversely it charges 3% for late payments).

I wrote to Martin yesterday about it, and Bloomsbury have acknowledged that they were wrong and will be asking Economia to correct their copy.

It is shameful that Economia (the professional magazine of the ICAEW) and myself (an FCA) didn't spot it when we published Martin's quotes!

So well done and thanks for pointing that out, and mea culpa on my part for being asleep yesterday!
I am hanging my head in shame today!

Monday, February 20, 2012

Fake Chartered Accountants

The ICAEW has issued a warning about people/firms who attempt to pass themselves off as  "Chartered Accountants", who are in fact not entitled to use the designatory letters ACA or FCA.

Here is the ICAEW's warning in full:

"Each week ICAEW receives complaints - from ICAEW members and from members of the public - about individuals and organisations who describe themselves as ‘chartered accountant(s)’ or who use the letters ACA or FCA after their name when they are not entitled to.

When we receive these complaints, we take steps to make sure that the individual or organisation stops using the description ‘chartered accountant’ or the letters ACA or FCA. ICAEW takes these cases very seriously because members of the public can be misled into thinking that the individual is a qualified chartered accountant or - in the case of a former ICAEW member - that they are still entitled to describe himself/herself as a chartered accountant.

This page lists firms and individuals who have been brought to our attention in the last three years.


The following firms and companies have given an undertaking not to pass themselves off as an ICAEW member firm. They are neither current ICAEW member firms nor firms associated or connected with ICAEW.


The following individuals have given an undertaking not to pass themselves off as members of ICAEW. They are neither current ICAEW members nor individuals associated or connected with ICAEW.

Tuesday, February 07, 2012

Arthur Bailey Wins VP Position

Congratulations to Arthur Bailey, he has been elected to become the next vice president of ICAEW.

It is a pity that, despite representing the members and stating:
"One of my key priorities will be direct engagement with as many members as possible, in order to listen to their views and understand their concerns."
his electorate was limited to only those on Council, rather than the entire membership.

Engagement only works when the membership are actually engaged with by Council in "minor" matters such as elections.

Monday, February 06, 2012

Economia and The £30 Breakfast

The new magazine from the ICAEW (Economia) thumped onto my doormat last week.

It seems the target market for the magazine is the upper income bracket of the profession, as there was an article recommending a place that charges £30 for breakfast.

Thursday, February 02, 2012

To The Polls Ye Sons of Freedom!

If anyone is interested, the contenders for position of ICAEW Vice President are:

- Arthur Bailey,
- Ian Davies,
- Nick Parker, and
- Nathan Steinberg

Did anyone actually know that these elections were taking place?

Those of you who are looking forward to vote will be sorely disappointed, the vote is closed to members (only council may vote).

Why are the members of the ICAEW not allowed to vote in these elections?

Poor old ICAEW, can't quite get this "new fangled" democracy thing can it?

Thursday, January 26, 2012

Izza Rules Out CIPFA Merger

ICAEW CEO, Michael Izza, has ruled out a merger with CIPFA.

He is quoted by Accountancy Age:

"There are no formal merger plans in the short, medium or long term."
He also expressed hope that one day CIMA would return to the Consultative Committee of Accountancy Bodies (CCAB).

Given that CIMA left CCAB because they feel that the fees charged to belong to CCAB were disproportionately high, it is unlikely that they will return to CCAB anytime soon.

CCAB will need to demonstrate that it is doing something useful.

Wednesday, January 25, 2012

ICAEW Granted Accreditation

In July 2011 I wrote:

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

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

The ICAEW has now been granted that accreditation:

"The Financial Services Authority (FSA) has granted ICAEW accredited body status under the FSA Retail Distribution Review (RDR). The RDR requires all retail financial advisors to obtain a statement of professional standing (SPS) from an accredited body by 1 January 2013 to continue to advise clients.
ICAEW will now be able to issue SPS to retail financial advisors who have met the FSA’s new qualification standards and also monitor their continuous professional development. This recognises ICAEW’s experience as a professional body and regulator of the accountancy profession.

Vernon Soare, ICAEW Executive Director, Professional Standards commented, “We are very pleased to be the first accountancy body to be granted accredited body status by the FSA. The Retail Distribution Review represents a significant change for retail financial markets and financial advisors and ICAEW will now play a part in delivering an enhanced regime for consumers.”

“We are committed to supporting our members and member firms in this period of change and providing them with new opportunities” Vernon continued. “This is part of a long term strategy to increase the services that ICAEW offers to members and also to build on our consumer focus.”

ICAEW expects to open its scheme for applications in April this year when applicants will need to provide evidence that they have fully met the RDR exam qualification standards, including any gap-fill requirements. Further details of the application process will be provided in due course. In the meantime, ICAEW members and employees of member firms should continue working towards achieving RDR approved or transitional qualifications, and meeting any gap-fill needs."

Monday, January 23, 2012

Shortlisted For Accountancy Personality of The Year

My thanks to PQ Magazine for placing me on the shortlist for their 2012 awards, in the category of “Accountancy Personality of Year“.

Thursday, January 12, 2012

CCAB Site Back Up

The CCAB site is now back up and running, after being taken down for a revamp.

Oddly though, there seems to be no publicity out telling people it has been revamped (aside from me doing this for free here).

Wake Up ICAEW!

Hat tip to Christie Malry for spotting this:

"I know it's common at this point of the year to write "2011" when you mean "2012". 

But every single press release from ICAEW this year is dated 01 Jan 2011. Uh, is there any chance they could be dated when they were released, as is, er, the normal convention?"

Wake up ICAEW!!! 

Tuesday, January 10, 2012

My Last Edition of Accountancy - Epilogue

Re: "I wonder if I should preserve it for posterity?"

Answer: No, I have already binned it!

My Last Edition of Accountancy

My last edition of Accountancy Magazine has arrived today.

I wonder if I should preserve it for posterity?

Friday, January 06, 2012

ICAEW Launches True and Fair Updated

The ICAEW has launched a new website "True and Fair".

"This site is here to help you find out anything you would like to know about the process known as audit - or to use its full title 'Audit of Financial Statements'.... was created by ICAEW, a world leader of the accountancy and finance profession, as part of its public interest charter to advance the theory and practice of accountancy, finance, business and commerce."

Fair enough, but why not launch this as a CCAB initiative, given that CCAB is meant to "provide a unified voice on matters of common interest"?

FYI, the CCAB website is currently "under construction".

By the way, the ICAEW have not used the domain names or, because they are owned by Omkar Joshi who is CEO of Company Reporting Ltd (a publishing business focused on financial reporting practices of public companies).

"Omkar's recent venture TrueandFair was acquired by Company Reporting Limited, a pan-European information service which reports on constantly changing corporate financial reporting practice; identifying actual year on year changes in the reporting practice and governance procedures of Europe's leading companies."