Accountancy Age's Financial Power List 2013: Big Hitters

I have been placed 25th on Accountancy Age's Financial Power List 2013: Big Hitters, a rundown of who the magazine thinks will be the biggest players in accounting and finance during 2013.

25 Ken Frost, serial blogger and HMRC agitator
A long-time thorn in the side of the ICAEW in his blogging capacity, Frost has found that HMRC's travails have taken up a bigger chunk of his social media efforts. Not that the institute is out of his line of vision, but his probing questions and good contact base make http://hmrcisshite.blogspot.co.uk an amusing and revealing read.

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".

U Turn If You Want To, Ken's Not For Turning II

Nice to see Accountancy Age have corrected the misleading impression that their headline about U turns gave last week.

U Turn If You Want To, Ken's Not For Turning

Today's Accountancy Age has a piece entitled "Long-term critics u-turn in institute cold war".

The article notes that I have stated, in an earlier article, that the ICAEW had "accepted the argument" that mergers would dilute the ICAEW brand.

I have no quibbles with that, and indeed am pleased that the AA article notes that I am unhappy about the size of council and "pension black hole".

I would also emphasise that wrt council, the Victorian nonsense of nationally unknown candidates being "elected" on a local basis, and candidates needing to be nominated, needs to be addressed.

The Victorian trading association model is no longer applicable!

However, I would tactfully like to remind Accountancy Age that the ICAEW (by accepting the argument made on this site for the last two years, that the ACA/FCA brand is superior) has in fact made a U turn, not I!

The AA heading is misleading.

Merger No Longer a Priority?

Accountancy Age reports that Michael Izza, CEO of the ICAEW, no longer believes that consolidation is a priority.

We shall see.

Ethics

Despite a recent report in Accountancy Age, quote:

"The ICAEW is revamping its syllabus for 2007, with a focus on ethics and allowing employees to choose modules relevant for their trainees".

It seems that the ICAEW will not be setting a separate Ethics paper in the revamped syllabus. This is somewhat baffling, as in 2005 the ICAEW had decided that the subject of Ethics was so important that it deserved a separate paper.

Whilst Ethics can be covered to a limited extent in the other papers, the ICAEW has sent entirely the wrong signal to the world by not setting a specific paper on the subject.

The Numbers Game

It was reported last week that domestic ICAEW member numbers have all but stood still over the last year.

The Professional Oversight Board's recent survey, Key Facts and Trends in the Accountancy Profession, shows that domestic member numbers for the ICAEW grew by a mere 350 over the last 12 months or 0.3%.

However, ACCA membership rose from 56,837 to 59,059 over the same period, and CIMA grew from 51,386 to 53,697; growth rates of 3.9% and 4.4% respectively.

ACCA also trounces the ICAEW in terms of its age profile, with 70% of members under 45 years old, whilst the ICAEW and ICAS both have around 50% over 45 years old.

As we know, the ICAEW preferred method of addressing this stagnation in membership has been that of merging with other bodies. This method, because it dilutes the brand value of the qualification, was rejected by the membership last year.

However, I have been discussing with Dr Jeff Wooller (founder of the Ginger Group - not ICAEW approved) another solution.

We believe that we need to offer a solution which addresses both the needs of the market, and maintains the brand image of the ACA and FCA qualifications.

The ICAEW needs to offer the market what it wants, namely a tiered membership pitched at different levels. We should offer two additional qualifications, each with its own set of designatory letters:

• An accounting technician qualification, which would be very popular overseas and rival the CAT qualification of ACCA.



• A non practising qualification, at a higher level than technician, for those who do not wish to endure a training contract. This again would be very popular overseas, and would compete directly with the CAT of the ACCA. It would also be a cheaper and more practical alternative than MBA courses.

Thus the ICAEW could compete in the entire market place, without losing the brand value of its existing qualifications. Future growth rates in the ACCA and CIMA may plummet and the ICAEW would have a global qualification to rival the MBA.

However, we would first need to find out from leading ICAEW members, in business rather than in practice, what they would want from such qualifications. We believe that the ICAEW Faculties would be ideal vehicles for such research.

It will be interesting to see the reactions from the ICAEW competitors to our proposal, an attack would indicate that we have a winning proposal.

Absent Minded Anstee

The ICAEW has announced that new group will be formed to support over 8,000 of its members who work, or have an interest, in the public sector.

Seemingly the ICAEW will pay CIPFA to provide these services. Eric Anstee is quoted by Accountancy Age as bemoaning the fact that if the merger had gone ahead:

"we would have kept the qualification separate and made cost savings".

In other words, he is blaming the failed merger for the costs of this project.

The trouble with this argument, is that it conveniently ignores the £1.42M of our money that the ICAEW bunker wasted on the failed merger attempt.

Funny he forgot that!

A Coup Within The ICAEW Bunker?

I read with interest, and a degree of amusement, the article in Accountancy Age that stated that new ICAEW Council members have actually had the "stones" to criticise the current ICAEW structure.

Seemingly they believe that the ICAEW Council is "parochial", "ill defined" and should be slimmed down.

Correct me if I am wrong, but have I not been arguing for this over the last two years on this site?

As long ago as March 2005 I published this article "Best In Class", arguing for a slimmed down version of council.

Could this report indicate that there stirs within the hearts of some members of council the desire to actually listen to what the membership say?

Maybe the residents to the ICAEW bunker, who have for so long jealously guarded the out of date Victorian structure of the ICAEW, are facing a coup. They will find themselves having to finally accept the fact that the ICAEW, if it is to be fit for purpose for the 21st century, will have to cut council down to size and reorganise along the lines that I have been arguing for during the past two years.

We shall see.

Nonetheless, it is at least encouraging to see that some members of council are reading this site and finally taking on board the message that I have been repeating ad nauseam for the last two years.

Regionalisation

Seemingly the ICAEW is considering turning Scotland into a region, without districts.

The logical consequence of this would be for the current district structures of England & Wales to be restructured into regions.

That at least is what Accountancy Age think.

Herein lies one of the fundamental problems with the current ICAEW structure. The ICAEW was formed in the 19th century and the structure laid down by the "founding fathers" is still in place today; ie districts and a large, cumbersome and unnecessary council.

The ICAEW needs to restructure itself to reflect the realities of the 21st century, rather than the 19th; ie council should be abolished and the districts restructured.

The Succession

Much like the speculation within the Labour Party over the successor to Tony Blair, the ICAEW also has been dealing with succession issues.

Those of you with long memories may recall that way back in June, Eric Anstee announced that he would be stepping down and that the ICAEW would begin the search for a replacement.

Some three months have passed, and as yet the ICAEW has made no official announcement as to the progress of their search.

However, Accountancy Age report today that some 10 interviews have taken place with a number of candidates. The upshot being, if the report is to be believed, that the ICAEW are "playing safe" and going for an internal candidate Michael Izza (currently COO).

It will be interesting to see if the ICAEW update council, and indeed the membership, on the progress being made at the council meeting scheduled for 4th October.

Does the slow pace of progress and lack of information indicate that there are problems wrt filling the role?

Anstee Steps Down

Even the most glittering and majestic of reigns must come to an end.

The above sentiment will doubtless be disseminated by the ICAEW executive as they seek to put a positive spin on the departure "leaked" yesterday, and due to be formally announced today, of Eric Anstee the first ever CEO of the ICAEW.

Anstee presided over the latest (sixth in 35 years) failed merger attempt of the Institute of Chartered Accountants in England and Wales. The timing of the announcement is hardly propitious, coming as it does in the middle of the ICAEW Council Conference which is trying to clear up the mess resulting from the Durgan Debacle.

I do not intend to dwell on Anstee's triumphs and failures; nor indeed do I intend to worry about whether he resigned, retired or was sacked.

However, I would note that Anstee, earlier this year, indicated that he would be in favour of trying to place a merger vote before the membership again. It will be interesting to see if his departure marks the death knell for any future foolish time consuming and money wasting merger attempts.

It should not be forgotten that the last attempt cost us £1.4M, plus untold damage to our brand value.

The departure of Anstee does not let the ICAEW off the hook, with regard to its operations and structure:

• Council needs to be cut from its current absurd level of 90 plus, to a more manageable and effective size of around 6-12 people



• The questions raised earlier on this site, in relation to the Durgan Debacle need to be addressed openly



• The selection of the next CEO will be "interesting", both in terms of who applies and who is finally selected by the ICAEW



• It should also be noted that Anstee intends to stay on his role, until a successor is found. It will be interesting to see if any new "initiatives" are announced during this period

Finally, as a minor matter of curiosity, it would be interesting to know how/why the story about Anstee leaving was leaked a day early and by whom. It is worth noting that the "leak" was well timed enough to enable Accountancy Age to put together several reports on the matter, in time for publication early this morning.

It should also be noted, that the timing and professionalism (Accountancy Age were well primed with several articles and a podcast-which would have taken 24 hours to arrange) of the "leak" means that Council's attention will be distracted from discussing/focusing too hard on the Durgan Debacle.

Who would gain from that?

Maybe though, I am just too cynical?

The future direction of the ICAEW will be decided over the coming months, it will be a very exciting period indeed. I will be following developments very closely.

An Invitation

Council members are invited to post here, or email me directly, any news items relating to the current ICAEW Council Conference.

I regard the attitude of the ICAEW, as quoted by Accountancy Age, re questions over the Durgan Debacle as being a "private matter for council" as being contemptible.

I offer those members of council, who actually respect the membership, an opportunity to tell the membership what is really going on in their ICAEW. I will maintain your anonymity should you so wish.

The days of deals being done in smoke filled rooms are over.

ICAEW To Review Internal Controls

Accountancy Age report that following the Durgan contract fiasco, there will be a review of the internal control procedures relating to how preferred supplier contracts are awarded.

The review will be carried out by Ian Morris, President of the ICAEW.

I have twenty years international experience working in industry, reviewing business controls, advising on best practice (eg purchasing and contract tendering), conducting fraud investigations and implementing codes of ethical conduct.

The ICAEW are more than welcome to contact me if they wish for some impartial, arms length, advice on this matter.

Deja Vu

I read with interest the letters page in Accountancy Age (1st June 2006 page 14) and noted one particular letter from a Nick Wilson who, aside from referring to the anti merger lobby as being dinosaurs, made reference to "the parochial small minded behaviour of the so called 'leaders' of the Scottish Institute".

Imagine my surprise when turning to the letters page of the June edition of Accountancy (page 22), I see the very same letter (almost identical word for word, albeit slightly longer) from a certain Nick Wilson.

I am guessing that this is the same Nick Wilson who, back in November 2005, wrote to PASS having a go at the Scots in very similar language.

Quote:

"The Scottish institute seems to be run by some very small-minded, backward parochials...!"

There's that "P" word again!

It has been well reported that the Labour Party encourage their apparatchiks to write to gullible local newspapers, eager for content, extolling the virtues of Labour and slagging off the Tories. This is a form of "low level" media campaigning and PR.

However, it is comforting to know that Accountancy and Accountancy Age would not be gullible enough to fall for such blatant media manipulation by apparatchiks of the ICAEW.

Confusion at The ICAEW

Whilst the ICAEW reels from the Durgan contract fiasco, its standing with other professional bodies has taken another public battering; as Des Hudson, CEO of ICAS, questioned the ICAEW's recruitment strategy.

He is quoted by Accountancy Age as saying:

"We were surprised by the strategy, with respect to the various qualifications."

He noted that by getting other accountants to take up the ICAEW qualification, the ICAEW was contradicting its previous strategy of merging with other professional bodies whilst trying to keep the qualifications distinct.

Quote:

"To me there's confusion between their current and previous statements."

As John Prescott has found to his cost, slings and arrows can be survived - ridicule cannot. The leadership of the ICAEW are making themselves look ridiculous.

ICAEW Media Blitz

I read the various media placements from the ICAEW, published by Accountancy Age and Accountancy, over the last few days with interest. These placements were in the form of interviews with Eric Anstee (CEO of the ICAEW) and various other senior members of the ICAEW executive.

You will note that I have used the words placements. Although the articles were in the "form" of interviews, it is very clear by the timing and co-ordination that this is in fact part of a media campaign being waged by the ICAEW to improve their damaged image. There were no counterpoints presented, or indeed requested, by either Accountancy Age or Accountancy.

I think it fair to draw the following very general conclusions:

1 The ICAEW, by presenting other members of the executive, are trying to draw the sting from the regular criticisms leveled against Anstee that he is solely responsible for the merger debacle; and that the executive of the ICAEW is a one man band.

2 Anstee states categorically, when asked if the ICAEW will try another merger vote, "I hope so".

We can therefore expect to go through the whole expensive procedure again, before the end of next year.

3 The ICAEW will continue over the coming months to try to present a favourable media image. It is to be hoped that the media remember that there are two sides to the coin.

The Global Accounting Alliance-Updated

Proving that the ICAEW and ICAS can work together they have announced, together with ICAI and six other accountancy bodies, the formation of the Global Accounting Alliance (GAA).

Quote:

"Representing over 700,000 of the world's leading professional accountants, the Global Accounting Alliance will promote quality professional services, global membership support, share information and collaborate on important international issues.

The Alliance will work with national regulators, governments and stakeholders, through member-body collaboration, articulation of consensus views, and working in collaboration, where possible, with other international bodies."

If we can work together in this manner, why did we need to merge?

Unfortunately, Eric Anstee current head of the ICAEW, is still trying to flog the "dead horse" of merger. He is still interested in consolidation with CIPFA and CIMA.

However, he told Accountancy Age that he would have to speak to GAA members about merger plans.

Have I missed something here?

Surely the merger plans were rejected by the membership of the ICAEW last year?

Precisely why should he hold discussions with the GAA about merging?

What part of the word "No" does he not understand?

Update 17:15 27 April 2005

If you look up the registration of www.globalaccountingalliance.co.uk, you will see that it was registered on 15th September 2005 by the ICAEW.

This was before the merger motion was defeated in October 2005. This implies that the wheels were already in motion for the creation of the GAA.

Why then, if the ICAEW was working towards a global alliance at that stage, did they persist in telling the members that the most effective way of making our voice heard on the world/national stage was via merging with CIMA/CIPFA?

FYI, I have registered www.globalaccountingalliance.org.uk in my name, and will ensure that it redirects to this site in the next 48 hours.

The Threat of the MBA

Martin Walker, Professor of Finance and Accounting at the University of Manchester, is quoted in Accountancy Age as saying that the MBA qualification offers greater opportunities to high quality finance professionals than the ACA qualification.

It is debatable as to whether the MBA, as such, poses a direct threat to the ACA. However, Professor Walker then goes on to argue that the ICAEW needs to re-badge the ACA qualification. He notes that merging with CIPFA might reduce costs, but it would not address the shortcomings of the current ACA qualification:

"..if you haven't go the product that is internationally competitive, it doesn't matter how cheap it is".

He is absolutley correct. It should also be remembered that whilst the ICAEW was spending vast sums of time and money last year in trying to railroad through the merger, they allowed the relaunch of the new syllabus (originally planned for this year) to fail.

The neglect of the syllabus is inexcusable, and will have a detrimental long term effect on the brand value of the ICAEW.

The Dying Institute?

Accountancy Age report that ACCA has 73,839 students in the UK and Ireland, CIMA has 57,106, while the ICAEW has 8,560.

The article also notes that the growth of ACCA and CIMA is outstripping that of the ICAEW.

Whilst it is true to say that size of itself is not an indication of quality, the ICAEW should be concerned that the number of people wishing to join the ICAEW is, on the face of these statistics, declining.

Yet, last year, the ICAEW wasted time and money chasing the false solution of a merger with lesser bodies.

The ICAEW needs to identify and address the "internal" issues that are putting potential new members from joining, and not waste its time and members' money on further merger votes.

Issues that need to be addressed include:

-The exam syllabus

-Ethics in the profession

-The size and structure of Council

-Value for money in respect of subscriptions

-Working more closely with CCAB

-Improving relations with ICAS