Accounting and Dance Movement Studies

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"More than 700 ICAEW members are to have their audit qualification withdrawn after the discovery of an administrative error in the ICAEW Learning and Professional Development department.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."

Oops!

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

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.”

Contacts
CIOT: George Crozier on 020 7340 0569 or 07740 477374 (gcrozier@ciot.org.uk)
ICAEW: Caroline Florence on 020 7920 8564 or 07973 400 264 (caroline.florence@icaew.com)

Notes to editors

1. For links to further information and brochures please go to www.icaew.com/aca-cta or www.tax.org.uk/aca-cta.
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.

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.

Firms

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.

Wilshers & Co

Haigh Hudson, Huddersfield

Compadvise Limited, London

Helrik Limited, London

The Really Cheap Accountancy Company, Salisbury

Paul Osborne & Co, London

Hill Associates, Studley, Warwickshire

Craig Callum Associates, Liverpool

Morgan Hayes, Cheshire

Re-accts, Stoke-on-Trent

KDL, Eastcote, Middlesex

Darbyshire & Co, Whalley, Lancs

Chase Henderson, London

ATC & Associates, London

Global Tax Accountants, Walkley, Sheffield

Wise & Co, London

Solar Accountants

Peter Tan & Co, South Croydon

Integra Global Solutions, Thatcham, Berks

Hammel Accountancy Services, London

Convex Capital, London

Anthony Prince & Co, Bromley

3Sixty Group Holdings Limited, London

Graham Ralph & Co Limited, Eastbourne

Young & Co, Middlesex

Individuals

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.

Patricia Kemp, Stockport

Bhagwandas K. Desai, Kingsbury, London

Dinesh K. Desai, Kingsbury, London

Trevor Jacobs, Bourne, Lincolnshire

Michael Rowe, Durham

Stephen Jackson, Stoke-on-Trent

Philip Fernandez, Stratford, London

Peter Howley, Haywards Heath

Paul Hinchcliffe, Cheltenham

Rasheed Abolaji Gbesan

Keith Thomas Colman, Bawdeswell, Dereham, Norfolk

Hugh Lucie Smith, Lancing, W. Sussex

Michael Savva, Oxfordshire

Martin Edward Thorp, London

Jonathan Ashcroft, Moreton-in-Marsh

Geoffrey Langdale, High Bentham, Lancs

Jacqui Stokes, Frome

Belal Choudhury, London

Barry Gumbley, Littleborough, Lancs

Miles Offord, Sheffield

David Keith Evans, London"

Global Ambitions - The ICAEW Looks East

The ICAEW's ambitions know no bounds (internatioanlly at least).

Accountancy Age reports that the ICAEW has opened a new office in Beijing, in order to extend its reach in China and Hong Kong.

I wonder how much this office and its staff will cost the membership?

Come to think of it, why does the Institute of Chartered Accountants in England Wales need an office in China?

Whilst people ponder those two questions, Accountancy Age goes on to report that Douglas Lau (regional director of the ICAEW in greater China) will head up the new office.

Factoid: The ICAEW has 200 members in mainland China and around 3,000 in Hong Kong.

As part of the ambition to grow its membership (its attempt to do so by merging with CIPFA et al was thwarted in the UK) the ICAEW will work with the Chinese Institute of Certified Public Accountants and the Hong Kong Institute of Certified Public Accountants, with which it has signed memorandums of understanding.

There's irony for you!

It would seem that the article I wrote in October 2010, about ICAEW's ambitins in Sri Lanka, is also applicable to the Chinese venture:

"Global ambitions are all well and good. However, care needs to be paid by the ICAEW to ensure:

1 That any inter institute membership, if it occurs, will be structured in such a way as to ensure that the brand value of the ICAEW qualification will not be diluted.

2 That, given the recession and high cost of subscriptions, UK members' subscriptions are not frittered away on global ambitions that have little relevance to the UK membership."

Global Ambition

I see that the Institute of Chartered Accountants of Sri Lanka (ICASL) and the ICAEW have signed a Memorandum of Understanding (MoU), on 25th October 2010, designed to establish closer working relations between the two bodies.

Gerald Russell, ICAEW President, is quoted by dailymirror.lk:

"ICAEW and the ICASL have developed a close working relationship over the years and as a result of this agreement, we look forward to welcoming ICASL members to ICAEW.

Removing barriers for professional accountants across markets, through agreements such as this, is an important part of our international strategy.

ICAEW is keen to work in partnership with accountancy bodies across the world to enhance the profession globally."

Global ambitions are all well and good. However, care needs to be paid by the ICAEW to ensure:

1 That any inter institute membership, if it occurs, will be structured in such a way as to ensure that the brand value of the ICAEW qualification will not be diluted.

2 That, given the recession and high cost of subscriptions, UK members' subscriptions are not frittered away on global ambitions that have little relevance to the UK membership.

Size Doesn't Matter

Accountancy Age reports that the latest survey of accountancy by the Professional Oversight Board shows that ACCA had 137,233 members worldwide in 2009, up from 131,398 a year earlier. The ICAEW saw member numbers increase to 134,698 from 132,411.

ACCA is now larger than the ICAEW.

Sadly this may be used by the ICAEW as an excuse to dilute the brand by making it easier to join the ICAEW.

A quote by "Peter" on the AA website alludes to the fact that this is already happening:

"If the ICAEW is more elitist as the second comment claims why is it the case that they now allow members of other chartered institutes, ie CIMA, ACCA, to become ICAEW members (through the Pathways to Membership programme) without even taking the exams of the ICAEW after they have been fully paid up members of their own institutes for 5 years.

The ACCA and CIMA would only allow members of the ICAEW to become members of their institutes after passing the final exams of their respective institutes regardless of how many years they have been members of the ICAEW."

Easy

As per the Economic Times:

"Sameer Natu (37), head of finance for the rest of Europe at Dr Reddy's Laboratories, bears this out. A CA from India, he has been working in London since 2002, but doors opened up for him following an MoU between ICAI and ICAEW in November 2008.

'Though an Indian CA can get jobs or contracts in the UK, having an ICAEW qualification definitely gives them an edge. It gives them a qualification which is locally as well as internationally recognised,' says Mr Natu.

The MoU allowed Indian CAs to seek senior positions in companies in the UK and made it easier for them to be ICAEW members. To qualify, they had to take just three examinations out of the mandatory 15.

'Due to my six years of work experience in India, I had to appear in only one paper and complete ICAEW's structured training in ethics,' says Mr Natu. However, fresh CAs from India need to take three papers — business reporting, business change and a paper on case studies besides completing ICAEW's structured training in ethics programme."

Are we diluting the brand value of our qualification by making it easier for non members to become members in this manner?

Diluting The Brand

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."

Anyone from Moorgate care to comment?

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.

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?

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?

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.

One Off

It seems that the ICAEW controversial Malaysian advert, that sold the qualification short, was in fact a "one off".

Destroying The Brand

Accountancy Age report that the ICAEW has launched a campaign in Malaysia that seemingly sells the ACA qualification on the cheap, by offering members from rival bodies an ACA "without study or formal exams".

The advert appeared in Malaysian business magazine, The Edge. However, it has yet to appear in the UK.

I wonder why?

Age quote the ICAEW's response to the criticism, noting that candidates would still be "rigorously assessed" by an assessment committee:

"If this has been misinterpreted, for whatever reason, then details will be clarified at the workshops promoted by the advertisement. ICAEW is committed to attracting high-quality applicants through this innovative scheme which is receiving popular support in Malaysia."

Here are a few questions for the ICAEW:

1 Why is this ad campaign being run only in Malaysia, and not the UK?

2 Is Malaysia being used as a test bed for the advert, to see how strongly the members of the ICAEW react?

3 Why was the adverse reaction to the campaign not foreseen? Is this not what we pay PR and media people for?

4 Why are we offering our qualification to people without making them sit exams?

A Reaction from The Bunker

Almost three years after setting this site up, and a "pile" of articles/emails/media interviews later, the ICAEW has finally mentioned my name in public and suggests (Izza Answers - "To this end I would be happy to meet with him to see if we can put some of these issues to rest".) that they would like to talk to me.

I am heartened that three years of effort has not been wasted.

However, I would like to correct a few errors within Michael's blog post:

The signing of the Memorandum of Understanding with CIPFA

"I am glad to say that the story did not leak during the intervening week and that the story was published on our website on 6th July."

It did leak.

I published the story on this site on 4th July, two days before the end of the embargo.

Merger by the back door?

"a significant majority of our members were in favour of the proposals (just under 67%)."

Oh dear, it seems that Michael has fallen victim to the ICAEW's spin.

As I and numerous members of the ICAEW have stated, only 37,004 members voted in favour of the merger; this represents a mere 29% of the total membership of the ICAEW.

That is not a majority!

"The Institute needs to respect the democratic decision"

How very noble of the ICAEW to grudgingly listen to the membership for once.

Maybe not for long though?

"premature to put a member vote back on the table in the short term to medium term."

CCAB

"The Institute remains fully committed to working with the CCAB"

Why then do we need a strategic partnership on top of CCAB?

The ACA

"we believe that it remains the qualification for business leadership"

Quite!

Was this not the whole point of my "don't dilute the brand campaign", that so successfully scuttled the merger attempt?

I am glad that the ICAEW have taken my message to heart.

Ethics

"ethics is now examined across the whole syllabus"

This is not enough.

In my view a separate paper is needed, as was originally envisaged in 2005, in order to send a robust signal to the world and to potential new members about our stand wrt ethics.

The Constitution

"I would urge him to stand for Council and make his voice heard."

LOL!!!!

My voice is heard, by those who choose to listen.

Michael, do you not read the papers or communicate with your fellow ICAEW officers?

My campaign to stand for council was well featured in The Times and accountancy magazines (even the in house propaganda magazine "Accountancy" mentioned it, after the event!), I also wrote to the ICAEW asking them to let the Croydon membership know that I was interested in standing.

The ICAEW chose not to communicate that fact to the membership of Croydon.

"I would be happy to meet with him to see if we can put some of these issues to rest."

Michael's public invitation was posted on 19th July 2007, yet no private invitation was dispatched to me prior to his public invitation.

Why?

As I noted above, I have been campaigning for an improved ICAEW for almost three years. This is the only time that they have ever made the slightest attempt to communicate directly with me, emails of the past have been left unanswered and there has never been the slightest interest expressed by the ICAEW in talking to me before.

Why now I wonder?

Why make the invitation public, without first asking me privately?

Could it be that this blog was a rushed damage limitation exercise?

Epilogue

I received a call on the 20th from AccountingWeb, alerting me about Michael's blog. They said that they has suggested to the ICAEW Director of Communications that Michael and I could do a 10 minute podcast, to discuss the issues raised. Note, this offer was made by AccountingWeb without my prior knowledge.

The offer was rejected by the ICAEW.

Some hours later after the call, and one day after Michael's blog post, I was sent an email from the Director of Communications of the ICAEW asking if I would be amenable to a meeting "our Chief Executive"; thus trying to shut the stable door after the horse has bolted.

It doesn't seem that they ICAEW have handled this particularly well.

I will write back to the ICAEW, with my answer, in the next 24 hours or so.

ICAEW Strategic Partnership With CIPFA

I am advised by an impeccable source that tomorrow the ICAEW and CIPFA will issue a press release concerning a Memorandum of Understanding (MOU) that has been signed by the two bodies.

The subject of that MOU is a proposal for a "Strategic Partnership" between the two bodies.

Seemingly various committees etc will be set up, some of which will be led by CIPFA, that will determine the methodology for forming the joint policy of the two bodies.

It would seem that this is a merger by the back door, and that the ICAEW has ridden roughshod over the wishes of the membership. Somewhat surprisingly this comes in the midst of the ICAEW advertising campaign that proudly trumpets that the ICAEW qualification is the best bar none.

How contradictory is that?

It also contradicts Izza's recent interview, in which he made clear that the merger was off the agenda for the time being.

It would appear that the "leadership" of the ICAEW has decided to ignore the views of the members who pay the salaries of the "leadership" and the expenses of council.

How very foolish of them!

Newsflash

Those of you interested in the future of the ICAEW and the integrity/value of your qualification should access this site at 17:00BST today.

There will be an important announcement made on this site at that time.

A Competitive Advantage?

The ICAEW launched its new advertising campaign this month.

The campaign underlines the value of chartered accountants to business for employers, training organisations and potential trainees.

The headlines used in the campaign, 'A Cut Above' and 'A Competitive Advantage', emphasise (in the words of the ICAEW) the benefits that the ACA qualification provides as a benchmark of the highest professional and ethical standards.

Does this mean that the ICAEW have finally accepted the argument that I have been making on this site, for almost three years, that a merger with a non CA body would dilute the brand?

It would seem that they have accepted that argument.

Otherwise, were they to try to foolishly push another merger attempt with eg CIPFA or CIMA, the words of their own advertising campaign would be thrown back at them.

CA Qualification To Be Offered Outside The UK

ICAS is to offer its CA Qualification outside the UK for the first time. ICAS will offer students in Luxembourg the CA course.

ICAS Chief Executive, Anton Colella said:

"We are breaking new ground by taking the CA qualification outside the UK and onto the continent.

We are responding to clear employer demand for our qualification, which is regarded by many as the 'gold standard' in accountancy training. CAs work successfully in a global business environment – so it made sense to offer business outside the UK the chance to train the leaders of the future through our CA programme."

John Li, Managing Partner, KPMG in Luxembourg said:

"We welcome this excellent initiative from ICAS... We have found that the CA is admirably equipped to satisfy these and other demands from our clients and KPMG are therefore delighted to be at the forefront of supporting this initiative."

Why doesn't the ICAEW opt for in house training, instead of farming it out to third parties?

The ICAEW could then offer its qualification globally, and earn money for doing so, without diluting the brand.