CIMA Displeased

Accountancy Age reports that CIMA are less than pleased with CCAB's decision to announce that CIMA were leaving, without first running that announcement past them:

"However, TS gathers that the CIMA bods were none-too-impressed at the CCAB press release announcing that the institute had buggered off.

With CIMA still technically a member of the CCAB (which will be reformed under a different moniker), the institute was 'very surprised' that the notice went out without its prior knowledge or signoff, catching them on the hop.

An administrative oversight surely, or the CCAB members making it clear that CIMA aren't part of the gang any more and can't have it both ways?"

Stand by for this to heat up.

Have CIMA Shot Themselves In The Foot?

Following the announcement by CIMA that they are to leave the seemingly moribund CCAB, there have been a number of comments posted on Accounting Web by members of CIMA.

Aside from the issue that none of them were consulted over this move, there is also the valid point being made that many accounting jobs require a CCAB qualification.

Now that CIMA have removed themselves from CCAB, does this not put their members at a disadvantage?

Have CIMA by their actions damaged their brand and made themselves and their members a lesser body or, does CIMA know that CCAB is about to implode and that this is in fact a canny move that ensures that they will avoid the chaos that will ensue?

CIMA Leaves CCAB

In 2005 I wrote:

"Eric Anstee is reportedly so incensed, by what he calls "spoiling tactics", that he has threatened to "realign" the ICAEW's funding of CCAB; he may even withdraw ICAEW from CCAB."

Yet, by 2008, the ICAEW had somewhat changed its views wrt CCAB:

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

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

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

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

The ranking will be as follows:

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

Given that the plan then was to make CCAB numero uno, the decision by CIMA to leave CCAB is a tad odd, is it not?

What is the reason for this decision?

Could the reason be that CCAB appears to have died (no press releases since 2009), and CIMA wants to leave before the ship sinks and drowns all those left on board?

ICAS Leads The Way

As I have noted on my HMRC site, ICAS have put a very well aimed and targeted boot into the "delicates" of HMRC, in respect of HMRC's Impact Assessment of Business Record Checks.

ICAS are of the view that business records checks could cost SMEs at least 10 times more than HMRC's guesstimate, and will impose an absurd administrative burden on SMEs.

In HMRC's fantasy land each visit, averaging half a day, will cost a business £54. However, ICAS has re-costed an average visit using realistic estimates of business disruption and adviser's time and have come up with a total of at least £560 per visit.

ICAS is also somewhat wary of HMRC's fantasy plans to visit 50,000 SMEs each year for four years.

That would be most assuredly bureaucratic bullying overkill, if HMRC really had the resources to do that. Additionally, ICAS is not particularly impressed with the "quality" of some of the people HMRC will be sending into the field and is concerned about the "intransigent attitudes" of these inspectors.

ICAS say:

"..the bases on which these proposals have been presented seem deeply flawed.

Assumptions made by HMRC regarding the incidence of inadequate business records are unsubstantiated by any detail, and estimated costs of the scheme are massively understated. It was not long ago that HMRC were assuring the Administrative Burdens Advisory Board that interventions would be well targeted to reduce red tape for compliant taxpayers, and we fail to understand why this policy has been changed...

HMRC's basic assertion that poor business record keeping is responsible for a loss of tax in up to 2 million SME cases annually seems to be a sweeping generalisation with little credible evidence provided to back it up. We would like to see evidence as to how this statistic has been arrived at, as the validity of the entire consultation document is based on it. Without such evidence, the proposals might appear burdensome and unjustified.

Experience of our members in practice suggests that poor record keeping (where it arises) does not necessarily equate with loss of tax – it can sometimes result in their clients paying too much tax...

We would take issue with HMRC's basic assumption that SMEs with poor records have chosen to have poor records. This is a misconception. Those with the courage and tenacity to embark on new business ventures are forced to battle from the outset against a mass of Government regulation and red tape. Typically they don't go into business because of their record keeping skills...

Anecdotal evidence has caused our members to question the skills and professional judgement of some HMRC representatives checking the business records of their clients. We understand that many of these members of staff have no significant accountancy or tax training. This can cause them to be on the defensive, and in these circumstances it is not unknown for them to adopt intransigent attitudes..."

As we can see, an unelected inefficient bureaucracy is allowing the excessive powers granted to it by a weak and incompetent political establishment to go to its head; and is attempting to use these powers to bully people and organisations that pay for its very existence.

Why have the ICAEW not issued not similar riposte to HMRC's plans?

Too Little, Too Late

The ICAEW, and the other professional accounting bodies, have failed in their bid to delay the implementation of iXBRL.

Treasury Minister, David Gauke, responded to the letter issued by the six bodies:

"Having read your letter and considered it along with other representations, I would like you and HMRC to proceed on the basis that mandation of online filing in iXBRL will go ahead as planned on 1 April."

As I noted a few days ago I am "disappoined to see that the professional institues (inclduing the ICAEW) have taken so long to stir themselves..

Delays have consequences!

The iXBRL Issue

I am disappoined to see that the professional institues (inclduing the ICAEW) have taken so long to stir themselves to put up a fight over HMRC's iXBRL implementaion planned for this April.

ICAS did at least red flag it in July 2009.

Kicking Members When They Are Down

From Kevin Reed's blog:

"WHY OH WHY must the ICAEW kick members when they are down?

In the last month the institute has agreed with three of its members that they PAY COSTS of more than £450 each regarding complaints that they entered into individual voluntary arrangements – in other words they were declared insolvent...."

I couldn't agree more, the ICAEW is meant to be for the benefit of the members.

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.

What's In a Name?

The official name of our professional body was changed at the beginning of this year to no longer spell out the "Institute of Chartered Accountants in England and Wales", but use simply "ICAEW".

An ongoing discussion on Linked in about the name change indicates that some members are not that impressed, eg Jonathan White says:

"Removing the term 'Chartered Accountant' formalises the opening up of control and use of the organisation to non-qualifieds, primarily the employees. Although in reality this is a situation which already exists as Graham says.

The removal of national terms, 'England and Wales' in this case, has been done to aid the 'globalisation' process they are so obsessed with and inevitably will lead to the ICAEW assisting people abroad to take the work of members here in the UK."

What do other members think?

Advice To The Members of The ICAEW and ACCA

I don't think the comments being levelled by some members of the ICAEW and ACCA at each other, as summarised in Accountancy Age, do anyone any favours.

Size does not matter.

This isn't a pissing contest!