Fit for purpose

During 2009 this magazine printed a profile of myself in which I stated that I was many things, not least chief executive of a public company. The thing of which I was most proud was being a chartered accountant. Indeed that is how I describe myself on my passport.

Something has perplexed me over the years. I hear accountants moaning about the profligacy of the Institute and fees but don’t complain to the president. Accountants are supposed to be frugal and look after both their and their clients’ money. It is a disgrace when the ICAEW doesn’t set an example and show similar prudence.

The accounts of the ICAEW reveal several interesting facts. 600 people are employed on an average salary of £45,000 per annum. Most commercial organisations are moving to defined contribution pensions but they still have a defined benefit scheme. I am surprised how much the chief executive pays himself for presiding over this overstaffed bureaucracy (in 2008 £425,000 plus the final salary scheme).

The ICAEW it appears has acquiesced to a few cranks who feel the Institute should provide the unnecessary. Information on the economy, which most members never read, is probably done better elsewhere, not least by the four major firms of chartered accountants in this country. The Institute should have a limited role and chartered accountants wherever they may be should attempt to restrain the excesses. They should be confined to:

* maintenance of the register of members;

* examination of potential new chartered accountants;

* maintenance of professional standards and discipline of the occasional member that errs;

* communication to chartered accountants on accounting standards and other relevant factors which chartered accountants require in their job in industry or in their profession;

* advice on how to charge for their services.

I see no advantage to the members in England and Wales in having a Singapore office and various other offices throughout the world. I would have thought a hundred staff maximum could do the job that is required. Perhaps a member might care to stand for the council on the manifesto that 80% of what the Institute produces is superfluous. Failing that, perhaps members who don’t like the profligacy will write and express their dissatisfaction. I have written and expressed my dissatisfaction but I am just one chartered accountant. The latest accounts show there are now 133,000 members. Even if they paid half the fees they pay at the moment that is considerably more than a well run institute would need to provide more than what is required.

what not to do

“The institute only asks people what they want. I’ve told [chief executive] Michael Izza you ought to ask: ‘What do you not want?’ They provide lots of things because a few people ask for something. They produce lots of stuff most don’t actually want – they should really find out a consensus of things. They should also work at improving the image of the accountant. That’s what the institute should do. Accountants are not valued.”
Peter Hargreaves, July 2009.

Peter Hargreaves is chief executive of Hargreaves Lansdown