SHOULD THE PROPOSED MERGER between the New Zealand and Australian accounting institutes prove successful, the ICAEW and CIPFA will no doubt be left with a feeling of what might have been.
The failure to unite the UK’s largest and smallest institutes back in 2005 – when the ICAEW fell agonisingly short of the two-thirds majority required to push the merger through – was another setback in a long line of attempts to bring the UK’s various accounting bodies together.
Now, the Institute of Chartered Accountants in Australia (ICAA) and the New Zealand Institute of Chartered Accountants (NZICA) are attempting the arguably more ambitious feat of a cross-border merger – the first of its kind – to create a new joint trans-Tasman body.
Lee White, ICAA chief executive officer, is confident the institutes can overcome the hurdles that have blighted similar initiatives in the UK. While on these shores taking soundings from UK-based members on the proposed new institute, White told Accountancy Age there is optimism around the proposal.
For one, the two institutes have a long history of joint initiatives. Just over two years ago, that relationship was extended into collaboration on education – they now have a joint chartered accountants programme – technology platforms, opportunities for products and services and an examination of the best Asia strategy for the two memberships.
“It’s a mix of the shared history of the two institutes, the opportunities that a new institute could provide and some common ground,” White explains.
“As well as both being members of the Global Accounting Alliance and having shared values, as we have similar memberships (including member needs and demographics) and aspirations for the profession in our region and globally.
According to White, the new body – which would be made up of around 90,000 members – would have a stronger voice in the profession, the market, with regulators and in the community. The scale and cost savings associated with the tie up – estimated at between A$5m to A$10m annually – would allow the combined institute the to improve its educational services and increase its policy formulation, advocacy capability, and global influence.
“To make the core aspiration of the institute come alive we need to make the model broader than traditional areas. We want the brand to be seen as a key business brand,” White says.
The timing is also right for a combination of this kind, White says. Globalisation is changing the make-up of membership bodies all around the world, while the likes of CIMA and AICPA launched a joint venture last year and Canada is considering unifying its accounting designations.
Indeed, the growth in global membership of the seven main UK accountancy bodies outstrips domestic growth, while total numbers of students – a key benchmark for the attractiveness of the profession – increased by 2.3% worldwide, but experienced a 3.3% drop in UK numbers over the past year, according to figures compiled by the FRC.
White sees Asia as an emerging battleground among global institutes for new members, with the ICAEW “pushing heavily” into the region.
“At the broadest level the combination does give us a stronger platform and broaden our presence in Asia,” he says.
The proposal is currently out for consultation among the two institutes’ members. Should it get the go-ahead, the UK accountancy bodies should take note. A stronger global profession will better support the financial integrity underpinning the world capital markets.
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