And we are not talking external changes here, although plenty of those abound, too. Until now the complete picture regarding the UK accountancy profession has been more than a little murky. Institutes have published their own data – some more than others. But for the first time a clear, and complete, picture is emerging.
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And according to the new research, published exclusively by Accountancy Age this week, the death knell could soon sound for some of the traditional accountancy institutes.
Unless, of course, they can find a way to turn around the changing tides. And fast.The research has been compiled by the new regulator, the Foundation’s Review Board, and is expected to be published in full later this month. It is based on data supplied by each of the six accountancy bodies in the UK and Ireland.
And it reveals problems not just for the ICAEW and ICAS, but for public sector institute CIPFA too.
The good news first
But first the good news. The most rapidly growing accountancy body since 1996 in terms of membership is ACCA, which has expanded by 52.3%. Perhaps surprisingly it is the Irish chartered institute, the ICAI, that comes in second, posting growth of 27.4% since 1996.
Andrew Harding, executive director of ACCA UK, isn’t surprised by the growing numbers of certified accountants.
‘There’s a combination of things…we’ve worked hard to ensure our qualification is relevant to all sectors, industry, practice, public sector etc,’ he says.
‘And we’ve listened to the marketplace to see what it wants in terms of skills.’It has clearly paid off. ‘What we’ve seen over the last few years is that the qualification is becoming more attractive to the corporate sector. ACCA is now being seen by employers as being equal to the ICAEW qualification.
‘We’re seeing that in salaries and the corporate world is telling us so.’Heather Briers, ICAI director of quality assurance, puts her institute’s exceptional growth rate down to the Celtic Tiger phenomena, as well as the CA qualification.
‘Despite all the scandals, the demand for accountants is still big,’ she says.
‘And after all it’s a premier qualification. We’ve noticed no diminution in demand for chartered accountants in Ireland.’
Poor growth at ICAEW, ICAS
Compare that strong growth with the ICAEW and ICAS, which have expanded by just 9.7% and 6.4% respectively since 1996.
Christine Waugh at ICAS says: ‘It’s determined by the very strict structured training programmes, which mean you can only train in limited places.’
And as for the ICAEW, despite the slow growth, it still boasts the highest membership in the UK and Ireland for 2001. Its membership numbers stood at 105,804 last year, while ACCA boasted a comparatively paltry 49,085. The Irish ICA comes in last with just 11,196 members.
Altogether the accountancy bodies have over 237,000 members in the UK and Republic of Ireland, a total that has grown by an average of 3.9% in recent years.
But it’s not just the institutes that are changing. The research also reveals how the traditional role of the accountant is also undergoing a nothing less than a transformation.
Changing professional needs
Traditionally accountants have predominantly worked in public practice. However the Foundation’s Key Facts and Trends document reveals clearly that accountants in industry and commerce far outweigh those in public practice.
The trend has been developing since 1996 when there were 63,996 accountants in public practice and 106,637 in industry and commerce. But the gap has now widened with 79,267 accountants in practice but a hefty 139,239 members in industry. The figures are compiled on a worldwide membership basis.
Between 1996 and 2000 the numbers of members employed in industry and commerce showed an annual average increase of 6.9% compared with a rise of 5.5% for those in public practice.
According to Briers the ICAI now has over half of its membership in industry and commerce.
‘About 60% of our membership move out to business,’ she says attributing the growth to the flexibility of the CA qualification.
From an ICAS perspective, Waugh says: ‘For many years we’ve had that ratio between public practice and industry. Obviously people may train in public practice but tend to move over to business.
I don’t think the proportion has changed that much.
Very few employed in practice
‘One of the reasons people go into accountancy is because the qualification is so flexible enabling people to move into business,’ she adds. Very few members of CIMA and CIPFA are employed in practice. But it’s not surprising: neither body has recognised qualifying body status, which allows members to work in reserved areas such as audit, insolvency and investment business.
The Department of Trade and Industry is, however, considering an application by CIPFA to change that – expect the institute’s practice membership to grow if that succeeds.
Gender stereotypes are also changing. Traditionally the bastion of men, the profession is now actively working to attract more women into the profession. The efforts are clearly paying off.
The percentage of female members of the six accountancy bodies has risen from 18% to 24% from 1996 to 2001.
However, a comparison with solicitors and hospital doctors suggests the accountancy profession has proportionately fewer female members.
It can’t be a coincidence that the fastest growing institutes are those that also lead the way in female membership. The percentage of membership of females worldwide with ACCA and the ICAI is 35% and 25% respectively.
The ICAEW is last with a rate of only 19% female membership.
Harding says the popularity of ACCA’s qualification amongst women is due to its flexibility. It allows students to take career breaks and change jobs as long as all the exams are completed within a ten-year period.
‘The reason is the flexibility. The ACCA qualification allows women an opportunity to combine it with other commitments,’ he explains.
And female accountants can take heart with findings from a careers survey published last month by Accountancy Age/Robert Half showing that there has been progress as far as pay is concerned.
The research revealed that a male finance director on average earns £55,965, a female FD’s average pay package now extends to £58,750. And while female partners earn £50,714 a year, the survey shows male partners earn £46,477.
Briers puts the ICAI’s success in this area down to societal changes as much as active promotion of the brand to girls in schools.
‘It has always struck me that accountancy is hugely suited to females. I do believe that women have great analytical skills; a natural inquisitiveness that encourages us to delve.’
And Briers feels quite confident that the trend will continue.
‘Now 55% of our students are female. In ten years that will go up again considerably,’ she enthuses.
Could it be in ten years’ time a conference of accountants will no longer appear to be a sea of balding, upper-middle class grey suits, but a more colourful mixture of genders?
Maybe. But without a doubt the profession is changing. And these changes are driven as much through external causes – developments in society, changing business trends and regulations. How the profession reacts to these changes will determine who remains in the running.
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