E&Y quits English ICA.

Ernst & Young dealt a savage blow to the English ICA this week by becoming the first Big Five firm to carry out threats to withdraw students from the institute’s training scheme in the wake of last summer’s electives debacle. In a move that caught most of the profession by surprise, E&Y said it would train all its chartered accountant students through the Scots ICA from this autumn. KPMG head of assurance services Ted Awty said the firm’s new employees would be ‘strongly encouraged’ to take the Scottish route, adding: ‘The situation remains under review.’ Other leading firms said they would also consider their positions. The decision came within days of the latest attempt by the English ICA to modernise its syllabus. A weekend council meeting agreed a more business-friendly syllabus which stopped short of including the optional ‘elective’ papers which were rejected by a ballot of members last summer. E&Y and other large firms had seen electives as vital to the qualification’s future and had threatened to withdraw their trainees if options were not introduced. The Big Five provide 60% of English institute trainees, and if other firms follow E&Y’s lead, its long-term future is in serious doubt. E&Y provides the smallest number of trainees in the institute’s training scheme but nevertheless its annual student crop forms about 7% of the 4,000 students trained by the institute each year. ‘We are very impressed with the Scottish institute’s model,’ said Geoff Norman, the firm’s national head of audit. The announcement marks a major coup for the Scots ICA which has introduced flexible and optional papers for trainees. Acting chief executive Ian Marrian said: ‘We are not competing as such. E&Y came and spoke to us.’ E&Y becomes the biggest customer of the Scottish institute, increasing overall numbers from 400 to 650. English ICA education director Brian Chiplin said the institute’s new qualification would address concerns about business content and added: ‘We have no evidence that anybody else will follow suit.’ But PricewaterhouseCoopers, Arthur Andersen and Moore Stephens said they were also offering ICAS training in addition to the English institute. Grant Thornton and Levy Gee both said they were monitoring the situation.

Related reading