Exam tussle at English ICA

The English ICA’s rigorous examination process is regarded as something of a rite of passage by most of its members. Any move to change the system is therefore bound to come under scrutiny as misty-eyed accountants recall late nights studying and the camaraderie of fellow trainees forged by three or four years of shared suffering.

But the institute’s education and training directorate says reform is essential, and is asking members to approve a radical overhaul of the examination system, including, for the first time, the introduction of a series of optional papers, which it has called ‘electives’.

These will be introduced at the second of a new three-stage process. Candidates will be asked to select two papers from a list of specialist areas – including business finance, assurance, taxation of individuals, taxation of larger enterprises and two general practice papers. All other papers in the revamped system will be common to all candidates.

The institute’s E&T directorate is hoping members will not reject the idea of electives when they vote on whether to accept them – voting papers have already been sent out.

Electives have already met with opposition from some members who say their introduction will destroy the common bond that binds all institute members together.

Peter Wyman, chairman of the E&T directorate, urges members to think carefully before voting against them.

He argues that the system needs to reflect the requirements of accountancy firms and the increased specialisation of the business world.

‘Thirty years ago we did not have complex company law. Tax law was one tenth of what it is now, so we would have expected the vast majority of chartered accountants in practice to be doing largely the same thing. Therefore we could have a syllabus that applied to all.’

But now, in these days of ever growing specialisation, Wyman argues the examination system has become more theoretical and less relevant to what accountants and trainee accountants actually do in their working lives.

Rather than lumping them all in general practice, most big firms now employ trainees in one of an increasing number of specialist departments.

The introduction of electives, Wyman argues, will allow trainees to demonstrate their skills in the areas they deal with in their day to day work.

Electives, he continues, will therefore make the examination and training of accountants more relevant, both to trainees themselves and to their employers – the ones who pay to put their employees through the institute’s system.

‘We have to listen to the people who are bearing the costs,’ he says, arguing that many big firms reckon they simply aren’t getting value for money. And with the estimates of the cost of training an accountant approaching £100,000, there are huge sums at stake.

He also points out that electives are only a small part of the new system, and that the bulk of the exams, designed to give all trainees an understanding of core accountancy principles and business issues, will still be common to all trainees.

But the very notion of electives arouses passionate opposition among some parts of the institute’s membership.

A new syllabus put forward in 1996, ‘Core and Options’, which attempted to introduce some optional papers, was resoundingly rejected.

The member who led calls for the 1996 ‘no’ vote – Merseyside sole practitioner John Cook – is already whipping up opposition to the new plans.

He is introducing a motion at next month’s institute agm urging all members to vote against electives.

He comments: ‘The heart of the institute’s brand lies with its qualification, the point of admission to membership. Its strength comes from its similarities rather than its differences, and in particular the combination of the rigour of a common set of examinations with the cut and thrust of work experience in the provision of arm’s-length services to a variety of clients.’

Recognising that many of the institute’s members sympathise with Cook’s views, a second option is also being offered to members.

This allows them to approve the bulk of the reforms, but with the electives axed in favour of two advanced papers common to all candidates.

Cook is urging members to vote for the non-elective option, and for an additional motion he has put forward opposing the idea of optional papers in any shape or form.

But many leading firms are making it clear that they see the electives as a vital part of the reform package – and want members to vote for the whole caboodle – including electives.

Some are even threatening to stop putting their graduate recruits through the institute’s training if the membership votes against electives.

If this threat were carried out, even partly, the institute would be dealt a potentially fatal blow, and current members could see the prestige of their qualification take a dive.

The institute currently trains about 4,200 new students a year, of which the Big Five firms alone count for 60%.

Meanwhile, rival professional bodies circle vulture-like on the sidelines, ready to swoop on any opportunity to pick up trainees from the prestigious big-name firms.

The Scots ICA, ACCA, CIMA and the Chartered Institute of Taxation have all been displaying their wares to the firms over the last month.

Indeed they have been quietly picking off new trainees from English ICA firms over the last decade.

Wyman, who himself is a partner in the UK’s largest firm, PricewaterhouseCoopers, says: ‘Small firms are training more ACCAs and less institute members, and many Big Five recruits now don’t train with the institute.’ Only 25% of a larger firm’s trainees, he reckons, are needed for a firm’s core legal audit needs. He also points out that it is not inconceivable that the government might grant the right to do audits to more professional bodies than at present.

‘Now the brands of the larger firms are so good, they could still attract people but offer alternative training. Small firms have already largely voted with their feet, and the big firms could follow.’

KPMG, the UK’s second-biggest firm, could be among these. Ted Awty, head of audit, says: ‘In the event that the membership prefers not to have electives, we will have to re-assess our position.’

He adds: ‘There is no doubt that the Scots ICA training programme is interesting and I would not be averse to putting more people through it.’

KPMG is among a number of firms, both Big Five and mid-tier, which already puts relevant graduates through Scots ICA exams in London.

KPMG was also involved in a recent meeting of London training managers from different firms to which the institute’s rivals were invited to outline their training programmes.

Accounting trainees themselves have mixed views on electives. The response to the proposals from the institute’s students’ body says many trainees do not oppose the idea in principle, but are concerned that employers will dictate their choice of electives regardless of their wishes or career aspirations.

Members looking back at their training days with nostalgia and tempted to vote in a knee-jerk fashion should perhaps think carefully before they decide whether they are really pro or anti electives.

If the institute’s E&T and the posturing of the big firms is to be believed, then the institute is facing a choice; reform the way it trains its members now, or die a slow death.


The English ICA is asking members to approve reforms to its examination system, which it says will ensure the qualification is as successful in the future as it has been in the past.

As part of a comprehensive overhaul of the system, the institute wants to introduce a series of optional papers, called ‘electives’, in the second part of the planned three-stage system. Candidates currently sit common papers throughout the examination process.

The institute is also offering members the option to approve the bulk of the reforms, but without electives. Under this option, less favoured by the institute’s education and training directorate, electives will be replaced by two compulsory papers.

Voting papers have been sent to members and the result unveiled at the institute’s agm on 8 June, where members can also vote on the proposals.


1. Professional Stage Covers principles and concepts of all accountancy disciplines, including accounting, financial reporting, business finance, auditing, business finance, business management and personal tax.

2. Advanced Stage A compulsory advanced business management paper and TWO elective papers chosen from a list including tax, auditing, business and general practice papers. Under the second option, the electives will be replaced by two advanced papers common to all candidates.

3. Final Admitting Exam A multidisciplinary business advisory case study.

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