INSTITUTES REJECTED CIMA’s request to bring in an arbitrator to renegotiate the costs of funding the forum of professional bodies.
After quitting the Consultative Committee of Accounting Bodies (CCAB), CIMA explained that its members were paying a “hugely disproportionate amount” towards the body. However, CIMA’s request to renegotiate the fee structure through an arbitrator was turned down by the other institutes: the ICAEW; ACCA; ICAS; ICAI; and CIPFA.
“We were unable to convince our CCAB colleagues of this,” said Robin Vaughan, CIMA executive director, governance and professional standards.
“We couldn’t discuss this forever, so we brought a close to the argument.”
Under a seven-year agreement, the institutes had set a tariff to provide funds to the CCAB and accounting regulator the Financial Reporting Council.
The agreement allowed for a revisit of the structure two years ago, which CIMA requested. CIMA argued that the audit focus of both the CCAB and the FRC left the institute with a disproportionate bill, based on its focus on finance professionals in business. It paid out £1.5m in fees to accounting regulators from a total of £2.8m on professional standards, according to its 2009 accounts.
“[That was an] extraordinarily disappointing end to the journey, that we didn’t want to reach,” said Vaughan. “The CCAB is excellent, but had diminishing value for us.”
CIMA has ended its payments to the CCAB, but is still making payouts to the FRC. CIMA has asked the FRC to set the wheels in motion for a statutory framework under which all institutes’ payments to the body are set.
“We’re very confident our case is a good one, but we’re not in the business of saying ‘we’re not going to pay up’,” Vaughan added.
CIMA’s influence through European accounting regulatory bodies will be undiminished despite quitting the CCAB, said Vaughan. Instead, CIMA will be more “more energetic and distinctive” in being able to represent its views.
To have a voice in the CCAB required agreement from all six bodies – “that drives you to the lowest common denominator”, said Vaughan.
“We might have had an energetic point that can’t come out, [now] you’ll hear our distinctive and authentic voice”.
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