The merger: what direction now?

A signal to go it alone

So, the ICAEW’s members have voted against merger with another body. But the
institute’s press comments put a slightly different spin on it – they say the
ICAEW voted for the merger, with the will of the majority thwarted by the
minority.

If the institute is correct, then another merger attempt should follow suit,
but is this really the answer? Wouldn’t it be far better to examine the reasons
why so many voted against the merger when the organisation expended so much on
the campaign?

ICAEW senior staff have worked tirelessly, some exclusively, on the merger
this year. To restart a campaign risks sending ‘campaign weary’ troops to fight
a newly emboldened opposition.

It has been an eventful couple of years for the ICAEW. Many problems have
been internally generated: the strategy, fee increases well above inflation, a
sceptically received quality assurance regime (practice assurance) and forcing
all members to carry out CPD.

At the same time, many members have felt that external shocks have not been
opposed strongly enough by the institute – in particular, money laundering and
UITF 40.

None of which would have mattered if the campaign had been fully effective
and well led. Sadly, despite words of caution from many insiders, there was
considerable pressure to get the vote over with, especially after the
significant fee increase vote. As a result, despite there being no reason for
ICAEW members to vote against the proposal, a significant number did and would
do so again.

No-one likes to be snubbed, but a true leader should accept that they have
failed and determine why. Only time will tell whether or not the ICAEW is good
at such self-analysis. Having an experienced CEO might make a difference this
time.

The institute continually emphasised that the merger was merely an
‘accelerator’ to achieving the agreed strategy. If members don’t want to merge
with CIPFA, perhaps now is the time for the ICAEW to concentrate on implementing
its strategy alone.

Terry Cook is chairman of lobby group Private Sector Partners NW

A step in the right direction

The close-run attempt by the ICAEW to merge with CIPFA was a step in the
right direction, signalling the need for accountancy institutes to work together
to create an integrated profession that speaks and acts as a unified body in the
UK and worldwide.

UK accountancy standards and structures are fast becoming adopted elsewhere,
enabling global financial activities to be presented, evaluated and compared on
a consistent basis. Harmonisation with these standards is a principal driver
within international financial affairs today, with extraordinary associated
events taking place throughout Europe, the Far East – and particularly China.

Domestically, it is incredible that our profession remains fragmented. How
can we gain our government’s respect or attention if we are disunited?
Individual institutes lack the clout to mount an effectivechallenge at the
highest level.

Our profession must lead, not follow, and should be more proactive towards
government to help avoidill-judged law or regulationbeing imposed.

Unhappily history has repeated itself with the latest attempted integration –
one institute failing to swallow another as disaffected members vote down
proposals because ‘identities will be lost and qualifications diluted’.

Choice of a suitable integration model is paramount to success, and SPA has
long suggested that this should be an umbrella body, within which all accounting
institutions gather.

The nucleus already exists – the CCAB. This ugly duckling could be turned
into a beautiful swan, called something like ‘The Federation of Professional
Accountancy Institutes’, and, if prefaced by ‘International’, a worldwide body
could emerge.

Integrating our profession will take time – several years certainly – but a
start can be made now by inviting all concerned institutes to discuss how
matters may be taken forward. It appears the essential enthusiasm to make such a
body a reality already exists with various institutes recently echoing such an
approach.

Shall we begin?

Peter Mitchell is chairman of the Society of Professional
Accountants