RegulationAccounting StandardsFit for purpose

Fit for purpose

Accountants are supposed to be frugal, but the ICAEW is over staffed and profligate

During 2009 this magazine printed a profile of myself in which I stated that
I was many things, not least chief executive of a public company. The thing of
which I was most proud was being a chartered accountant. Indeed that is how I
describe myself on my passport.

Something has perplexed me over the years. I hear accountants moaning about
the profligacy of the Institute and fees but don’t complain to the president.
Accountants are supposed to be frugal and look after both their and their
clients’ money. It is a disgrace when the ICAEW doesn’t set an example and show
similar prudence.

The accounts of the ICAEW reveal several interesting facts. 600 people are
employed on an average salary of £45,000 per annum. Most commercial
organisations are moving to defined contribution pensions but they still have a
defined benefit scheme. I am surprised how much the chief executive pays himself
for presiding over this overstaffed bureaucracy (in 2008 £425,000 plus the final
salary scheme).

The ICAEW it appears has acquiesced to a few cranks who feel the Institute
should provide the unnecessary. Information on the economy, which most members
never read, is probably done better elsewhere, not least by the four major firms
of chartered accountants in this country. The Institute should have a limited
role and chartered accountants wherever they may be should attempt to restrain
the excesses. They should be confined to:

* maintenance of the register of members;

* examination of potential new chartered accountants;

* maintenance of professional standards and discipline of the occasional
member that errs;

* communication to chartered accountants on accounting standards and other
relevant factors which chartered accountants require in their job in industry or
in their profession;

* advice on how to charge for their services.

I see no advantage to the members in England and Wales in having a Singapore
office and various other offices throughout the world. I would have thought a
hundred staff maximum could do the job that is required. Perhaps a member might
care to stand for the council on the manifesto that 80% of what the Institute
produces is superfluous. Failing that, perhaps members who don’t like the
profligacy will write and express their dissatisfaction. I have written and
expressed my dissatisfaction but I am just one chartered accountant. The latest
accounts show there are now 133,000 members. Even if they paid half the fees
they pay at the moment that is considerably more than a well run institute would
need to provide more than what is required.

what not to do

“The institute only asks people what they want. I’ve told [chief executive]
Michael Izza you ought to ask: ‘What do you not want?’ They provide lots of
things because a few people ask for something. They produce lots of stuff most
don’t actually want – they should really find out a consensus of things. They
should also work at improving the image of the accountant. That’s what the
institute should do. Accountants are not valued.”
Peter Hargreaves, July 2009.

Peter Hargreaves is chief executive of Hargreaves Lansdown

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