The institutes might now be too small and weak in comparison with a new big four firms, leading the Department of Trade and Industry to conclude that a new statutory regulator could be necessary, Cima predicts.
"It remains to be seen what will happen with the mega-mergers being proposed," says Peter Layhe, senior vice president of Cima.
"The profession as a whole might be looked at. They are going to be monumentally powerful companies when they merge. It may open a debate on the adequacy of self-regulation under which all of the six bodies are presently operating. It may raise questions of whether self-regulation is powerful enough if the big six become four." While amalgamation of the accountancy institutes might give them the robustness to withstand a proposal for external regulation, Cima has given up all hope of mergers for the foreseeable future.
It says that rumours that it could merge with the Chartered Institute of Public Finance and Accountancy, Cipfa, are well wide of the mark.
"We will remain independent," says Mr Layhe. "So much mayhem was caused by the attempted mergers that we and the other institutes have to conclude that rationalisation, which is desperately needed, is off the agenda. If anyone was designing a structure we would not end up where we are, but any reform is a long haul."
The death knell for amalgamation of the institutes was sounded when members of both Cima and the Institute of Chartered Accountants in England and Wales voted down their merger proposal. "Both councils recommended it, but the members were against it," Mr Layhe says. "They are the biggest and most powerful institute, and if rationalisation with them is not possible then that is it.
"No negotiations are afoot. We are told that Cipfa has its problems, but we don't know and we haven't asked."
With no apparent prospect of rationalisation, Cima has decided on a clear-cut policy of expansion by competing more aggressively with the other institutes, particularly against Cipfa. By concentrating on a financial management qualification, and not seeking to represent auditors, Cima says its qualification is the most portable. "Cima-qualified accountants have no difficulty in working in the private sector - in manufacturing or services - and are making increasing inroads into local government and the health service," Mr Layhe explains. "The public sector is a market where we have no doubt our training is very good. It is a market we have definitely approached." Mr Layhe believes that the continued reforms of local government and the NHS, bringing commercial practices into the services and attracting private finance, play to Cima's strong hand.
Meanwhile, he says, Cipfa is losing members through the growing trend in the public sector of externalising finance departments.
Cima says that it is attracting rising numbers of students, with an 8 per cent increase this year. It now has 100,000 students and members, making it still much smaller than the ICA, and little more than half the size of the Association of Chartered Certified Accountants, but much larger than Cipfa. Starting salaries for Cima-qualified accountants are in line with those of the other institutes. It claims that a recent survey by the Robert Half employment agency, which found that half of employers preferred a Cima qualification to those of the other institutes, shows that its strategy of producing a strong and practical training programme is working.
Where Cima is acknowledged to score over the other institutes is in the quality of its research. This reflects a conscious decision to promote itself and its members through the publication of its research programmes, which it believes produce genuinely relevant assistance to accountants in both the private and public sectors. Its Research Foundation has an annual budget of pounds 300,000, and awards grants for individual pieces of research of up to pounds 40,000.
As well as traditional research projects evaluating the benefits of management accounting techniques and examining good practice in information technology, Cima has also placed a priority on studying how environmental management can be integrated into management accountancy.
"We have done more work on environmental accounting because our members in manufacturing are face-to-face with the demands made on companies to improve their environmental performance," Mr Layhe explains. "When you look at these pollution-generating areas you find there are different ways of dealing with them.
"Improving technologies not only gives them reductions in costs, improving their bottom lines, but also remove them from the risk of penalties [fines]." Cima says that it would like to co-operate more with the other institutes but it believes the prospects for doing this without merging are very limited. The alternative is to give itself a harder competitive edge - and the signs are that it is doing precisely that.Reuse content