and Tom Glancy add up the benefits
A reduction in the number of accountancy bodies in this country from six to five may not appear dramatic, but it would be a major breakthrough in attempts to rationalise the accountancy initiative in the UK and Ireland. Lastweek we announced the first step in that process as the councils of our two institutes endorsed the principles for merger of the Chartered Institute of Management Accountants (Cima) and the Institute of Chartered Accountants in England & Wales (ICAEW).
The current structure of the accountancy profession is crying out for change. The existing six bodies overlap, duplicate, compete, co-operate (sometimes) and confuse. Our messages to the Government and to Brussels are sometimes contradictory, often diluted and rarely pack the punch they should. Government ministers have called for rationalisation of the profession and Brussels is bemused by the plethora of accountancy bodies.
Much of last year was spent debating proposals for a radical restructuring of the profession - the Bishop proposals - which would have created three new geographical Institutes of Chartered Accountants out of the existing six bodies. Unfortunately, only three of the six were willing to develop those proposals: the ICAEW, Cima and the Institute of Chartered Accountants in Ireland.
These were the bodies that showed the greatest commitment to change. Parallel market research by Cima and the ICAEW showed members of both bodies wanted restructuring of the profession taken forward on a bilateral basis, if the six bodies could not agree. As a result, our councils agreed to hold exploratory talks to establish whether a merger was feasible.
Those talks have been successful. A basis for negotiation has been agreed and the detailed work involved in developing formal proposals for the merger now begins. We expect to be asking members to vote on those proposals sometime next year. Maybe 12 months after that, the ICAEW and Cima would be wound up and members of those bodies would become members of the one new body.
If the merger goes ahead as planned, there would be one new body with around 150,000 members. Although wehaveyet to determine a name for the new body, we do have proposals for members' titles. We have moved away from the Bishop proposals, which called for all members of the restructured profession to be called chartered accountants. We propose, however, that within the single body there should be two titles: chartered accountants and chartered management accountants. Existing members of the ICAEW and newly qualified members of the new body who trained in practice would have the title chartered accountants. Existing members of Cima and newly qualified members of the new body who trained in business would be chartered management accountants, subject to Privy Council views.
There are strong reasons for retaining two titles. Market research showed that younger members of both bodies were inordinately proud of their titles and were not in the least keen to share them with members of other bodies. Furthermore, the distinction between the two titles is easily understood, and tying a member's description into his or her education and training should help to reduce the confusion in the minds of employers, clients and other external audiences.
The education and training of chartered accountants and chartered management accountants as well as the governance of the new body and its financing are just some of the major areas that will require a huge amount of work over the forthcoming months before members can be asked to vote on the detailed proposals. The proposed new structure provides two separate but equal divisions - for those in business and those in practice - which should enable the new body to get closer to members' needs and provide members with a sense of empowerment and democratic participation.
The new organisation should have the ability to deal more effectively with public interest issues, have the authority to represent and promote accountants wherever they work and have the scale to offer cost-effective services and support to members in an ever-widening range of careers. We strongly believe that this merger can benefit not just members of the two bodies, but also their employers, clients and business generally.
Roger Lawson is president of the Institute of Chartered Accountants in England & Wales and Tom Glancy is president of the Chartered Institute of Management Accountants.Reuse content