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CIPFA and ICAEW: Izza answers

19th Jul 2007
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Michael IzzaPosted by Michael Izza, chief executive, ICAEW

Earlier this week an article by Ken Frost appeared on your website which raised a number of issues around the Memorandum of Understanding the Institute recently signed with CIPFA. I wanted to take this opportunity to respond.

First let me say that while I am flattered by the picture Ken presents, I have resisted the temptation to surround myself with acolytes and operate from a bunker, on the basis that I have a capable management team and my office on the 5th floor at Chartered Accountants Hall is less claustrophobic.

Let me try and deal with the broader points raised by the article.

The signing of the Memorandum of Understanding with CIPFA
The Institute signed an MOU with CIPFA at our Council Conference on Friday 29th June and pre-briefed journalists on 2nd July under embargo for 6th July. The reason for doing so was that the two main weekly trade titles for the public and private sector accounting profession both publish on a Thursday. The 6th July was the first Thursday after the signing and it therefore made sense to make the announcement on this date. I am glad to say that the story did not leak during the intervening week and that the story was published on our website on 6th July.

Merger by the back door?
In 2005 the Institute narrowly lost a member vote to integrate with CIPFA albeit that a significant majority of our members were in favour of the proposals (just under 67%). When I took over as CEO I made four unequivocal points intended to underscore where I stood on this issue. Let me reiterate them:

1) I am in favour of the principle of consolidation.
2) The Institute needs to respect the democratic decision that was reached in 2005 and it would therefore be premature to put a member vote back on the table in the short term to medium term.
3) Moreover as an Institute we also have too many important priorities, such as the launch of our revised ACA, to be distracted by another vote.
4) Nonetheless there are a number of strategic benefits to be had from closer working relations with CIPFA which we can exploit through strategic partnership.

It is easy to concoct conspiracy theories. Judge me on what this partnership delivers.

The Institute remains fully committed to working with the CCAB. As professional bodies we will compete where we need to and make common cause where it is in the interests of members.

CIPFA and the MOU
Ken suggests that ‘CIPFA almost state (that the MOU) is a route to merger’. At the risk of accusing my accuser of spinning, either you state something or you do not. Partnership by definition implies two parties. The governing Councils of both Institutes have committed to aligning on a project rather than an operational basis where it is in the public interest to do so. I believe this makes common sense.

The Institute has recently invested a significant amount of time and resource into promoting the ACA qualification through a variety of different mediums including the Financial Times and the Economist as well as running advertising in tube stations and taxi cabs. We have done so because we believe that it remains the qualification for business leadership and we want to be more robust about promoting this message.

The article suggests that the Institute should be spending more time bringing ethics to the forefront of the qualification. I agree - which is why a defining feature of the new qualification is that ethics is now examined across the whole syllabus. The Institute has also just published its revised code of ethics, putting this agenda at the heart of the profession.

The Constitution
Ken raises a number of issues to do with our current constitution. While I am not in agreement with these points I would urge him to stand for Council and make his voice heard.

As in coming CEO I am keen we have a more grown up debate about the Institute. To this end I would be happy to meet with him to see if we can put some of these issues to rest.

Michael Izza
Chief Executive
The Institute of Chartered Accountants in England and Wales


Replies (4)

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By kenfrost
21st Jul 2007 11:10

Reaction fromThe ICAEW Bunker

for my response


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By AnonymousUser
24th Jul 2007 01:16

Hear (him) hear (him), hear hear, here:
To me, the use of the word "premature" is at the very best, premature and the word "grownup" appears to have been immaturely and poorly chosen.

Further, an open invitation to a private debate is just not cricket so I hope Michael Izza and Ken Frost will continue to expound their reasoning here.

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By User deleted
30th Aug 2007 11:03

Allow me these points
Dear Izza, I feel that the ICAEW should sign up many more MRAs with reputable CPA Insitutes such as the AICPA, CPA Ireland and CICPA. I believe this route to gain members should be more easier than absorbing members from the UK bodies and the cost involved is much lower too.

I am sure the CPA Ireland and CICPA would wish to consider favourable this appealing MRA, except for AICPA. Perhaps, an open door policy for AICPA to be admitted to ACA direct would in the long run see the results of a MRA between AICPA and ICAEW.

Start off small like the CPA Ireland and China and see how things goes.

I hope you would consider listening to what I said and implement it fast as ACCA membership is fast catching up with ICAEW's.

Thank You.

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By AnonymousUser
16th Oct 2007 09:41

CIPFA and truly auditing bodies
CIPFA (including AIA) are still new to the audit scene, though AIA has been long recognised since 1994. Both has no impact on the audit fraternity. Except that CIPFA has got government audit recognition, and is this what it take ICAEW to turn their heads on?

I say with certainty, that it should be the true auditing bodies that ICAEW should turn their heads on. I say true auditing bodies such as CPA Irish, ACCA, ICAS, ICAI are the ones that should fall into the merger with ICAEW or absorption or MRA without conditions.

Let's forget the "lesser" ones such as AIA and CIPFA.

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