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Focus on the ICAEW: Izza's first 100 days. By Rob Lewis

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28th Mar 2007
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March saw Michael Izza finish his first quarter as CEO of the ICAEW. Rob Lewis finds out how things are faring at One Moorgate Place.

Michael Izza landed the job of CEO at the ICAEW because of his “ideas, passion, and energy”, and came into post with the unanimous backing of the appointments panel. From the outset he had been open about his commitment to following the controversial strategies of his predecessor Eric Anstee, architect of the failed CIPFA and CIMA mergers which cost the institute £1.4m. Further division between council and membership seems to have been deemed a necessary evil.

Of course, the post of chief executive is itself a recent development at the institute. It was created in 2003 because, in the words of then president Ian Morris, “we realised the need for firm leadership,” and that statement is probably as close as the Institute will ever gets to an admission that all is not what it could be. Whatever concerns the institute’s board members and former members do have, they’re certainly keeping up a united front. So what might they be worried about?

The numbers game
While the institute’s membership rates aren’t actually falling, it is certainly failing to keep up with the surges occurring elsewhere. A report issued by the Professional Oversights Board of the Financial Reporting Council stated that between 2000 and 2005 ACCA increased their membership by 39% (and CIMA 23%). The ICAEW managed 7.6%, and the figures for 2006 were even worse. This would be a likely area of concern, or so you’d think.

“We’re different organisations with different qualifications which meet different needs,” Izza says. “We also have different ways of admitting individuals into membership and it’s not something I really worry about.”

If this attitude seems blasé, it’s also fairly representative. Nobody on council appears overtly bothered by the ACCA’s ballooning membership.

“Overall, I think it just gives all us accounting bodies greater clout,” says Peter Wyman, head of professional affairs at PricewaterhouseCoopers, and ICAEW President 2002-03. “It increases the influence of UK accountancy over the world.”

But does riding on the coat-tails of other bodies in this way diminish the ICAEW’s status? “It would be very dangerous to consider the ICAEW as some kind of ‘premium brand’”, Wyman cautions. “The other bodies are very good, and when I was president of the Consultative Committee of Accounting Bodies (CCAB), I found the six bodies all worked very well together. The membership issue can be misleading. It’s not a numbers game.”

Why then, had he supported the CIMA and CIPFA mergers, if not to boost membership?

“It would have reduced duplication of effort. The money saved could have been used to do things the institute might not otherwise have the revenue to do, such as invest more in research. The institute has already done some fantastic work in the field of corporate governance.”

Asked how such research really benefited members, Wyman says: “It’s not purely altruistic. If we don’t make a contribution, accountants will find themselves solely in the hands of non-experts.”

Tactics and strategy
If those at the top are reluctant to break rank, the institute has always enjoyed a membership who’ve never been afraid to voice their dissent. One such malcontent is Ken Frost, the Croydon-based owner of www.stopthemerger.org.

He maintains that the institute has no current strategies. “They don’t have strategies, they have a strategy: merger. Everything else is just tactics. They will attempt it again eventually.”

So what has Izza done since taking the reins? In January the institute unveiled its new brand identity, hitherto unchanged for the last 50 years. Brand agency Dragon says it developed the “brand story” with the central idea of “inspiring confidence.” The logo still features the 150 year-old Economia (“with her rod of command, rudder of guidance and dividers of accurate measurement”), but with a clearer, bolder, and more contemporary style.

At a comparatively modest £65k plus roll-out costs, things could be worse. Even Frost had to admit it looked nice, although, he says, ultimately it is just a logo.

The following month Izza officially welcomed in the first members to have qualified through the new Pathways scheme. An Anstee legacy, the Pathways scheme was a recruitment drive which targeted members of rival institutes ACCA, CIMA and CIPFA. Providing they had at least five years’ professional experience, sponsorship from two existing ICAEW members, and passed their Pathways exam, these other accountants could finally earn the right to call themselves ACAs. The Institute said it expected the quality of their continuing professional development was probably a big part of the draw.

Of course all this was dampened somewhat by the well-reported fact that said new members totalled only 65 (with a pass rate of 61%). Dr Raymond Madden, the institute’s executive director of learning and professional development, said he was “delighted by the calibre of these individuals”. But for an institute that saw over 800 resignations in a single quarter last year, 65 new associates doesn’t exactly spell overtime for the Member Services Board.

Unifying alliances?
On its own terms, Izza’s initiatives could be considered a success. However, in terms of the bigger picture, sooner or later he will have to pull something special out of the bag: will that be another attempt at merger, as Frost believes?

Paul Druckman, Wyman’s successor as ICAEW President, who served from 2004-05, says: “I don’t like the term merger, I prefer the word alliance, and I think there may be, but personally I don’t think it will be in the short term.”

Indeed, it is probably far too soon to re-approach either CIPFA or CIMA, with ACCA looking an unlikely partner to say the least, and while Druckman was quick to discount ACCA’s membership, he was frank about the need for action.

“A lot of their membership is in eastern European countries and the like, so it’s not predominantly in the main markets, and secondly a lot of those members are students. Overall, they’ve done extremely well over the years, but we shouldn’t be trying to copy ACCA. We at the ICAEW need to differentiate, and we need to be seen as the leading organisation and the leading qualification. Leading isn’t necessarily where most people are. In fact normally it isn’t, although the ICAEW needs more students, there’s no doubt about that.”

Druckman adds that the rationale was to unify the profession. “We have too many bodies in the UK compared to other countries. I don’t see it as a position for the ICEAW. Again, I don’t like the term consolidation, but unification: unified, the UK profession could be so much stronger.”

Britain does have an unusually high number of accounting organisations. As well as the six members of the CCAB, there are countless regulatory panels, boards, forces and units. Maybe Izza will be able to do something clever here. After all, the ICAEW does carry some influence in these waters, and observers have noticed the sign of Economia’s guiding rudder here and there. Both the domain names for the CCAB and the GAA are registered with the institute, for example.

Is there any truth then to rumours that something is afoot with the CCAB? What of a recent press report that the press were turfed out of chamber when the issue came up in council last week?

Not so, said an Institute spokesman. “Council meetings are routinely divided between public and private business, and anything of a commercial nature is always discussed in private business. The CCAB obviously falls in this category as we compete with the five other bodies. Nobody was asked to leave, it was just decided as a matter of course to discuss the topic in private business.”

Consolidation of professional bodies
Izza himself says that, like Paul Druckman, he believes that consolidation of the professional bodies is in the long term interests of the profession.

“It is something I will continue to explore,” he says, “but it’s not on the top of my list of things to do right now.”

Speaking of the institute’s overall progress, Izza comments: “I’m convinced that we’re moving in the right direction, executing on the four elements of our strategy – increasing our international footprint, aligning with member careers, embracing all sectors of the economy and maintaining our reputation for excellence.”

He also highlights the number of extra services the institute has begun to offer: the new financial services faculty, the new valuation group, and the new practice, business and public sector advisory boards. Compared to the sweeping changes a merger would have affected, these are baby steps, but if Izza can keep making them perhaps they will be enough – for now.

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Replies (11)

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By User deleted
03rd Apr 2007 05:43

Keep it all up all the time
Good , keep it all up all the time for benefit of us for all the good idealistic plans all coming along so good and strategic and managed.

All opposition fail now proven all opposition wrong. Izza sure correct and strategic good too.

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By AnonymousUser
28th Mar 2007 16:16

"Izza" (sounds like a cricketer)

I'm sorry but I have never heard of this bloke. There are so many professional institutes and associations of accountants that the ICAEW is not as important as some people seem to think it is.

If "Izza" wants to make a name for himself then he should spearhead mergers and amalgamations between the accountancy bodies.

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Dennis Howlett
By dahowlett
29th Mar 2007 14:06

Softball
Where are the questions about Izza's blog, the busted search on the dayglo website beneath which the rich treasure trove of information of library information remains largely hidden? What about the recent breakdowns of the ICAEW website?

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By pauldruckman
04th Apr 2007 09:11

some options
Just to add to the article and the debate about the international arena there are a couple of initiatives which have not been mentioned and could have an impact in the future being pursued by the Michael Izza and the team at the ICAEW:

1. the European Common Content project - this was the brainchild of the gifted former Director of Education & Training, Brian Chiplin together with past President Peter Wyman. In essence it creates a standard syllabus for key European accounting bodies thus making it easier to move within the EU for qualified accountants
http://www.commoncontent.com/

2. the Global Accounting Alliance (GAA) - which "..was created to promote quality services, share information and collaborate on important international issues.." This only came to fruition due to the enthusiasm and drive of the ICEAW team.
http://www.globalaccountingalliance.com/Alliancebodies1.html

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By AnonymousUser
03rd Apr 2007 05:52

Give AIA a chance at merger and absorption
Since merger is still in the air, I suggest ICAEW give AIA a shot.

I am certain its members would want to join ACA. However, this offer shall be limited to AIA members who are in good standing for seven years, to be fair.

This certainty would give ICAEW a more eager and high stamina outlook at merging with the rest of the bodies.

AIA has foreign international arm. Is ICAEW's overseas market penetration seemingly very promising in attracting students and members via the Examination of Experience paper entry?

Thus, the combined force of AIA and ICAEW could work well in this aspect.

How about giving the AIA a thought in the merger plan of the ICAEW?

If DTI were to have recognised the few bodies in UK as RQB, it is surprising that the RQBs do not recognised each other equally.

If standards is a problem, then the merger of ICAEW and AIA would certainly resolve this issue. I am confident ICAEW can do well in upgrading the AIA members and the upbringing of the merged AIA/ICAEW entity.


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By Atipayhatanam
03rd Apr 2007 07:42

Matthew will scold you, professor
It does not appear to have any logic. I bet 100% ICAEW members will come out to vote against the merger with AIA, giving the situation NIL opportunity for further integration plans.

Unless, you are talking about "Smart Alliance". I support that. Let ICAEW council decide in favour of absorbing the AIA members who are in good standing. I am sure many, if not all, will support this absorbtion exercise.

The only next thought is how many members will remain in AIA to support its existence after the "absorbtion exercise". By the mass reduction of members crossing over to ICAEW, the administrative council and staff would also need downsizing.

And finally....then only can you consider the "take-over" of the AIA. This plan sounds more realistic than another merger failure cost of GBP 1 mil, by my estimate.

While the ballooning membership of ACCA is a concern, the ICAEW must at all times maintain its prestige and standard. I would recommend the following memberships be recognised for direct admission to ACA membership (non-practising rights) without condition : - CPA Ireland, ICPAS, CICPA, MICPA, CPA (A). These professional bodies has met the highly acclaimed international standards in accountancy studies.

I would, however, agree with professor on his suggestion on the condition for admitting AIA members to ACA, ie 7 good standing years of membership with the AIA, coupled with constant monitoring of its members' standards and CPD.

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By AnonymousUser
03rd Apr 2007 09:30

Sometimes, it like this than like that.

You see, very far remote obvious things happen in this world. Like AIA wrote letter IFA member and ask them join membership direct entry few year before.

ICAEW can also go down do like this for benefit of everybody gains.

Not to surprise everybody including myself, I conclude saying, what would I do if ICAEW offer absorbing AIA direct into membership like this - ie ACA?

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By AnonymousUser
05th Apr 2007 09:44

commoncontent.com
May I ask if this being carried out, would it enable flexibility as far as non-EU accountants are concerned.

Slipped my mind earlier, I thought the motion to merge AIA with ICAEW could go through, having forgotten the super-power side of the ICAEW members who could just easily vetoed off the motion to null effect...something like the ICAEW/CIPFA case, but could be a bigger margin in this case.

SInce AIA and ICAEW belong to the same RQB recognition of the DTI, if standards are similar, then AIA members would not have problems passing ICAEW's case study paper.

How about allowing all AIA members to write ICEW's case study paper to qualify as ACA? Of course, to practice in the UK, overseas AIA members must meet the criteria set to become one company auditors under CA 1985.

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By AnonymousUser
09th Apr 2007 06:17

Usage of 'Accountant'
Shall ICAEW lead in the restriction of the use of the description 'Accountant' in UK, just like IAASA had done so?

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By AnonymousUser
09th Apr 2007 08:15

Ho w good

Narninda, 09 April 2007

best idea flowing already all the time here
Anon, cannot do like that first you know why?
Jean said merge CIPS with AIA first, then get "chartered international accountants status".

I also flow out best ideas for AIA to grab here also - AIA also merge with AAT, then got IFAC status. Low status in IFAC also never mind, can do also for benefit representation Chartered International Accountants in IFAC member body meeting all over the world. Then, AIA CEO can travel all the time for benefit of Chartered International Accountants spread out in this world all over wishing to meet CEO of the AIA.

Jean and Anon, please tell your comments for benefit of all the world internationally spread Chartered Internationally Qualified Accountants - CIQA.

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By AnonymousUser
11th Apr 2007 05:34

Project TAKEOVER
May I propose absorptions of all AIA members into ICAEW?

If later part, ICAEW were to merge with AIA, ICAEW can change its name to Institute of International Chartered Accountants after the merger.

FICA - fellows, AICA- associates, further describing themselves as 'international chartered accountants'.

I am sure all members of AIA will agree without delay.

Stages to take care of :

1) Absorption of AIA members offering them ACA and FCA without conditions

2) As many of the Malaysian AIA members in the far east have not paid up their annual subscriptions, many will take up the ACA offer without delay

3) When sufficient majority of AIA members has been absorbed into ACA, propose a takeover of AIA.

4) Having taken over AIA, ICAEW can change its name to include INTERNATIONAL, making it much more grand to hear and see.

5) Surely, the world would respect all INTERNATIONAL CHARTERED ACCOUNTANTS.

Hopefully, easier said than done and get done easy.

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