ICAEW-CIPFA: Don’t call it a mergerby
The ICAEW and CIPFA are thrashing out ways to work more closely, but some have already accused these talks of being 'a merger by the backdoor'.
News of a closer relationship between ICAEW and the public finance and accountancy body CIPFA has brought back memories of the chartered accountancy bodies' failed union in the early 2000s. This time around, however, ICAEW doesn't envisage a merger as a "starting point" for these current discussions.
The chief executives from the ICAEW and CIPFA confirmed in a joint statement last week that the two bodies are exploring the potential for "closer working".
“We believe there is significant strategic benefit in our two bodies working more closely in the future and our discussions will examine ways of achieving that,” said ICAEW’s Michael Izza and CIPFA’s Rob Whiteman.
"The vision driving the discussions would see ICAEW and CIPFA sharing a common strategy, the aim being to combine the strengths and resources of both in a way which better equips them to serve the public interest across all areas of economic activity, including the enterprise, public and third sector."
ICAEW also noted that the outcome of the discussions will be subject to approval within the institutes and by key external stakeholders.
We won’t know the details of the talks until early 2022, when the two bodies will bring forward the formal proposals, but an ICAEW spokesperson told AccountingWEB that "At this stage we do not believe that the nature of the relationship with CIPFA under discussion would require an ICAEW membership vote."
Currently qualified CIPFA members can apply to join the ICAEW as long as they have a minimum of five years’ full membership as part of Pathways to Membership scheme.
The Institute can't say whether the closer relationship would mean a fast-tracked entry into either membership except, "We envisage any closer working would bring benefits to both ICAEW and CIPFA members. However, at this stage, it is too early to say what implications it may have on our Pathways to Membership scheme."
'Merger by the backdoor'
While the word ‘merger’ wasn’t mentioned in the press release, Ken Frost, who was a vocal opponent of the merger last time around, believes “this is an attempt at a merger by the backdoor”.
“The fact members will have to vote on this cooperation validates that view,” he told AccountingWEB. “Suffice to say the arguments against the merger, that I put forward on my site in 2004, are still valid.”
Talks of closer ties between the two bodies have dredged up memories of the last time ICAEW and CIPFA attempted to merge, only that time CIMA was involved in the discussions.
The idea at the time was to create a single professional body of 200,000 accountants and more than 85,000 students, which would have been large enough at the time to rival the size of ACCA.
At the time ICAEW said the consolidation would “ensure unrivalled expertise, member representation and support” and “a more powerful and influential voice in national and international discussions with governments, regulatory bodies and standard setters".
Up against opposition from some members fearing the plans would water down the qualifications, the merger fell 1% short of the required majority. A couple of years later ICAEW and CIPFA rekindled their talks and agreed to undertake a series of joint initiatives and projects as strategic partners.
Merger is not the starting point
However, an ICAEW spokesperson confirmed to AccountingWEB that "a merger is definitely not the starting point for our current discussions".
"We are exploring various options, which go beyond any past relationship with CIPFA, and any outcome to these discussions will be subject to approval within the Institutes, as appropriate and necessary under their respective governance requirements, and by key external stakeholders including the UK Government, the Privy Council and regulators."