17 September 2004
The governing councils of three of the six main accountancy institutes have agreed 'in principle' to a merger that could create a new body of more than 200,000 members.
The chief executives and presidents of CIPFA, the Chartered Institute of Management Accountants (CIMA) and the Institute of Chartered Accountants in England and Wales (ICAEW) came together this week to pledge their support for the move.
In a joint press conference, they claimed that a 'strategic consolidation' would provide an 'historic opportunity' for the accountancy profession to exert greater influence.
Steve Freer, CIPFA's chief executive, said a combined institute would offer breadth – by covering the public, private and voluntary sectors – and depth by providing expertise on all the specialisms that make up modern accountancy. He suggested the UK profession was currently poorly placed to deal with the challenges of globalisation.
'Six competing bodies, each sending subtly different messages, is not a formula to impress the world,' he said.
CIPFA's strategic review, Freer added, had shown that 'consolidation or rationalisation was inevitable – a case of when, rather than if'.
All three institutes will now begin a nationwide campaign to present the findings of their strategic reviews and point out the benefits of consolidation. Formal proposals will be put to the councils in December, with a vote of members expected in spring next year. Each institute will require a two-thirds majority for a merger to proceed.
Charles Tilley, CIMA chief executive, denied that the proposals had been sparked by financial considerations. 'All three bodies are very successful,' he said. 'But the opportunity to bring rationalisation will allow us to redeploy significant resources to support members.'
Eric Anstee, ICAEW chief executive, confirmed that, initially, the founding institutes' three qualifications would be retained. Any subsequent changes to the qualifications would be subject to a 75% majority of the new body's governing council.
'So, in some senses, things will stay very much as they are,' said Anstee. '[But] we will ensure that the new institute becomes the voice of the profession.'
A new name for the combined institute has yet to be decided, although Anstee said it would include the term 'chartered'.
Other attempts at merger have failed in the past, but this time the three institutes believe they have a better chance of success. 'It's a different proposition to what has been there before,' said Tilley. 'The world has moved on and we are in a much more global situation.'
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