Institute Strategy
Author:
Brian Walsh
[Fulltext] In March 1997, the Council of the Institute endorsed a strategy designed to take the Institute through the following five years. At that time we had no Blayney, Powerscreen or DIRT Inquiries, no Accountancy Foundation in the UK, and no Supervisory Authority in the Republic of Ireland. Subscription increases were zero. Despite these major developments, at its most recent meeting, the Council and Institute Executive concluded that the 1997 strategic tracks are to a very large extent still relevant.
The eight tracks established in 1997 were:
development and promotion of the CA qualification
services to members
relevance of the Institute
lifelong learning
quality assurance
value for money/commercial return
effective management
personnel policy.
To this list Council has added two further hugely important tracks:
Financial Strength. We will achieve the financial stability of the Institute through the creation of sufficient reserves to enable it to meet its objectives.
Visioning. We will position the Institute to take full advantage of international developments and dimensions.
Finance
The costs of running a professional body, not just ICAI but any professional body required to regulate its members and to protect the public interest, have risen dramatically in recent years. The macro driver of these increased costs is a growing demand by society for new institutions of accountability to align social/civic with economic/capitalist values. Thus we have McCracken, Flood, Moriarty, the DIRT Inquiry, the Irish Auditing & Accounting Supervisory Authority (IAASA), and a new regulatory framework in the UK.
Our Institute's internal Blayney and DIRT Inquiries arose directly from the inquiries conducted by the State. To date, we have spent over IR�£2,000,000 on these Public Concern Cases and, at the time of writing, our Inquiries are still ongoing. While some of these costs may be recovered when our Inquiries are complete, it is clear that any institution that has to fund this level of expenditure must retain significant reserves. The stark reality now is that our reserves are at an unacceptably low level. It is Council's view that they should be increased to around IR�£5,000,000 over the next five years. Any recovery of costs from the Inquiries would, of course, contribute to meeting that target.
Self-Regulation
Apart from the costs of our own internal investigations and Inquiries, there are external costs associated with self-regulation. In the UK, ICAI's share of the Accountancy Foundation's costs is around �£200,000 per annum. Our share of the IAASA costs has yet to be decided, but is likely to be more than that.
In November 1999, the Council considered the Institute's strategy on self-regulation and concluded that self-regulation is both in the public interest and in members' interest and that the Institute should work to retain it but should adapt its approach so as to better meet external and internal concerns. Much has happened since then, not least the publication of the Report of the Review Group on Auditing and the establishment of the IAASA. At its forthcoming meeting in September, Council will again review the Institute's approach to self-regulation, with particular focus on the ongoing costs involved and the possible options open for the future.
Visioning
Globally, the accountancy profession is currently in a process of reformation. Accountancy bodies, many of them much larger than us, are investing a lot of human and financial resources into re-directing the profession so that the skills of members, and of the Institutes themselves, remain relevant in today's ever-changing business world.
The Institute of Chartered Accountants in Australia has stated that, "in developing suitable educational services, it will seek alliances with other organisations, local and international, educational and professional, accounting and non-accounting, virtual or otherwise, competitors or not". Closer to home, our Institute is involved in discussions with our European counterparts to explore whether a common content can be developed for the professional examinations of seven Institutes, including ICAEW and ICAS. Meanwhile, the American Institute of Certified Public Accountants is continuing with its XYZ / Cognitor Project, with a view to putting it to a membership vote in November 2001. If the AICPA members vote in favour of XYZ (a new designation which would provide certification to a broad range of professional business advisors, not necessarily CPAs or CAs, who have the skill and experience to turn knowledge into value for their clients and employers), it is likely they will be joined by the Chartered bodies in Canada, New Zealand and Australia. Our Institute cannot afford to be left behind. We must position ourselves to contribute, to learn from, and to take best advantage of, projects such as these.
Brian Walsh, FCA
Chief Executive