Last month (January 2004) ICAI members received a letter from Institute President, James Hunt, explaining that the proposed merger with the CPA Institute, is off the agenda. Accountancy Ireland invited Mr Hunt to write this issue's Comment Page to explain to readers what has been happening and where we go from here.One of the positive outcomes of the merger discussions with CPA was that it crystallised, for both Institutes, the major challenges which lie ahead for the accountancy profession. Both Institutes will now address these challenges as part of their own independent strategy going forward and no effort will be spared by your Institute in responding to them. Accountancy is a global profession with an impressive record of achievement as the leading profession in advising business, and with a commitment to the highest standards of professionalism and integrity. However, developments in recent years have generated unprecedented demand for change by the profession, both in Ireland and internationally:
• The regulation of the profession is going through a period of radical re-evaluation following accountancy scandals, mainly in the United States, but also in Europe over the past three years. Members of the profession have to recognise and adapt to the reality of increasing regulation, increasing regulatory costs and increasing levels of external supervision.
• Changes and complexities in the business environment have created the need for new services and new forms of service delivery, supported by new competencies and professional skill sets.
• The emergence of new bodies and new players has created increased competition for the services traditionally provided by accountants.
These developments have created major challenges. Trust and integrity can no longer be taken for granted simply because a person has a professional accountancy qualification or because a professional body has enjoyed a position of status and respect in the past. Neither can the accountancy profession sustain a claim to be the leading professional advisers to business unless it adapts to the changing business environment and changing business needs.
Fundamental questions
Some fundamental questions are posed at the core of these demands:
• What is the current status and standing of the accounting profession in society, and, more specifically, what is the current status and standing of accountancy qualifications?
• How are the services provided by accountants currently rated, in terms of their professional quality, their business relevance and their competitiveness?
• Does a professional body have the capacity to serve its members and to represent their interests effectively, but, at the same time, discharge its regulatory responsibilities?
The world outside the accountancy profession has also been changing dramatically, with changing attitudes and values, changing lifestyles and a changing business environment. While these changes pose additional challenges, they also offer new opportunities.
Response of the Profession
The accountancy profession around the world has been responding to the challenges. The response has been evident in the increasing emphasis on international co-ordination and in the agenda being pursued by international accounting bodies, such as IFAC. It has also been evident in the increasing dialogue between the profession and national governments.
However, the challenges must be met by individual bodies as well, and, to this end, a significant amount of work has been commenced by your Institute, particularly in the areas of member services, communications, education / training and regulation. We have also been working hard in commenting on new legislation and developing a relationship of mutual respect with the regulators in Ireland and the UK. However we must go further, and it is my intention to establish a group to carry out a total strategic review of the Institute and how it operates. This will include a review of all our activities, where we are in the marketplace, where we want to be, and how we are going to get there. It will also include a review of the Institute's governance and management structures and the relationship between the Institute executive and members. The group will be chaired by a senior member with a proven background in strategic thinking, and it will be in place before the next meeting of Council on 4th March 2004.
Significant change, or maybe even radical change, may be required as a result of this review. If it is, your Council will not shrink from carrying it out. The status quo is not an option.
James Hunt, FCA.
President
Email: President@icai.ieAccountancy Ireland, Vol 36, No 1, February 2004.