Institute of Chartered Accountants in England and Wales

Overview

The Institute is a member of the Consultative Committee of Accountancy Bodies (CCAB), formed in 1974 by the major accountancy professional bodies in the UK and Ireland. The fragmented nature of the accountancy profession in the UK is in part due to the absence of any legal requirement for an accountant to be a member of one of the many Institutes, as the term accountant does not have legal protection. However, a person must belong to the ICAEW, ICAS or CAI to hold themselves out as a chartered accountant in the UK (although there are other chartered bodies of British qualified accountants whose members are likewise authorised to conduct restricted work such as auditing).

The ICAEW has two offices in the UK; the main one is in Moorgate, London and the other in Central Milton Keynes, in the newly-built Hub:MK complex. It also has offices in Belgium (Europe Region), China (Greater China Region), Hong Kong, Indonesia, Vietnam, Malaysia, Singapore and the United Arab Emirates (Middle East, Africa and South East Asia Region).

Early years

Until the mid-nineteenth century the role of accountants in England and Wales was restricted to that of bookkeepers in that accountants merely maintained records of what other business people had purchased and sold. However, with the growth of the limited liability company and large scale manufacturing and logistic in Victorian Britain a demand was created for more technically proficient accountants to deal with the increasing complexity of accounting transactions dealing with depreciation of assets, inventory valuation and the Companies legislation being introduced.

To improve their status and combat criticism of low standards, accountants in the cities of Britain formed professional bodies. The ICAEW was formed from the five of these associations that existed in England prior to its establishment by Royal Charter in May 1880.

1. The Incorporated Society of Liverpool Accountants, formed in January 1870;
2. The Institute of Accountants in London was formed in November 1870, comprising 37 members under the leadership of William Quilter. In 1871, standards for membership were established with new members having to show knowledge and aptitude through successfully passing an oral examination. Initially the London Institute restricted its membership to that city, but as other institutes were established elsewhere (for example, in Manchester and Sheffield) it was decided to remove this restriction and as such in 1872 it simply became known as the Institute of Accountants to reflect its new national coverage;
3. The Manchester Institute of Accountants, formed in February 1871;
4. The Society of Accountants in England (1872);
5. The Sheffield Institute of Accountants (1877).

The headquarter of the Institute, Chartered Accountants' Hall, in the City of London, was designed in the Italian Renaissance style by John Belcher in 1890. It was built by Colls & Sons. It is widely regarded as one of the finest examples of Victorian Baroque architecture. Sir William Whitfield designed the 1964–70 extension and new entrance.

In 1948, the institute received a Supplemental Charter. In 1957, the ICAEW merged with the Society of Incorporated Accountants (founded in 1885 as the Society of Incorporated Accountants and Auditors).

Recent developments

In 2005 the ICAEW sought to merge with the Chartered Institute of Management Accountants (CIMA) and the Chartered Institute of Public Finance and Accountancy (CIPFA). However, this project proved unsuccessful, and wasted a considerable amount of money. The Institute also announced at this time that it was considering dropping the reference to England and Wales in its title to become the Institute of Chartered Accountants. However, this plan was also withdrawn following objections from the Institute of Chartered Accountants of Scotland.

The Institute introduced a new syllabus in 2007. In order to make it more appealing to prospective students the mandatory examinations will become more flexible based on a modular structure. In addition to paper based assessments, there are now computer based assessments of objective test questions (multiple choice).

Examinations and practical work experience

To be admitted to membership of the ICAEW, applicants must generally complete 450 days of relevant work experience (training) and pass a series of examinations. During the training, the candidate will also need to display professional ethics and skepticism along with showing a commitment towards continuous professional development, which must be maintained even once the qualification has been obtained. This pathway is defined as the ACA qualification. It is common for accountancy employers in the UK, such as the Big Four, to offer the ACA as part of their training contract for new joiners.

The work experience lasts between three and five years and must be with an employer or employers approved by the Institute for training; there are more than 2,850 authorised employers around the world. The examinations are in three stages. The certificate level consists of six modules examined via e-assessments; the professional stage consists of six written papers while the advanced stage, usually taken on the final year of training, consists of two technical integration papers and a case study.

Since 2014, the ICAEW has been offering in parallel with the Chartered Institute of Taxation (CIOT) a joint ACA/CTA route which allows tax students to achieve both prestigious qualifications in a shorter length of time.

The full ACA training programme is also available in Cyprus, Greece, Malaysia, Mauritius, Romania and the Gulf states.

Other ways to membership and affiliations

Members of equivalent bodies in other European Economic Area countries and Switzerland may also be admitted to membership after passing an aptitude test, provided they are a citizen of an EEA state or Switzerland.

The Institute has mutual recognition agreements in place with:

Starting from 8 January 2010, ICAEW introduced a new "Pathways to Membership" programme whereby it offers the ACA designation on passing its Examination of Experience and sponsorship by ICAEW member or under ICAEW's ATE training environment, to members (qualified through normal examination and training route) of the following accounting institutes:

However, AICPA and MICPA members who join the ICAEW under the Pathways to Membership scheme must maintain their home body membership.

ICAEW has signed Memoranda of Understanding (MOU) with accounting bodies in overseas countries. These bodies are The Institute of Chartered Accountants of Bangladesh (ICAB), Institute of Chartered Accountants of India (ICAI), Institute of Chartered Accountants of Pakistan (ICAP) and Institute of Certified Public Accountants of Singapore (ICPAS). There is also a joint scheme in place to enable members of the Chinese Institute of Certified Public Accountants (CICPA) and the Hong Kong Institute of Certified Public Accountants to qualify as ACA with ICAEW. ICAEW is an affiliate of the Institute of Chartered Accountants of the Caribbean.

Membership categories

Members have the designation ACA (Associate Chartered Accountant) or FCA (Fellow Chartered Accountant) after their name.

Fellowship is intended to designate those who have achieved a higher level of professional experience, and to raise more money through charging a higher subscription. It is awarded automatically (previously on application) to those members who have attained at least ten years of membership and who, at the date of application, have complied with the Institute's requirements on continuing professional development in the preceding three years and have no outstanding disciplinary charges against them.

Faculties

The ICAEW has seven faculties, each run by an in-house team working together with members who are experts in their particular sector:

1. Audit and Assurance
2. Corporate Finance
3. Finance and Management
4. Financial Reporting
5. Financial Services
6. Information Technology
7. Tax

The Tax Faculty was the first to be formed in 1990; The monthly TAXline publication started in 1991, and an annual Technical Review (now Tax Planning) was first published in October 1992. The Tax Faculty joined the Confédération Fiscale Européenne (CFE) in 2001.

District societies

The Institute has 25 district societies, the largest of which is the London Society of Chartered Accountants (LSCA) with over 31,000 members. The LSCA has often taken the lead in making proposals for change, and was instrumental in the formation of the influential Hundred Group of finance directors.