Reluctant suitors for an arranged marriage

Roger Trapp investigates why the accountancy bodies are still fighting shy of commitment to a full-scale merger Defending your corner was the name of the game It was necessary to be seen setting the house in order

There is nothing surprising about the failure of the six accountancy bodies in Britain and Ireland to agree to a merger in the interests of rationalising the profession. Even before last week's meeting of the Consultative Committee of Accountancy Bodies officially killed off the plan for closer links between the various organisations, some of those involved were dancing on its coffin.

The affair has been especially curious for observers because - when it became apparent that defending your corner was the name of the game - the most obvious hostility came from the Chartered Association of Certified Accountants (Acca), whose former president, David Bishop, is chairing the working party that formulated the ideas for merger.

Barely had the proposals for reform - in brief, the six bodies replaced by a single one with different sections representing the national regions and areas of specialism - been published, than Acca launched a plan for an "overarching body", modelled on the General Medical Council, to get around widespread criticism of the profession's ability to regulate its members at the same time as representing their interests.

But then late last year the Institute of Chartered Accountants in England and Wales launched its own working party to look into the vexed issue of regulation. Never mind that there is acute disappointment that the institute, having already received recommendations for action, has asked the group - headed by Chris Swinson, partner with BDO Stoy Hayward - to spend the next year looking more deeply into the matter.

Just by setting up the initiative, the organisation, which had been widely regarded as the gainer from the Bishop plan, signalled that the process would come to nought this time round. It seems that, with the increasing chances of a Labour government, bringing with it the prospect of statutory regulation, the profession needed to be seen to be doing something to set its house in order.

The timing of the announcement (on the same day as the defeat of the Bishop plan) caught many on the hop, but there was nothing surprising about the decision of the English institute to explore merger possibilities with the Chartered Institute of Management Accountants (Cima).

Both were more enthusiastic about the prospects of rationalisation than the others - Acca, the Chartered Institute of Public Finance and Accountancy, the Chartered Institute of Accountants of Scotland and the Chartered Institute of Accountants in Ireland.

There are also, to use mergers and acquisitions parlance, "synergies" in a link-up. At a time when the English institute has come under pressure from its members over its ability to train recruits for industry as opposed to practice, Cima is finding increasing demand for its practical skills. Buoyed by the ascent to finance directorships of the likes of J Sainsbury's Rosemary Thorne, it is on something of a roll.

As Tom Glancy, Cima's president, admits, a few years ago his organisation may well not have entered into such discussions out of fear of being swallowed up. "We're feeling good about ourselves and think we have something to offer," he says.

It is a view endorsed by Keith Woodley, deputy president of the English institute. "Cima obviously has a great concentration in industry and overseas," he says. "We see that as bringing something to the table."

Expecting to be able to make an initial statement within two to three months, Mr Woodley anticipates the detailed discussions consuming much of his presidential year, which begins in June.

Mr Glancy stresses that the talks are not the product of a whim on the part of himself or Roger Lawson, his counterpart at the English institute. Instead, they have been brought about by the desire of the members.

One advantage of the Bishop process, says Mr Glancy, was that it forced organisations to consult members. And the Cima man and woman in the street were adamant that if the rationalisation plan failed, the organisation should "get on with it and talk

to someone else". As such, the planned merger should not be seen as an end in itself. "We see this as the beginning of breaking the log jam of rationalisation," says Mr Glancy. "Somebody has to do something."

Observers, however, suggest that this first stage is likely to be the easy part. Having been involved in merger talks with the English institute earlier this decade, Noel Hepworth, director of Cipfa, says that broad agreement does not necessarily lead tosuccessful marriage. "It's easy to say you love each other, but quite a different matter to get the detail right," he says.

The Consultative Committee of Accountancy Bodies says that the review of the profession will continue while Cima and the English institute carry out their own manoeuvre. Detailed proposals for proceeding will apparently be considered at the next meeting,in March.

But while everyone will no doubt watch with interest, there would appear to be few other takers for anything like a full merger. Acca has been the most vociferous opponent of the Bishop scheme, but Cipfa and the Scottish institute - proud of its reputation for research in particular - also remain to be convinced. One senior executive said that accepting what had been on the table would have been like getting married before becoming friends. However, he was sure that relationships would develop as the bodies worked more closely together.

Acca's president, John Moore, said last week that his body would continue to play a "significant part" in the debate on the future of the profession. But his organisation has long been suspicious of the motives behind the English institute's enthusiasm for rationalisation, fearful perhaps that the institute's more than 100,000 members would swamp it and the much smaller other bodies. Accordingly, Anthea Rose, chief executive, suggested that economic considerations lay behind the planned link with Cima.

While encouraged that a consensus appeared to be building behind its solution to the regulation problem, she takes issue with certain aspects of the Swinson working party's approach.

"We think regulation is fundamental to the future structure of the profession," she adds.

Mr Hepworth goes so far as to say that the Government and public hardly care about the organisation of the accountancy profession, beyond its effect on the highly charged issue of regulation. But the question at

the heart of the matter is, he believes, whether there is a continued role for a diversified profession - and hence for bodies such as his own.