How ICAEW Works (Institute of Chartered Accountants in England and Wales)

How ICAEW Works (Institute of Chartered Accountants in England and Wales)The Institute of Chartered Accountants in England and Wales (ICAEW) was established by a Royal Charter in 1880. It has over 147,000 members.

Over 15,000 of these members live and work outside the UK. The Institute also has some 9,000 students.

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 authorized 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. In 2009 it also opened regional offices in Singapore and Dubai to support its members in Asia, followed by Beijing in 2011.

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 Institute headquarters, 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.

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.

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 choices).

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