Cover feature: The Next Generation

The ICAEW launches its new ACA this month. Can the UK's most prestigious professional accountancy qualification regain its lost lustre? Sarah Perrin reports.

The ACA has lost some of its lustre in recent years. Ernst & Young no longer offers new graduate trainees the ACA option, having replaced the ICAEW with ICAS as its main training body. PKF decided to do the same at the end of 2005. The Scottish institute has good representation in England, with two thirds of its trainees now based south of the border.

Official student and membership statistics compiled by the Professional Oversight Board have also been cause for concern. While the ACCA and CIMA have enjoyed soaring membership growth rates between 2001 and 2006 (25.1% and 23.6% respectively), the ICAEW chalked up just 4.8%. Growth in student numbers has also been comparatively sluggish.

However, things appear to be looking up for the ICAEW. 'We have a stated ambition to double student numbers by 2010,' says Ray Madden, the institute's director of learning and professional development. 'Today we are ahead of that target.' Annual intake is to grow from 3,500 to around 7,000 in 2010. 'We are already up to 4,500,' Madden says. 'We had a 12% increase last year and are looking for around 10% this year.'

And according to Accountancy's latest annual survey of trainees in the Top 60 firms (see this issue, p38), there are just under 15% more students under ICAEW contract, compared with last year.

Even more positive feedback comes from recruiters. 'The ACA is still clearly perceived as being the top institute if you are going to train in accountancy,' says Paul Goodman, co-founder of recruitment consultancy Goodman Masson. 'The ICAEW will strengthen its position further by modernising the syllabus.' The degree of difficulty in obtaining a professional qualification is important, Goodman feels. 'I think the ACA benefits from keeping the bar high,' he says.

Strength in flexibility

So how will the new ACA be perceived? One of its strengths, the ICAEW believes, is its flexibility. The initial Professional Stage consists of 12 modules (six testing knowledge and six application). The order in which these are taken can be chosen to suit trainee and firm needs. Knowledge modules are tested by e-assessment, which employers also like.

There is a strong focus on core technical knowledge. 'We want people to understand what double-entry bookkeeping is all about,' Madden says. However, a major feature of the new ACA is its strong ethical focus. Other institutes have also beefed up their ethical content, but the ICAEW wants the ACA to be seen as 'the pre-eminent qualification in ethics'.

One element that hasn't been changed is the final case study. 'It's very well perceived in the marketplace,' Madden says. 'It's seen as the most rigorous assessment of integrated knowledge that there is.'

The institute hopes that the new ACA will appeal to different types of employer, small accountancy firms as well as large, and this seems to be the case.

Chancery is a small firm in Milton Keynes, established around 10 years ago. The firm has traditionally trained ACCAs, but this summer gained ICAEW training accreditation.

Stephen James, senior audit partner, explains the move. 'The ACA exam syllabus has changed, and it's more flexible than before,' he says. 'Secondly, I am an ACA and have a natural inclination to want to provide services through the chartered accountancy route. My experience is also that you get a high calibre of candidate applying for the chartered qualification. So it helps with the future development and succession of the business.'

Just three weeks after Chancery gained its ICAEW accreditation, three potential ACA trainees were considering joining the firm. Nevertheless, recruits who want to train with the ACCA will still be able to do so.

Attracting industry

The ICAEW is keen to attract employers in commerce and industry too, facilitated by the fact that audit experience has not specifically been required in the ACA training for a few years. Recruiter Goodman finds this interesting. 'A key selling point (of the ACA) was the audit requirement that made the training supposedly so rigorous,' he says. 'The training was hard but people came out with the best business qualification around. The institute has to be careful that it doesn't end up losing the things that make the qualification unique.'

And what about the accountancy firms? If more companies offer ACA training, might they tempt some of the best graduates away? Charles Macleod, head of recruitment at PwC, appears unconcerned. 'We are used to having to compete strongly for talent,' he says. 'I do not anticipate problems attracting good people to our firm if organisations offer training outside practice. I anticipate that they will only take relatively modest numbers.

'The decision for candidates will be to consider what they wish to do with their career/qualification. I believe that a training with us will still unlock the greatest range of opportunity - including working with multinational corporates if wanted.'

American Express

Blue chip employers in industry are becoming accredited to train ACAs, including American Express, which received its accreditation this July. 'We have a couple of people in the organisation already who are very keen to enrol,' says Alexander Filshie, regional financial controller for AmEx. 'Our intention is to make it part of our recruitment offering.'

Filshie, himself an FCA, is convinced that being able to offer ACA training will help to attract high-quality graduates. 'A lot of people going into professional financial careers would want to have direct business exposure earlier in their journey - and that wasn't available in the past,' he says. 'We see the opportunity to attract people who are clear early on that they want to be in the commercial world, but nevertheless want to work towards a highly respected transferable qualification.'

A number of disciplines within finance in AmEx are already interested in taking ACA trainees, including financial planning and analysis, internal audit, tax and financial control. 'I am expecting that we will be able to rotate people through different parts of the organisation as they go through their training contracts,' Filshie says. 'We will be able to develop emerging leaders who will have had a variety of work experience from an early stage.'

Filshie appreciates the way the new ACA is structured. 'I am quite encouraged by the modular structure and the higher level of flexibility,' he says. AmEx will be able to structure training and assessments to avoid losing trainees to exam courses during peaks of business activity.


Barclays actively encourages its finance employees to undertake professional qualifications and, as an employer, has been an accredited trainer for CIMA and the ACCA for some time. More recently, however, Barclays became accredited to train ACAs.

'Previously we would recruit in qualified ACAs from the Big Four, but in the current climate that's more difficult to do,' explains Jill Robinson, head of finance business management for Barclays Finance, who has responsibility for the finance academy that provides targeted learning and development for staff. 'We took the decision last year to develop ACAs inhouse as part of our graduate programme.'

The decision has proved successful and the ACA qualification is an increasingly popular option with our graduates. 'About a third of our graduates so far have taken up the ACA option. This year we anticipate that going up to 50%.' Robinson believes this is not only because there is still kudos across the industry in being an ACA but the standard of the qualification is excellent. Young accountants can see a degree of breadth in the ACA qualification, which enhances employability.

Although traditionally the more retail-focused businesses within Barclays have aligned more with the CIMA qualification, this could change in time following the introduction of the new ACA. 'The ICAEW is expanding out of what was seen as the heartland of the ACA qualification: audit and control,' Robinson says. 'The new ACA has kept that element, but now provides greater breadth of focus in areas more aligned to a business. I think that's very positive.'

National Audit Office

The National Audit Office was the first employer outside public practice to begin training ACAs back in 1990. 'It was a response to government departments and agencies moving towards producing commercial style accounts,' says Steve Dugmore, head of recruitment and professional training. 'It made sense to train people under the ICAEW umbrella. We used to train with CIPFA.' The NAO now introduces around 70 trainees to the ACA programme.

The relationship between the NAO and the ICAEW is perceived as positive. 'It's good to be associated with a qualification that graduates will be interested in,' Dugmore says. 'And with the ICAEW, nothing stands still in terms of training and development. It is pretty forward-looking and responsive in that area.' As for the new ACA, Dugmore says: 'It really is a more flexible way of getting the qualification.'

•    For more on the new ACA, see

ICAEW section, p113. PwC praises flexibility

PricewaterhouseCoopers takes on around 600 ACA trainees every year. Some graduate recruits also complete qualifications with ICAS, the ACCA and other specialist bodies.

David Blondel, the firm's student development leader, feels positive about the new ACA, including its flexible modular structure. 'We can link the training more directly to what people are doing at work,' he explains.

'It's also noteworthy that the ICAEW is now using some different examining tools, such as e-assessment, which is giving us more flexibility around the timing of the training. The institute is responding to the expectations of people going through the training. People now expect to have a bit more control over how and when they learn, and that they won't be sitting in an exam hall for three hours writing a script.'

He also notes that the new syllabus focuses more on UK GAAP, as well as International Financial Reporting Standards. 'The financial reporting syllabus will require you to be able to work in both,' he says.

The ICAEW's international ambitions, in terms of taking the ACA to new territories such as China, wins support. 'The more internationally recognised the ACA becomes, the more internationally portable people's qualifications are,' Blondel says. 'Whenever the UK is perceived to be the thought leader, or to have expertise, and we export that expertise, that has to be good from the perspective of the profession and the Big Four.'


A new ACCA qualification was launched in 2006, to be first examined this December. 'The themes of professionalism and ethics are right at the heart of the qualification,' says Barry Payne, head of business development. A new online ethics module has been introduced, as well as a new paper called Professional Accountant. 'This gets our trainees to integrate all their skills and knowledge over many areas, including corporate governance, and cements professional and ethical behaviours in the workplace.' Payne says.

Core accounting skills remain at the heart of the qualification. However, the ACCA has retained its unusual policy of allowing trainees to choose optional papers, depending on their career path. There is also the ability to take papers in different orders. 'Employers can flex the ACCA qualification around training and development needs,' Payne says.

While trainees have been examined in International Financial Reporting Standards for some time, the new qualification retains 'variant' papers. 'In key countries we can provide exams in local GAAP,' Payne explains. 'Someone working in a smaller company here in the UK can still take a paper based on UK standards.' This is of value to SME employers, Payne believes.


CIMA revises its syllabus every four years - the next version due to be launched at the end of 2008. The results of an extensive consultation process are now being analysed.

In the last syllabus review, issues such as risk management and interpersonal skills were raised as important. 'We are the first professional body to introduce a dedicated risk and control strategy paper,' says Robert Jelly, director of education at CIMA. This addresses both financial risks and broader business risks, such as fraud prevention and disaster recovery.

CIMA's entry level certificate consists of five papers, tested by computer-based assessment. 'You can take them any time, anywhere,' Jelly says. There are then 10 professional exam papers (exemptions potentially available for up to six), including a final case study. There is no optional content - employers prefer having a consistent curriculum for all trainees.

Ethical issues are addressed at various points in the syllabus, including the final business-focused case study. 'At least 10% of the mark is assigned to an ethical issue in the case study, so students can't avoid it,' Jelly says. Use of computers for the case study is being piloted.


Instead of carrying out major periodic reviews, the CA qualification is updated on an annual basis. A number of changes have been made over the last few years. 'The first is in relation to business and professional ethics,' says Mark Allison, executive director of education. 'We have ethics embedded in all subjects. We also brought in a business ethics course two years ago, which will be assessed for the first time soon. All final year students this year must solve a business-related ethical dilemma in the exam hall. It will be an exercise in thinking - there won't be a right answer.'

A second change was to introduce a modular approach three years ago. 'We are now running our subject matter and exams in different orders to suit different firms' needs,' Allison says. A major change in May 2008 will be that all students will be able to use computers (including their own) when writing their final case studies.

'Fair balance', says Grant Thornton

The vast majority of Grant Thornton's graduate recruits in England and Wales train for the ACA. 'That's partly the result of history, and also because it's been perceived as the gold standard qualification in England and Wales,' says Gillian McGrattan, the firm's director of training. 'It has strong appeal in the graduate recruitment market.'

In developing the new ACA, McGrattan believes the ICAEW has 'made a reasonable fist' of accommodating the views of accountancy firms. 'The institute is trying to achieve a fair balance in its offering,' she says. She also notes that introducing e-assessment at the Professional Stage opens up 'interesting opportunities longer term'. For example, some firms could require trainee applicants to have already passed the knowledge modules.

Even the new ACA, however, cannot provide the perfect training solution for firms, McGrattan believes. 'What firms are wanting is a qualification that not only gives professional development opportunities for new recruits, but also delivers material that is relevant to their business,' she says.

'The two are not necessarily the same. We have realised that we cannot use the professional qualification to give all the technical and personal training and development we want our people to have. So alongside the ACA we put a quite significant investment into internal training and development.' This could cover technical and business skills, and reflect the needs of a specialism, the complexities of clients, or particular internal processes and methodologies.

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