AGENDA ITEM 4 Finance and Management Faculty Committee REPORTING Author Chris Jackson, Head of Finance and Management Faculty Date 16 June 2011 Action: To receive written and oral summary reports on faculty activities in the past quarter and plans for next quarter. a) Events: The Faculty has organised six events so far this year: 26 January 2011 – Protecting your profits from supply chain disruptions 24 people booked for this event. The session was very interactive and well attended. The feedback was excellent. This event made a loss of £350. 15 February 2011 – Transforming working capital to deliver improved cash flow 65 delegates booked a place for this event. The feedback was overall very positive despite the lack of questions at the end of the session. This event made a profit of £873. 3 March 2011 – Clarity and impact for finance professionals This full day workshop was limited to 15 people and was a sell out very quickly. This event made a profit of £2,266. 8 March 2011 – WIF How to manage your boss 28 members booked a place for this event. Delegates found the session very practical and useful. This event made a loss of £508. 6 April 2011 – Finance functions: not another survey! The faculty presented the findings of its thought leadership study researching over 200 surveys and studies of the finance function. This event was fully booked with over 100 people. The session was interactive as it was broadcasted live on the web and delegates were invited to use voting pads to answer questions. This event was free of charge. 17 May 2011 – Telling compelling stories with numbers Stephen Few, founder and principal of Perceptual Edge demonstrated the power of data visualization for telling quantitative stories in clear and compelling ways. The event was sold out with over 180 people booking to attend. The forthcoming faculty’s events are: 16 June 2011 – Women in Finance Network: Negotiating – a practical and personal approach This event is now fully booked with 42 attendees. Clive Rich and James Stokes will discuss behaviours, body language, tackling challenges as they arise, the importance of your negotiating state of mind and managing the negotiating process. 23 June 2011 – Clarity and Impact for finance professionals in London This event is a repeat of the March Event. This one day workshop is sold out (maximum capacity of 15). We are offering the Non Members the possibility to book places for the event including FMF membership until the end of the year. We are organising another workshop in London on 18th October 2011. 28 June 2011 – Clarity and Impact for finance professionals in Birmingham This one day workshop is sold out (maximum capacity of 15). We are offering the Non Members the possibility to book places for the event including FMF membership until the end of the year. We are planning on organising two additional regional events in Manchester & Bristol in November. 13 July 2011 – Performance measurement – the route to success 45 people are booked to attend this event. Kevin Bounds will explore the features of successful performance measurement systems and will offer practical tips and guidance on how to move to effective performance management, as well as sharing the criteria that help ensure success. 14 September 2011 – Current trends in forecasting 15 people are booked to attend this event, sponsored by SAP. This session will provide an update on trends, issues and challenges in forecasting and modelling. 21 September 2011 – Women in Finance Network: Personal change and development In this session Dr. Linda Brimm will introduce the Seven Seas of Change as a framework for looking at such changes both in life and at work. She will provide insight into difficulties encountered in the change cycle, those moments when individuals get stuck and need support or assistance. b) Future special reports: June: September: December: March: Project management Pricing Thought leadership or Incentives in business (TBC) Thought leadership or Incentives in business (TBC) c) Thought leadership Report – The Finance Function: A Framework for Analysis The report has effectively been signed off by Robert Hodgkinson. His latest suggestions do need to be incorporated but we are now close to finalisation and should publish the report in July. We had good feedback from the faculty breakfast event which discussed the framework on Wednesday 6th April. The framework has been used as the basis of many presentations - see below. The approach to an Accountancy magazine article on the framework will be for RP, PS and HJ to be interviewed about the work by a journalist. RP will present the framework to ICAEW’s broader management committee on 23rd June Events RP used the framework as a basis for numerous events in South East Asia, with very positive feedback : Malaysia, KL - ICAEW leadership conference for students - BURSA (Malaysian Stock Exchange) for NEDs, Directors and CFOs - In partnership with the Malaysian Institute of Accountants, full day workshop on developing effective finance functions for CFOs and consultants - (Also sat on a symposium on “Management accounting in a digital age” for accounting educators) Singapore - Roundtable discussion with KPMG and CFOs - Members event targeted at CFOs, but also included students of entrepreneurship Vietnam, HCMC - Event for CFOs and consultants in partnership with UKTI which came about on the back of the Lord Mayors recent visit. RP also used the framework to run a workshop at ICAEW’s Finance for Business Conference in Manchester RP sat on a panel, chaired by Bob Scapens, to discuss the relevance of management accounting research at the European Accounting Association conference in Rome. Anecdotal feedback was that the panel was well received. Management accounting department effectiveness research We are working with a list broker to obtain participants for the survey – we need nonfinance department respondents. RP has suggested amendments to the survey, which Professor PascalNevries is considering. Additional funding is being made available by the University of Witten-Herdecke, Pascal’s university. Management Accounting Research Group (MARG) Conferences Andrew Shilston, Group CFO of Rolls Royce, delivered ICAEW’s distinguished practitioner lecture at the London School of Economics. Anecdotally this seemed to be the best received presentation at the conference The Aston even is scheduled for November 17/18 and will be held jointly with the Management Control Association (MCA). Calls for papers have been issued and we now need to work with Aston and the MCA to identify key note speakers d) Finances May Forecast May Actual May Variance Year to Date Forecast Year to Date Actual Year to Date Variance Budget 0 (2) (28) 0 (30) 2 (6) (8) 0 (12) 2 (3) 19 0 18 (4) (12) (607) (0) (623) (2) (13) (593) (0) (608) 2 (1) 15 (0) 16 (3) (50) (633) 0 (686) (4) (54) (625) (3) (686) (1) (4) 7 (3) (0) Costs Design and Printing Event Costs Internal recharges Internal room hire Mailing Marketing Other Overheads & recharges Postage Publications Sponsorship & advert income Staff and related costs Travel & Subsistence TSD Support Recharges Total 0 5 3 1 1 6 0 1 6 14 0 8 0 1 46 0 4 3 0 1 0 1 1 1 23 0 8 0 1 45 (0) (0) 0 (0) 0 (6) 1 0 (5) 9 0 0 (0) 0 (1) 2 12 16 1 4 13 1 7 28 60 (4) 39 1 4 183 3 11 17 0 3 0 3 7 22 93 (4) 40 0 4 200 0 (0) 1 (1) (1) (13) 3 0 (6) 33 0 1 (0) 0 17 2 56 36 3 7 25 2 18 51 195 (43) 102 3 10 467 3 86 37 2 10 25 2 18 64 174 (27) 94 2 70 561 1 29 1 (1) 3 0 (0) 0 14 (21) 16 (9) (1) 60 94 Faculty Funded Total 16 33 17 (440) (407) 33 (219) (125) 94 ICAEW Funded Income Event Income Total 0 0 0 0 0 0 (1) (1) (1) (1) 0 0 0 0 (1) (1) (1) (1) Costs Design and Printing Internal recharges Internal room hire Other Postage Staff and related costs Travel & Subsistence TSD Support Recharges Total 6 3 0 0 1 11 0 0 21 0 3 0 0 0 12 0 0 15 (6) 0 (0) 0 (1) 0 (0) 0 (6) 7 17 2 0 1 56 2 0 85 1 17 2 0 0 57 2 0 79 (6) 0 (0) 0 (1) 0 (0) 0 (6) 0 40 2 0 0 132 7 0 180 7 40 3 0 1 136 3 1 191 7 (0) 1 0 1 4 (3) 1 10 ICAEW Funded Total 21 15 (6) 84 78 (6) 180 190 10 Faculty Funded Income Corporate arrangements Event Income Faculty subscriptions Misc Income Total Full Year Variance Forecast e) Women in Finance Network There is an event being held tonight (16th June). The topic is ‘Negotiating – a practical and personal approach and will presented by Clive Rich. On 21 September Linda Brimm (a contact of Helen Stevens from INSEAD) will be speaking on personal change and development. The December event is planned for 6 December and the sponsorship team are looking to secure a speaker on this year’s theme of personal development. f) Member services The expression of interest email campaign was launched in April and was then followed by telemarketing. Telemarketing is also contacting non faculty members who attended faculty’s events. Those marketing activities have brought 48 new members to the faculty so far. g) TSB The main matter related to a point raised during the discussion of department current issues around increasing the attention to and engagement with Business members. This will be covered extensively in the main agenda item for the meeting. Other matters were mostly of record in relation to responses in progress and drafts of papers and other matters. Responses in progress: The future of UK GAAP - The Financial Reporting Faculty is putting the finishing touches on its response to the Accounting Standards Board on its consultation over the future of UK GAAP. The latest version of the response calls for a two-tier approach to accounting standards. Prudential and legal professional privilege – this is rumbling on though who pays for the legal costs is an open question Responses in progress: While not really an ICAEW report there was a paper on the forthcoming whole of government accounts that will make the UK the first major economy to produce a set of accounts that allegedly reflects everything that is under government control. The many reports being generated into Audit post Credit Crunch have prompted (a while back) the ICAEW to convene an Audit Steering Group aiming to co-ordinate responses and hence ensure that messages are consistent. They meet every fortnight to co-ordinate the technical and public policy responses. Reporting Business Risks – As a part of the Information for Better Markets programme Brian Singleton Green has produced another draft report that is currently open for comment. In the preamble there is reference to looking at broadly two levels – first the individual company level and then at an aggregated level to help spot industry wide issues. Other matters: Immunity of expert witnesses - A recent Supreme Court decision has abolished the immunity of expert witnesses in trials. This means that an expert witness who does not act with reasonable skill and care should be held accountable. h) Council 01 THE ECONOMIC ENVIRONMENT Engagement with Ministers and budget submission ICAEW has continued to have strong engagement with coalition ministers. We made submissions to the treasury ahead of the budget on 23 March and ICAEW was the first organisation they called for a reaction after the announcement. The budget itself was more extensive than we’d thought it would be and we liked the emphasis on growth. The Small Business Economic Forum This group has been convened by government to advise them on policy matters relating to small and medium sized businesses. The last meeting focused on the budget and the government’s deregulation agenda that they aim to roll out in the next few months. Resulting from the forum, ICAEW has been contacted by Lord Green (former chair of HSBC). He has responsibility for stimulating export and is working to make sure export dividend is shared with small and medium sized businesses. He has asked ICAEW to be a conduit for promoting the Export Credit Guarantee Scheme. We will be hosting a meeting at which firms will be invited to discuss how they can work with government to stimulate growth amongst SMEs. Business Confidence Monitor ICAEW’s quarterly survey of 1000 members working in business shows they are still nervous about prospects. Our economic partner, cebr, produced a paper that was presented at a meeting of 35 leading economists, analysing the effectiveness of BCM as a forecasting tool and as a bellwether to gauge business sentiment. Whole of Government Accounts Later this year, the government will be producing Whole of Government Accounts for the first time – this will give a clear picture of the UK balance sheet. Although we can estimate with some accuracy what level of government debt is, both on and off the balance sheet, the figure will be surprising to many and will be high, particularly when you relate it on a UK household basis. We are supportive of this initiative as you have to have the evidence on which to make and build your strategy if you are to deal with the fiscal position. G20 dinner with Chatham House On 5 April we invited the UK ambassadors of the G20 countries to a round table dinner, held jointly with Chatham House, at which we talked about the agenda for forthcoming G20 meetings. The focus was on world government and how to make G20 more of a permanent institution, something the ambassadors will go back to their respective governments to discuss. David Tweedie (Chairman, IASB) attended and we reinforced the importance of IFRS being adopted globally. 02 THE LEGAL AND REGULATORY ENVIRONMENT The House of Lords Economic Affairs Committee – report on audit The committee has now published its report into the role of audit in the financial crisis – the government is now examining whether the ‘big four’ should be referred to the competition authorities. The opinions of our member firms are divided with some believing this review is inevitable and should be welcomed while others remain opposed. Further deregulation of audit for SMEs Vince Cable has commented that the audit of SMEs causes considerable administrative burden and has indicated that audit for some, potentially all, medium sized unlisted companies should be made voluntary – this would have a profound impact on the accountancy profession. Government’s view is that it would be widely welcomed by businesses in the SME and unlisted sector to remove the requirement for mandatory audit. This is something ICAEW will discuss further with government and other bodies over the next few months and also stimulate public debate around this issue. It is important for us to stress that audit was not brought in as a regulatory measure – but to give confidence to investors around financial statements. This does bring important opportunities for assurance work, something that government would like to see more prevalent than audit. EC Green Paper on audit The European Commission continues to consider its options. One thing that is getting more traction than we originally expected is the non-audit service component, with a number of MEPs strongly supporting it and encouraging the commission to look seriously at whether or not auditors should be able to provide any services at all to clients beyond audit. Legal Professional Privilege Last year, ICAEW intervened on a case brought by Prudential that sought to extend the benefits of client privilege to clients of non-legally qualified tax advisors. Prudential has now been given leave to appeal to the Supreme Court – and they have asked for support from the accountancy profession to pursue the action. ICAEW is co-ordinating the profession in terms of putting a fund together and regardless of the outcome of this, will also intervene separately. Legal Services Act We are continuing to put forward our probate application under the Legal Services Act, exploring the potential benefits of ICAEW becoming an approved regulator under the solicitors’ regulatory authority. This would potentially allow our members in firms to undertake legally reserved activities monitored under auspices of ICAEW, which is a great business opportunity. The future of UK GAAP We had to make a decision as to whether or not we want to support a two or three tier financial reporting system. We have undertaken an extensive consultation with practitioners, with the overwhelming response that it is in the interest of the UK and the profession that we move to a two tier system and drop the Financial Reporting Standard for Smaller Entitites (FRSSE). 03 OTHER UPDATES Regional activity The Greater China region was launched at the end of March with a series of events that helped us to engage with government, local institutes, business and members across the region. ICAEW’s capacity building work continues to bring opportunities and we have now signed contracts with Tanzania and Ghana so, including the existing contract in Botswana, we now have three World Bank contracts in Africa – these involve working with the local institutes to make them strong, taking their syllabi and basing them around the ICAEW curriculum so ultimately we will be able to sign reciprocal agreements with members who come through those systems. We are also negotiating the fine detail of a contract with Malawi. We are now training in over 40 countries with new opportunities opening up all the time. Three years ago, ICAEW had never won a World Bank contract – now we are taking the lead. Key relationships We have been discussing ways to move towards a closer relationship with CIPFA and have presented our view of how we feel this could work. CIPFA will respond shortly. Council’s policy states that ultimately the CCAB bodies in the UK should all come together and that ICAEW should be the catalyst for this – it may be the right time to look at this and it could be discussed at the council conference in July. CIMA has taken the decision to leave CCAB and is working with AICPA on a joint venture. This is led by AICPA who had concerns that they were not representing their business members and gives CIMA the opportunity to become a bigger and more global body. This does not have an impact on the GAA as CIMA will not be joining and AICPA will maintain their current member status. AICPA are not precluding other bodies joining this new relationship which is something we will monitor. The FRC is reviewing its role. The board has put forward the view that it has been spreading its net too widely and that going forward they should focus on ‘economically important entities’ – the listed sector or maybe even just full listings. ’This can be seen as a strong vote in favour of professional bodies looking after the rest of the monitoring, regulation and activities that support the profession. Products and markets Student numbers are strong – registrations for the ACA and CFAB are ahead of budget for the year to date. Numbers of students looking for ACA training places this year are very high with the major firms looking at well over 20,000 applicants for a starting place in 2011. Following the launch of the scheme with Durham University and KPMG that gives students a degree and the ACA qualification, we have signed a second agreement with PwC and Henley Business School. We are also talking to other further education providers about similar schemes. Over the last six months we have visited universities and firms in South America, talking to them about our IFRS certificate and CFAB. The practice resource centre is now up and running, with a committee of members giving practical advice about how we continue to develop its strategy. We hope it will cement the relationships we have and help us to re-engage with small and medium sized practices. We are looking to replicate its success with a similar initiative for the business market. The F-Ten and Network of Finance Leaders (NFL) programmes are both full for 2011. We are looking at how we can move this to a larger operation as we’ve clearly identified a need amongst the business community for post-technical learning as people develop through their careers. Brand and membership We are testing our new advertising campaign with members – it promotes ICAEW Chartered Accountants and will be launching in the autumn. The annual brand survey has shown that our stakeholders feel that while there’s a greater understanding of our international strategy, there is also an opportunity for ICAEW to become a clear leader in the international policy and public affairs space. Work needs to be done to re-engage business members and to fully demonstrate the value of ICAEW and the ACA in international markets. Sustainability There will be a meeting of the International Integrated Reporting Committee (IIRC) in New York in May, with the global CEOs of the six largest firms sitting on the committee. This meeting aims to encourage the G20 leaders to support the establishment of a standard setter to develop and write standards for the sustainability agenda and how it is reported by corporates. We are continuing to support financial literacy initiatives. We will fully launch the ‘At Home With Money’ initiative at the end of 2011 and are reviewing the future of school based member activity. In the recent government cuts, our partner PFEG (Personal Finance Education Group) lost most of its funding, but we believe financial literacy in schools is important and are working on ways to move forward. We are developing the Future of Business sustainability awards programme alongside the ’Accounting for Sustainability’ group. The Finance Innovation Lab is ICAEW’s joint venture with WWF. It aims to discuss and explore ways of doing things differently financially. We are working with organisations like Metrobank, Zoppa and Cooperative and looking at bringing innovation to their core financial activities. We’ve also been asked to host a new foundation that has been established by the UN called The Economics of Ecosystems and Biodiversity study (TEEB). Find out more at www.teebweb.org For further information, please contact [email protected] i) Website Work has been done on the different tabs of the FMF section to ensure the content is being moved across from the old website to the new one. The special reports, webcasts, Good Practice Guidelines, F&M magazines, Management Quarterly’s sections have now all been updated. A “Knowledge search” page has recently been created to facilitate the search of articles by topics. Work still needs to be done to repair html articles as links within those articles were broken when then content was moved from the old to the new website. Besides, pdf articles are still not discoverable in the search engine. This is currently being looked at by our IT department.
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