A profile of Chartered Accountants Ireland Chief Executive Pat Costello appeared in the Sunday Business Post, January 24, 2010. Entitled "Military Precision" the article was written by Ian Kehoe, Chief news correspondent, Sunday Business Post.
The new €46 million headquarters of Chartered Accountants Ireland has everything from high-spec canteens to major conference facilities - but chief executive Pat Costello has to do without his own office in the Dublin building.
"The whole place is entirely open plan, no one has their own office,” said Costello, pointing out his standard-issue desk on the building’s fourth floor. "We have a policy of transparency around here.”
Coming from the boss of the largest accountancy body in the country, such talk of transparency could be seen to have a double meaning.
Over the past two years, his body’s 19,000 members have faced new challenges, stemming from the recession at home and the financial collapse around the world. With a new focus on regulation and corporate transparency, accountants - and the organisations they audit - have come under fire at home and abroad.
Fortunately for Ireland’s accountants, they have a leader who is qualified to deal with any assault on their profession.
A former army commandant with 20 years’ military experience, Costello has been trained to hold his ground, rather than retreat.
"There has been a lot of talk about reform in light of the crisis, but I don’t think a knee-jerk local reaction to the current issues would serve any great purpose,” he said. "The standards we operate are international standards, set independently of the profession. They are global standards. We have a very good accounting and auditing system. Maybe a small bit of tweaking is required, but I don’t expect that we need any knee-jerk reactions.”
Costello said that the Institute had been quick to investigate any complaints about its members, and to take disciplinary action when required. Of the 100 complaints made about accountants last year, only five actually required a public disciplinary tribunal, he said.
"The objective would be to have zero, but I am happy that we have a robust, independent regulatory system,” said Costello.
That system has won international plaudits for Chartered Accountants Ireland and served as the prototype for regulation in several other countries. Although it is financed by Chartered Accountants Ireland, the Chartered Accountants Regulatory Board has an independent mandate, and the majority of its members are non-accountants.
The body controls licensing and quality assurance across the Institute's membership, governs investigations and appoints investigators where necessary.
Costello said that the semiautonomous structure had been created to put distance between the Institute as a representative body, and the Institute as a regulator.
"This does not mean we are stepping away from our responsibilities,” he said. "We are quite clear that Chartered Accountants Ireland is responsible to the public and to the state for the regulation of our members. But we wanted it to be clear that it was not a case of chaps regulating chaps.”
However, regulation is just a small part of the overall brief for Costello and Chartered Accountants Ireland, which has a 32-county mandate.
Formerly known as the Institute of Chartered Accountants Ireland, the body is responsible for providing professional qualifications for more than half of the island’s accountants.
It also acts as a representative voice between the profession and officialdom, and publishes a range of accountancy books, pamphlets and online resources.
"We launched the publishing wing about five years ago, and we now have 60 or 70 publications,” Costello said.
In addition to providing the basic chartered accountancy qualification, the Institute also provides a range of specialist qualifications and courses for accountants. At present, there are 14 specialist qualifications on offer, covering everything from tax to international reporting standards.
This year, for the first time, the Institute will offer a diploma in insolvency, a move which reflects the economic upheaval. If Costello has his way, the number of specialist courses will increase further over the coming years.
"In a specialised world, you have to provide specialised qualifications,” he said. "We started offering specialist courses five years ago, and we try to add a number of new courses every year.”
Despite the economic downturn, Costello said there had been no real decline in the numbers entering the profession - Chartered Accountants Ireland had an intake of 1,250 students this year. "If you are starting off now, what would you want to be? What are the options? Accountancy is still one of the best routes available. There is still considerable employment, considerable training" he said.
"I am not saying that every member has a job and that every member is in full employment. That is not the case. But compared with other professions, our members are getting work.”
After swapping the army for the private sector, Costello spent 11 years as chief executive of the Irish Taxation Institute, before moving on to what was then the ICAI five years ago. His apprenticeship may have been unusual, but he said that the army trained a person for all aspects of life. "I think the army underestimates the quality of its training and how relevant it is outside of the army. It is a wonderful business training centre,” he said.
"It teaches you all the good things about leadership, about accepting responsibility and putting the organisation ahead of your own interests. It moulds character.
"For me, the easy option was to stay in the army, but you should go while you are still happy. I love change. Without change, I would find it uninteresting. Any chief executives worth their salt strive for change, and want to be in the middle of change. I get that here every day.”
Training accountants is big business, and Chartered Accountants Ireland is operating in a crowded market, with several other accountancy bodies - such as ACCA and CIMA - trying to attract student members. Costello estimated that his body had 52 per cent of the market at present, and said his ambition was to increase that steadily over the coming years.
"It is a dog-eat-dog market, and our ambition is to grow our market share, to be bigger,” he said. "We have a fantastic relationship with the other bodies, but we compete heavily for students. Our aim is to be bigger, better, truly world class.”
As part of that effort, the body invested heavily in the new headquarters and training centre on Pearse Street in Dublin city centre. It spent €46 million building the property, which has a capacity for 1,300 people. It houses a 600-seat lecture room, which can be divided into a number of smaller rooms, as well as a conference room with capacity for 700 delegates.
All the facilities are equipped with cutting-edge technology, allowing events to be streamed live around the world.
"You need these sort of facilities to offer education.
Through this building, we can reach all our members all over the 32 counties,” said Costello.
The association borrowed €26 million to fund the project, with the remaining €20 million coming from its reserves. Costello said that the annual cost of repaying the debt was lower than the body’s previous outlay on rented properties.
"It makes financial sense,” he said. "Obviously there were risks involved with the project. We could have got the design wrong; there could have been archaeological problems; it could have gone 10 per cent over budget.”
As it transpired, none of this happened, and the building ended up coming in 10 per cent under the original budget of €51.5 million. Costello has big plans for the finished venue, which will be rented out for conferences and corporate events.
Some of the banks and large accountancy firms have already rented out rooms, and a major marketing drive is about to begin. "We think this is something that is needed and it will be fantastic value for money. It is the best in the world for what we do. Right now, we are not aware of any other facility that is as good,” said Costello.
The extra revenue will certainly come in handy. In light of the recession, Chartered Accountants Ireland moved to lower its charges to members. Subscriptions were reduced by 5 per cent, student education fees were cut by 10 per cent and the cost of continuous professional development courses has come down by 20 per cent.
The reduction in fees meant that overall revenues at the Institute decreased slightly last year to about €30 million, according to Costello. However, the chief executive said that the body had also been quick to reduce its expenditure - management have agreed pay cuts, while overheads have been reduced.
"We are no different to any other business - we have to get a bigger share of a shrinking market,” he said. "The only way we do that is to provide better value for money, introduce new services and give a better service to our members. You have to reinvent yourself.
"Some areas are down, some are up. You have to be innovative. It is a matter of survival and you have to be ruthless.”