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Something Odd About Member Numbers

What kind of things would members actually want CPA Australia to focus on vs what are they actually doing
Wendy Shelton
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Something Odd About Member Numbers

Post by Wendy Shelton » Mon May 15, 2017 9:18 pm

I asked about member numbers when I attended the AGM in Singapore and received a response that sounded logical at the time. Later, I browsed the goodie bag that attendees received and the Singaporean brochure summarising the year contained a different total membership number to that contained in the Annual Report. That got me looking a bit closer at member numbers but I found it difficult to analyse trends because CPA Australia doesn't convey much demographic information in its annual reports any longer.

Take a look at what I have found in the essay below. Do you agree with my interpretations? Is there a reason why demographic information is no longer included in the annual report? Is this a body in decline despite widening the entry criteria and global promotion activities?
CPA Australia member numbers essay.pdf
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Just disappointed
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Re: Something Odd About Member Numbers

Post by Just disappointed » Mon May 15, 2017 10:13 pm

Good post Wendy. yes Brand Alex Malley working, we've had 30,000 new members in 9 years.

Sounds like a headline grabbing number. But then you notice the 'natural' population increase over that period would account for 9,000. There are between 2000 and 5000 skilled migrants in accounting per year. Assuming a reasonable number of those joining - 30,000 is looking an average result at best over 9 years Then consider career preferences and the number of accounting graduates being pumped out, the 'fantastic' growth penetration in international markets - And you probably have considerable runoff in the core of the profession. One can only opine at the reasons for this, but I'm sure the poor and expensive member services, brand Alex Malley, ridiculous subscription fees, etc etc have an affect.

No wonder the board dont share the statistical analysis

Who gets excited about publishing numbers showing you're ****.

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Brett Stevenson
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Re: Something Odd About Member Numbers

Post by Brett Stevenson » Mon May 15, 2017 10:20 pm

That's a very helpful essay Wendy.
Perhaps all is not quite as rosy as their integrated report indicates.
Why they don't publish the statistical data on regions and members defies me also.
The big question I would like to have answered is how many are full voting members (CPA, FCPA), and how many are associate members (who cannot vote). Perhaps that is in the Annual Report but I missed it.
I can sort of understand the rationale for integrated reporting but the reality is that the annual report becomes more of a marketing exercise to 'dress the report up' to tell a story, but you are left with little hard objective evidence to ascertain if its just a story or its a reflection of the true reality.
I just find it ironic that as our annual report becomes more integrated and provides less hard information that the long serving representative on the International Integrated Reporting Council is Alex Malley. (p.64 of 2016 annual report).

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Re: Something Odd About Member Numbers

Post by nakedadmin » Tue May 16, 2017 8:53 am

Hi Wendy,

It was great that you asked that question at the AGM. If not we would not have known about this strike off process. So on 31 Dec they had over 160,000 members but as at now it's more like 155,000 (down about 3%) then they try to get a few back and pull up the retention rate to 98% over the course of the year as well as get new members on board.

In the meantime they happily go around saying CPA Australia has OVER 160,000 members. When in fact it does not. These are not big differences in the numbers but you don't go around saying you have OVER 160,000 members when you know full well that you do not.

Also we are assuming that the number of members as at 31 Dec was 160,000 but it could have been 162,000 although I suspect they would have said over 162,000 but if it was in fact any higher the drop off is also higher. In any case the member retention is looking like it is going to be lower this year. Member satisfaction was quoted at 6.0 out of 10 (and falling) which in my opinion is terrible for an organisation with the vision of being the worlds best member services organisation.

One question about this is what is the growth rate in Australia. Tyrone seemed to indicate there was differences between the regions with the more established markets not growing as quickly as the overseas membership. Is the Australian membership base growing at all?

Also I don't think growth should be the goal of CPA Australia. It is however, interesting to see that even though basically all the advertising money is spent on growth of membership that they would actually be failing in Australia or maybe everywhere.
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The Cyclist
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Re: Something Odd About Member Numbers

Post by The Cyclist » Tue May 16, 2017 5:10 pm

Interesting that in this article published in 2013 Malley http://www.theaustralian.com.au/busines ... 8421eadb1b states that "We have a membership of about 144,000 across 127 countries, with eight offices here and 11 internationally." So in 4 years they have grown the membership by maybe 16,000. Hardly the tens of thousands that they proudly state have joined since the Malley Advertising blitzkreig was rolled out. Or maybe tens of thousands have joined, but then that would mean that tens of thousands have left to end up with a net gain of 1.6 tens of thousands. And at a stated $60million advertising spent in the last two years this is an appalling return on investment or are the board using a left over ONETel management strategy folder that was left smouldering in the ruins of that company that chased the youth market.

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nakedadmin
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Re: Something Odd About Member Numbers

Post by nakedadmin » Tue May 16, 2017 6:44 pm

We need to filter out overseas members and ASA members as it seems like the story behind the numbers is that the numbers of full voting members in Australia may be shrinking. You would not need to take out too much of an increase in student members and overseas members which they say is growing rapidly to get that conclusion.

$3,750 spend per new member!
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nakedadmin
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Re: Something Odd About Member Numbers

Post by nakedadmin » Wed May 17, 2017 8:42 am

The 2013 annual report states:

"A strong CPA designation and brand reflected by membership of just under 150,000 including:
* Solid growth in key markets and a membership in Asia in excess of 35,000"

So hang on, they say they now (as at 31 Dec 2016) have over 37,000 in Asia. In 3 years the tens of millions spent promoting CPAA in Asia has resulted in just 2,000 extra members! When do these guys listen to feedback. China in that period went from 15,000 to 18,000 so in fact the rest of Asia went backwards. Is this not the opposite of what they have been telling us?

So where is the growth coming from? Student/ASA members? Another factor is the changes to entry where they've opened up membership to senior management positions without an accounting background.
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nakedadmin
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Re: Something Odd About Member Numbers

Post by nakedadmin » Wed May 17, 2017 10:40 pm

This article from the AFR says it: "Is CPA Australia fudging its membership, growth numbers?"

http://www.afr.com/brand/rear-window/is ... 517-gw6zy1

"Malley inherited an annual membership growth rate of 6 per cent in 2009, and never again, not even in one year, has he come close to matching it."

Student members are 32% or 45% depending on the year. So we clearly need to know the number of student members before we can tell how well this growing membership is actually growing. Too bad we cannot get the association that we fund to tell us!
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JJF
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Re: Something Odd About Member Numbers

Post by JJF » Thu May 18, 2017 6:52 am

So if there was no significant growth above the historical average what was the point of spending $60 million in marketing?

Despite the bluster (and hysterics from cpaveritas) the Naked CEO and In Conversation have not had the required result. The "sponsorships" of the NBL and Australian Open likewise have not increased numbers.

Where is the Board in all of this - do they understand what a fiduciary duty to members is?

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nakedadmin
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Re: Something Odd About Member Numbers

Post by nakedadmin » Thu May 18, 2017 9:01 am

JJF wrote:
Thu May 18, 2017 6:52 am
Where is the Board in all of this - do they understand what a fiduciary duty to members is?
Exactly, there has now been so many misleading statements from the board. They know what the numbers of student members are.

The Directors have painted themselves into a corner here. With student membership at about 75,000 any change in the strategy would drop the overall membership. So they are basically committed to spending $20m a year to send The Naked CEO to every campus so that they don't have to admit membership numbers have dropped.

Yes numbers are up but we are basically a uni student life coach association, loosely associated with business.
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The Nude CPA
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Re: Something Odd About Member Numbers

Post by The Nude CPA » Fri May 19, 2017 1:20 am

There's definitely some "creative reporting" of member numbers going on...

But, with everything else we've seen -- or haven't seen, actually -- is it surprising?

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Brett Stevenson
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Re: Something Odd About Member Numbers

Post by Brett Stevenson » Mon May 22, 2017 7:19 am

Member growth and marketing spend misrepresentation by CPA leadership.

Let me state the conclusions very clearly and up front so you can capture the force of the misrepresentation to us by the CPA leadership.

a. Membership growth has been enormously overstated since Alex Malley became CEO of CPA Australia (in Oct 2009)
This is both in percentage and absolute number terms.


Pre Alex Malley 7 year period from 2003-2009
Membership growth was 30,000 (beginning of 2003 had 99,000, and at end of 2009 had 129,000)
Average annual growth rate of 4.33%


Alex Malley 7 year period from 2010-2016
Membership growth was 26,000 (beginning of 2010 had 129,000, and at end of 2016 had 155,000 per members register not 160,000 as in annual report)
Average annual growth rate of 2.88%


So, in both absolute member numbers, and in terms of percentage increase we have been sold a pup.
Have a read of any of the annual reports over the last 7 years and the dominant emphasis has been the sensational growth in membership.
Well I shall leave you to check my calculations, and am happy to be corrected, but it look to me like we have been misled.

b. The marketing spend has increased by 50% from a three year average of $20,000,000 p.a. in the last pre Alex Malley years of 2006-2008 to a three year average of $30,000,000 p.a. in the last three Alex Malley years of 2014 - 2016.
That is an increase of $10,000,000 p.a. for a membership growth rate of less than before.


Pre Alex Malley 3 year period from 2006-2008
$19,078,000 (2006) plus $20,243,000 (2007) plus $20,153,000 (2008) gives an average p.a. spend of $19,825,000 say $20 million

Alex Malley 3 year period from 2014-2016
$30,526,000 (2014) plus $31,392,000 (2015) plus $29,444,000 (2016) gives an average p.a. spend of $30,454,000 say $30 million


Of course our President/Chairman Tyrone Carlin at the Singapore AGM just wanted to emphasise the marketing spend in terms of a % of revenue which is pretty misleading given the quantum of the dollar spend.
When you look at the dollars spent it tells a completely different story (50% extra p.a. i.e. $10 million extra p.a.) with a poorer result in terms of membership growth (see above).
This is totally misleading by the board and the CPA management because the oft-given justification for The Naked CEO, the TV show, the Aust Open and NBL sponsorships, the billboards, the global strategy, the self-promtion of Alex Malley etc., is that it has increased the membership of CPA Australia at an astounding level of success.
Well, that is just crap.
All it means is that we have forked out $10 million extra p.a. funding primarily Alex Malley’s self promotion, and a misguided marketing and global strategy by the CPA leadership.
I have no idea of the expertise of the current board but if this is the best they can offer in terms of strategy and oversight to the membership they should hand in their resignations today.
If this track record applied to any other company or organisation both the management and board would be out the door.
But not at CPA Australia where the stranglehold of a small group in the leadership is unable to be broken, where the members are virtually powerless to make change because we cannot vote the directors on or off the board, and where the current leadership continue to mislead, minimally disclose and hold AGM’s offshore to avoid scrutiny by the members.
It’s a disgrace

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Brett Stevenson
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Re: Something Odd About Member Numbers

Post by Brett Stevenson » Tue May 23, 2017 8:09 am

I just had a re-read of the above comments by The Cyclist, Nakedadmin, JJF on these odd membership numbers.
They are spot on and just confirm the insights by Joe Aston in the AFR on this, and Wendy Shelton with her question at the Singapore AGM.
The CPA leadership really are doing a sales job on member growth which is unsupported by the evidence. That is long growing nose stuff.
Hardly what one expects of a professional accounting organisation with integrity emblazoned on its logo.
I wonder if Alex Malley has mentioned that in his You Tube interviews?

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The Nude CPA
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Re: Something Odd About Member Numbers

Post by The Nude CPA » Tue May 23, 2017 9:24 am

Brett Stevenson wrote:
Tue May 23, 2017 8:09 am
The CPA leadership really are doing a sales job on member growth which is unsupported by the evidence.

Hardly what one expects of a professional accounting organisation with integrity emblazoned on its logo.
Agreed.

Gotta justify those remuneration levels somehow, though, eh?

Wendy Shelton
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Re: Something Odd About Member Numbers

Post by Wendy Shelton » Sat Jun 24, 2017 7:48 pm

I know I am going back over old territory looking at member numbers again but this time my focus is on the published CPA program exam numbers. Afterall, they reflect the strategic goal of securing the next generation of talent, something we seemed to hear a lot about over the past few years. Please take a look at my essay. I wonder whether the Board, CEO and CPA website have been misleading members and whether they can be prosecuted for doing so? Should we get the ACCC involved?
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Not_A_CPA
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Re: Something Odd About Member Numbers

Post by Not_A_CPA » Sat Jun 24, 2017 8:21 pm

Having not read the report, are those exam sits the number of members who sat at least one exam during the year, or is it the annual number of completed exam papers? I ask as most members would do two subjects per year effectively making two exam sits per member ie 2017 target of 62,000 would result in 31,000 memberships (ignoring those doing one or three exam sittings per year).

Dave
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Re: Something Odd About Member Numbers

Post by Dave » Sat Jun 24, 2017 10:06 pm

Hi Wendy,

I feel that you are on the right track.

There is definitely something fishy about the FCPA/CPA numbers.

Maybe the divisional council can now get the FCPA/CPA number out of the CPA Administration.

This may be one of the key reasons that they did not comply with the law and did not release the proper members register to Brett.

The only members register that really counts are those who can vote.

If there are significant number of students (last time it was released in 2008 ASAs accounted for 45K of the 122k membership) now (let's say in excess of 60,000) then all the marketing and branding has been just flushed down the toilet !!!

We need to also keep in mind that they also got a lot of members by reciprocal arrangements (eg. CIMA (UK))

So if you are really looking at organic growth due to management strategies it should be what is the FCPA/CPA number now less reciprocal arrangements less 77,000 in 2008 at the time Alex took over.

I have a feeling that this number is under 25,000 which divided by 8 years means it is not much per year compared to the marketing and branding spend.

I will bet my bottom dollar that the current FCPA/CPA number is way below 100,000 and that in 8 years the current executive team has achieved nothing.

However, they have been misrepresenting to us what has been happening and using integrated reporting etc. to hide that they have pretty much achieved nought.

The CA ANZ properly represents the full member number of 103 K and students or provisional member number of 16 K. why can't CPA Australia do the same?

CPA Australia should not represent ASAs as members and thus hide the issue of the conversion rate.

Generally the student ratio should be around the 20% mark, but I suspect (which is supported by Wendy's analysis) that the Student ratio at CPA Australia is way above 20%.

CPA Australia now needs to do the right thing and disclose the FCPA/CPA number.

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Red_Ferrari
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Re: Something Odd About Member Numbers

Post by Red_Ferrari » Sun Jun 25, 2017 2:18 am

Dave wrote:
Sat Jun 24, 2017 10:06 pm

We need to also keep in mind that they also got a lot of members by reciprocal arrangements (eg. CIMA (UK))

So if you are really looking at organic growth due to management strategies it should be what is the FCPA/CPA number now less reciprocal arrangements less 77,000 in 2008 at the time Alex took over.

I have a feeling that this number is under 25,000 which divided by 8 years means it is not much per year compared to the marketing and branding spend.

I will bet my bottom dollar that the current FCPA/CPA number is way below 100,000 and that in 8 years the current executive team has achieved nothing.

However, they have been misrepresenting to us what has been happening and using integrated reporting etc. to hide that they have pretty much achieved nought.

The CA ANZ properly represents the full member number of 103 K and students or provisional member number of 16 K. why can't CPA Australia do the same?
amen, +1 to that
If the numbers were good they'd be showing the break-up in every annual report.

Everything with this mob is a state secret or commercial in-confidence or whatever. We can't even find out how many can vote, so that an EGM can be called by members.

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Re: Something Odd About Member Numbers

Post by nakedadmin » Sun Jun 25, 2017 7:40 am

Wendy Shelton wrote:
Sat Jun 24, 2017 7:48 pm
I know I am going back over old territory looking at member numbers again but this time my focus is on the published CPA program exam numbers. Afterall, they reflect the strategic goal of securing the next generation of talent, something we seemed to hear a lot about over the past few years. Please take a look at my essay. I wonder whether the Board, CEO and CPA website have been misleading members and whether they can be prosecuted for doing so? Should we get the ACCC involved?
Thanks Wendy for a very good analysis. If the Directors' statement "40 per cent increase in CPA Program enrolments" is true then perhaps people are doing the exams slower and there is a massively increasing ASA membership percentage. Unfortunately Directors' won't answer simple questions about member numbers. Which is really annoying. Why is the number of voting members so confidential when the total number of members and growth is spruiked endlessly.
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Wendy Shelton
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Re: Something Odd About Member Numbers

Post by Wendy Shelton » Sun Jun 25, 2017 7:53 am

Not_A_CPA wrote:
Sat Jun 24, 2017 8:21 pm
Having not read the report, are those exam sits the number of members who sat at least one exam during the year, or is it the annual number of completed exam papers? I ask as most members would do two subjects per year effectively making two exam sits per member ie 2017 target of 62,000 would result in 31,000 memberships (ignoring those doing one or three exam sittings per year).
Hi Not_A_CPA,
Your guess is as good as mine as to what the exam sit numbers really represent since they are not defined anywhere in the annual report that I can see. I assume they are bums in seats so the same person sitting three exams in one year would count as 3. One of the challenges of the annual reports has been to try to tie together statistical information and it is has been patchy for years. I have not been able to verify one statistic against another to ensure I haven't made a mistake. For example, I can't cross reference the number of Associates going through the CPA Program against the number sitting modules against the failure rate or verify how many candidates CPA Australia is losing prior to completion. Once completed, are all candidates applying for CPA membership? Do we really know how successful the CPA Program really is? Is CPA Australia doing a better job of training the next generation than other accountancy bodies? These are the sort of questions I would like answered in our annual report. What would you want to know?

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