4. Professional & Technical Competence Flashcards
2 aspects of competence
- Attaining Professional competence, study, exams
2. Maintaining professional competence, CPD
Critical areas needing kept up to date.
Need to maintain PC in all areas of accounting /finance that the work
1) Changes in FINANCIAL REPORTING & AUDITING standards.
IFRS - IASB (Int’l Accounting Standards Board)
IAS - IAASB (Int’l Auditing & Assurance Standards Board)
2) Changes in ETHICAL CODES.
Prof bodies in the UK base their Ethical codes on the:
IFAC code of Ethics. Updates time to time.
3) Changes in TAX & COMPANY LEGISLATION.
Tax legislation is issued by the Government with amendments to legislation & rates made in annual Budget.
Companies’ legislation is through the Companies Act 2006.
4) Changes in relevant CRIMINAL LAW incl BRIBERY, FRAUD, MONEY LAUNDERING.
Changes, amendments, updates to criminal legislation are contained withing statute law.
5) Any ADDITIONAL CHANGES in regulation of ACCOUNTING STANDARDS (IASs & FRSs), reporting, tax compliance, audit & the accounting & finance profession.
In addition to above accountants must keep up to date with additional changes to areas relating to the work they carry out,
3 main ways of keeping up to date
1) Reading professional journals
2) Enrolling on updating courses
3) Complying with CPD requirements for QPAs
AAT CPD Cycle?
Must be RELEVANT & SIGNIFICANT
Records can be requested at any time.
Will be asked for records in case of disciplinary inv.
Once in 12m period at least.
Twice in 12m period for MIPs
Assess (Goals & Gaps)
Plan (Type of learning, Formal/Informal)
Action (Do it & Record it) )
Evaluate (Worth T&M , In terms of overall needs, goals)
THREATS to Professional Competence & Due Care
1) Insufficient time
2) Incomplete or inadequate information
3) Insufficient experience / training
4) Inadequate resources (eg time)
SAFEGUARDS to reduce or eliminate
Threats to Professional Competence & Due Care
1) Obtain additional advice or training
2) Ensure adequate time
(Ask for advice re priorities, ask can something be delayed)
3) Obtain assistance from someone with expertise
4) (Basically detail of 3!!) Where appropriate consulting senior member of staff, independent experts or a relevant professional body
If cant eliminate or reduce to acceptable level must refuse and say why
.
Regarding PC&DC accountants must:
- Seek advice, ask for assistance
2. Not (intentionally!) mislead an employer re expertise
Professional liability can arise from what causes?
Liability means Having LEGAL RESPONSIBILITY for something with the possibility of having to pay DAMAGES.
1) Criminal acts (fraud, ML)
2) Breach of contract in the supply of services.
3) Breach of Trust
4) Professional Negligence (Breach of Duty of Care)
Minimise risk of professional negligence
1) AGREE EXACT DUTIES to be included (and excluded!) from an assignment
2) If FURTHER DUTIES are added, agree and document.
3) If providing advise based on incomplete info - MAKE LIMITATIONS CLEAR & DOCUMENT
4) If preparing UNAUDITED Accounts or Financial statements for client must CLEARLY MARK CONFIDENTIAL & for PRIVATE USE of client
5) If assignment is very complex accountant should take SPECIALIST ADVICE or recommend client does so.
HAVE PROFESSIONAL INDEMNITY (LIABILITY) INSURANCE !!
BUT unprofessional to rely on it to be a SAFETY NET for assignments you should turn down
In a situation where asked what person should do trot out the 4 safeguards.
If using the time one where time pressure is not mentioned probably worth saying lack of experience makes this a good idea..
1) Obtain additional advice or training
2) Ensure adequate time
(Ask for advice re priorities, ask can something be delayed)
3) Obtain assistance from someone with expertise
4) (Basically detail of 3!!) Where appropriate consulting senior member of staff, independent experts or a relevant professional body
