Professional and technical competence Flashcards
(24 cards)
State the three main ways that a professional accountant can keep up-to-date with technical changes.
1) Reading professional journals
2) Enrolling on updating courses
3) Complying with CPD requirements for qualified professional accountants
What safeguards should you consider to reduce threats to professional competence and due care?
Get additional advice or training
Ensure that there is adequate time
Obtain assistance from someone with the necessary expertise
Consult with a more experienced member, independent experts or AAT
You have provided specific expertise without having the correct knowledge. This lack of knowledge can be proved and the client has incurred significant costs because of it. On what two grounds could the client sue?
Professional negligence
Breach of contract
For an accountant who mainly deals with sole traders and partnerships, who prepares accounts and tax returns, what 4 things must they keep up to date with their knowledge?
Tax legislation
Money laundering
Accounting regulations
Financial reporting standards
What type of insurance should an accountant have to cover against legal liability to compensate a client who has lost through a breach of an accountants duty to care?
Professional indemnity insurance
What do you have to do to be professionally competent?
Attain, maintain and keep up-to-date
What are the critical areas to keep up to date with?
Changes in financial reporting
Changes in ethical code
Changes in tax and companies legislation
Changes in relevant criminal law including bribery, fraud, money laundering
Any additional changes in regulation of accounting, reporting, tax compliance, audit and the accounting and finance profession.
What does CPD stand for?
Continuing Professional Development
Why do accountants need to carry out CPD?
To stay competent
How is CPD measured?
By the outcomes and benefits to the members
What does ICAEW stand for?
Institute of Chartered Accountants in England and Wales
What is the ICAEW’s process for CPD?
Reflect - consider development needs, how you can meet them and create a plan
Act - carry out activity
Impact - evaluate the effectiveness
Declare - you must declare your compliance each year between 1/11 and 31/01
What does AAT stand for?
Association of Accounting Technicians
What is the AAT’s process for CPD?
Assess - What are your goals and how are you going to achieve them?
Plan - What do you need to do?
Action - Complete the plan
Evaluate - If it was useful/ have you achieved your goals?
(You must complete this CPD process once a year or twice if you are in practise)
How is CPD for AAT members monitored?
Must keep CPD records which could be requested at any time by AAT
If you are subject to disciplinary procedures but AAT do you have to submit you CPD?
Yes
What principles do you break when you take on an assignment you know you are not capable of doing?
Integrity
Professional competence and due care
Safeguards to eliminate threats to professional competence and due care
Obtain additional advice or training
Ensuring that there is adequate time available for performing the relevant duties
Obtaining assistance from someone with necessary expertise
Where appropriate consulting with a more senior member of staff, usually a manager, independent experts or relevant professional body
If threats can’t be eliminated then the work should be refused
Define professional negligence
This may occur where a client, to whom an accountant owes a duty of care, suffers a financial loss that can be proved to be the fault of the accountant
Define CPD
The way in which accountants maintain their knowledge and skills to ensure that they remain professionally competent
Define professional competence
Having the necessary skills and expertise to carry out existing and new work to the required professional standard
Define professional journals
Magazines published by the professional accounting bodies in the UK which include up-to-date information on current accounting practice
Define professional indemnity insurance
Insurance that an accountant takes out to cover any damages he/she may have to pay a client due to professional negligence
What are appropriate CPD?
Workshops, training courses, conferences AAT social meetings Planned coaching from colleagues Structured discussion groups Studying for further qualification Online/CD-rom courses Planned reading/research Using audio, video, or IT resources Special project work or job secondment Hands-on development of skills Memberships of local or professional groups Voluntary work
