Roles of the Accountancy profession Flashcards
What is defined
a person who ‘professes’ to have a skill resulting from a coherent course of study and training based on professional values and who continues to develop and enhance those skills by experience and CPD
Professional
What is defined
concerned with measurement, disclosure and provision of assurance about financial information that helps managers investors, tax authorities and other decision makers make resource allocation decision
the accountancy profession
What is defined
provision of financial information about an entity to external users that is useful to them in making economic decisions and for assessing the stewardship of entity’s management
Financial reporting
What is defined
expression of an opinion or conclusion by professional accountant in public practice to enhance the confidence of the intended users
assurance
Three aspects of the accounting profession
maintain control and safeguarding assets
Financial management
Financial reporting
What is defined
Management of all the processes associated with the raising and use of financial resources in a business
Financial Management
Maintaining control and safeguarding assets includes
Recording of transactions complete timely and accurate
Internal controls are sufficient
AC properly constructed ad has info and resources to fulfil objectives
NEDS adequately qualified and resourced to fulfil their roles
Four reserved areas
Statutory audit
Investment business
Insolvency
Probate
Who are five members of consultative committee of accountancy bodies CCAB
ICAEW
ICAS
Chartered accounts Ireland
ACCA
CIPFA
Who sponsor AAT
ICAEW, CIMA, ICASE and CIFPA
What is the aim of IFAC
to protect the public interest by encouraging high quality practices by the worlds accountants. this includes best practice guidance for professional accountants employed in business, plus membership compliance programme
What does IFAC emphasise importance of
Strong international economies
adherence to high quality professional standards
Convergence of professional standards
speaking out in public interest and public policy issues where expertise of profession is relevant
Why is regulation of profession needed
to provide the public interest with protection and assurance in situations where the issues are too complex for public to be reasonably expected to look after their own interests
What is the purpose of oversight mechanism
ensure body is achieving what it set out to
Key participants in effective oversight mechanism
Government
Regulators
members of profession
members of public
How is the accountancy profession regulated
government
profession itself
oversight mechanism
PO Team has three main roles
Independence oversight
Statutory oversight of supervising audit
Statutory monitoring of quality of auditing
CCAB and ICAEW have commitment to
consider PO team recommendations and either
implement them in a reasonable period or give reasons in writing for not doing so
PO audit statutory powers
agree amendments to their procedures with audit firms
make recommendations for regulatory action
refer matters to professional discipline and corporate reporting review
Who is responsible for
setting standards
Monitoring and reviewing quality of audit and FR in large entities
Regulating audit profession
Overseeing self regulation in accountancy, audit and actuarial professions
Acting as ultimate disciplinary body for accountancy and actuarial
FRC
Who in the FRC can
make amendments and withdraw accounting standards - update accounting standards
Accounting and reporting policy
Who in the FRC
develop standards for auditing and assurance and effective application and develop ethical standards relating to independence objectivity and integrity of auditors
Audit and Assurance
Who in the FRC can
make enquiries into apparent departures from requirements for FS of large companies
Seek voluntary remedial action
Apply for order for remedial action
Corporate reporting review
Who in the FRC
make sure there is oversight of audit and accountancy profession and also regulate actuarial profession
Professional Oversight Team
who in the fRC
monitors the quality of the auditing function in relation to economically significant entities
Audit quality review
Who in the FRC
deals with cases which raise important issues affecting public interest and which need to be investigated to determine if there has been miscounduct
Professional discipline
the PO team has statutory responsibility for monitoring the quality of
the audit profession
The body which monitor and acts on departures from requirements for financial statements is
the FRRP - financial reporting review panel - part of CRR
The body which acts as an independent disciplinary process for the accountancy profession is
the PD (profession discipline panel)
Statutory monitoring of the quality of audit is effected by
the AQR - the audit quality review
How is the financial services industry regulated
PRA and independent FCA
Who regulates personal pensions
FCA
Who regulate work based pensions only,
pensions regulator
Who responsible for implementing disciplinary procedures including handling complaints against members
professional standards department
ICAEW complaints procedure
Conciliation - trying to find a practical solution
Investigation
Disciplinary proceedings
Grounds for complaints
ICAEW regulation breached
Firm has departed from guidance
Firm has bought ICAEW into disrepute
What has been offered
there is a case to answer, but it is not so serious as to warrant either exclusion from membership of the ICAEW or suspension of the firm’s practicing certificate
consent order offered
When is the accountancy and actuarial discipline board involved, when a matter raises issues affecting
the public interest
Mitzberg’s managerial roles are
interpersonal
informational and decisional
