Structure and regulation of the accountancy profession

Question 1

Accountancy professional bodies

Answer 1

• CCAB - consists of 5 major accountancy bodies including ICAEW, ICAS, ACCA, CIPFA
• IFAC - promotes high ideals of standards worldwide

Question 2

Types of regulation

Answer 2

• Direct government regulation via legislation
• Separate government agency
• Self-regulation by industry itself e.g ICAEW
• Combination of above

Government has overall responsibility but delegates certain powers to the FRC

Question 3

The FRCs 3 main roles

Answer 3

• Non statutory - oversight of professional bodies
• Statutory regulation
• Independent monitoring - looking at the quality of audits

Question 4

Financial conduct authority (FCA)

Answer 4

Independent body regulating and supervising the financial services industry. Main responsibilities;

• Promote effective competition
• Ensure that markets function well
• Regulating the conduct of all financial services firms

Question 5

Disciplinary procedures

Answer 5

1. Complain to ICAEW
2. Complaint may be escalated to the investigation committee (IC)
3. Then may be escalated to the disciplinary committee (DC)
4. Can appeal the DC to the appeal committee (AC)

Question 6

Investigation committee (IC)

Answer 6

Consists of 14 ppl, 50% of whom are not chartered accountants. Possible outcomes;

1. Offer an unpublicised caution - no fine, no publicity, possible fixed sum of costs
2. Offer a consent order - financial penalty, publicity
3. Make a formal complaint to the DC - financial penalty, publicity, possible exclusion from membership, possible suspension of practicing certificate

Question 7

Disciplinary committee (DC)

Answer 7

3 people - 2 accountants, 1 not
Results are made public
Can appeal to the AC

Question 8

Appeals committee (AC)

Answer 8

5 members - 3 accountants, 1 not, chairman with a legal qualification

Question 9

The FRC’s accountancy scheme

Answer 9

Deals with cases that can impact on the public interest

• Executive council - makes preliminary enquiries and decides if full investigation is necessary.
• Disciplinary tribunal - 3 or 5 person, chairman (lawyer), 1 layperson, 1 accountant - no member can be employed by any accountancy body nor FRC