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BTF > The Accounting Professsion > Flashcards

The Accounting Professsion Flashcards

1
Q

Profession definition

A

Occupational area involving prolonged training leading to formal qualification

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2
Q

Profession characterised by what factors

A
  1. Mastering of specialised skills
  2. Governance by professional association
  3. Compliance with an ethical code
  4. Process of certification before being allowed to practise
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3
Q

Profession common attributes

A
  1. Formal regulatory process
  2. Great degree of autonomy
  3. Professional values
  4. Self-regulation
  5. Co-regulation
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4
Q

What is the accountancy profession concerned with

A

The measurement, disclosure, or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocations decisions

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5
Q

Accountancy profession helpful to maintain

A
  1. Working of capital markets
  2. Upholding of public interest (via confidence)
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6
Q

Two main accountancy roles

A
  1. Public practice
  2. Business (public or private sector)
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7
Q

Public practice

A

Firm of accountants providing services

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8
Q

Two types of public practice areas

A
  1. Reserved areas
  2. Other accountancy areas
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9
Q

Reserved areas examples

A

Insolvency
Investment business
Audit
Probate

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10
Q

Other accountancy areas examples

A

Accounting
Taxation
Corporate finance
ICT
Management consultancy
Forensic accounting
Financial management

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11
Q

Business accountancy roles examples

A
  1. Transaction recording
  2. Management accounting
  3. Financial reporting
  4. Treasury management
  5. Administration
  6. Pensions
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12
Q

Are business accountants still expected to uphold professional principles?

A

Yes

Esp professional competence and due care

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13
Q

Three basic aspects of professional accountant’s work

A
  1. Maintaining control and safeguarding assets
  2. Financial management
  3. Financial reporting
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14
Q

Maintaining controls and safeguarding assets

A

Through complete, timely and accurate recording of transactions

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15
Q

Financial reporting must be reported to…

A

External stakeholders

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16
Q

Underlying principals for high quality financial reporting

A
  1. Professional ethics
  2. Accounting principals
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17
Q

UK accounting professional body

A

Consultative committee of accountancy bodies (CCAB)
(5 joined together in 1974)

18
Q

CCAB member of what international body?

A

International federation of accountants (IFAC)

19
Q

What CCAB provides

A

Discussion forum

Representative of profession (e.g. to gov)

20
Q

Who can call themselves an accountant?

A

Anyone

Except for protected areas

21
Q

CIPFA

A

Chartered institute of public finance and accountancy

22
Q

Why is regulation of professions needed?

A

Public interest protection
(Too complex for public to reasonably understand)

23
Q

Methods of regulation

A
  1. Direct gov (legislation)
  2. Separate gov agency (delegated legislation)
  3. Self-regulation
24
Q

Role of the gov in regulating the accountancy profession

A

Overall responsibility for effectiveness of regulatory framework

But delegates certain statutory powers to the financial reporting council (FRC)

25
Q

Is accountancy self-regulated?

A

Yes

ICAEW responsible for supervising all members to maintain professional l standards and reputation of profession

ICAEW (via CCAB) is also a ‘recognised professional regulator’ over reserved areas

26
Q

People likely to be involved in an effective oversight mechanism

A

Government
Regulators
Profession members
Public members

27
Q

The 2 FRC committees

A
  1. Conduct committee
  2. Codes and standards committee
28
Q

Conduct committee responsibilities

A
  1. Professional oversight
  2. Professional discipline
  3. Corporate reporting review
  4. Audit quality review
29
Q

Codes and standards committee responsibilities

A
  1. Actuarial policy
  2. Accounting and reporting policy
  3. Audit and assurance
  4. Corporate governance
30
Q

FRC professional oversight team has what 3 main roles

A
  1. Non-statutory
  2. Statutory regulation
  3. Independent monitoring
31
Q

FRC professional oversight team role: non-statutory

A

Overseeing accountancy bodies regulation of members regarding anything not related to statutory audits

32
Q

FRC professional oversight team role: Statutory regulation

A

Regulation of accountancy bodies regarding registering, monitoring and disciplining just statutory auditors

33
Q

FRC Professional oversight team: independent monitoring role

A

Reviewing quality of auditing function for major public interest entities (e.g. listed companies)

34
Q

Who is FRC independent monitoring done by?

A

The audit quality review team

35
Q

Ethics

A

Behaviours acceptable in a society that tell us how we should behave

36
Q

Ethical behaviour

A

Acting in a manner that is acceptable

37
Q

What is crucial to accounting professional ethics?

A

Public trust

38
Q

Professional ethics involves…

A
  1. Identifying ethical issues
  2. Understanding them
  3. Behaving in line with a code of behaviour accepted by other precessional
39
Q

3 ethical expectations of the profession

A
  1. Uphold ICAEW code of ethics
  2. Identify likely threats to their principles
  3. Safeguard against those threats
40
Q

How ICAEW regulates own members

A

Entry/education requirements
Additional requirements for reserved areas
Professional indemnity insurance (PII) required for public practice
Rigorous complaints investigation procedures
ICAEW overseen by FRC

41
Q

How is technical competence ensured

A

Admission requirements e.g. exams
Ongoing membership requirements (CPD) for public practice members
Regulatory powers over reserved areas (eligibility, conduct, competence)

BTF (14 decks)

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