BACKGROUND NOTE ON ACTION PLANS

Transcription

1 BACKGROUND NOTE ON ACTION PLANS Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment Questionnaire. They form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of the accountancy profession around the world. Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and will be subject to periodic review and update. Refer to the Part 1 Assessment of the and Standard-Setting Framework Questionnaire and Part 2 SMO Self-Assessment Questionnaire for background information on each member and associate their environment and existing processes. These responses may be viewed at: Use of Information Please refer to the Disclaimer published on the Compliance Program website. ACTION PLAN IFAC Member/Associate: Original Publish : November 2009 Last Updated: September 2011 Next Update: September 2012

2 GLOSSARY: AAC APB CARB CCAB CPD IAASB IAASR IAESB ICAI ICAS IEPS IES IESBA IFRIC IFRS IPSAS IPSASB ISA ISAE ISQC ISRE ISRS POB QA SMO Audit and Assurance Committee Auditing Practices Board Board Consultative Committee of Accountancy Bodies Continuing Development International Auditing and Assurance Standards Board Irish Auditing and Accounting Supervisory Authority International Accounting Education Standards Board Institute of in Ireland Institute of of Scotland International Education Practice Statements International Education Standard International Ethics Standards Board for International Financial Reporting Interpretations Committee International Financial Reporting Standards International Public Sector Accounting Standards International Public Sector Accounting Standards Board International Standard on Auditing International Standard on Audit Engagement International Standard on Quality Control International Standard on Reporting Engagement International Standard on Related Statements Oversight Board Quality Assurance Statement of Membership Obligations Page 2 of 24

3 Action Plan Subject: Action Plan Objective: SMO 1 - Quality Assurance Ensure a mandatory quality review program is in place for those members performing audits of financial statements of, as a minimum, listed companies Background: In accordance with the Companies Act 1990 and 2006 (UK) and the Companies Acts 1990 and 2003, ICAI is a body recognized in both Ireland and the UK to register and audit firms. This includes responsibility for undertaking Quality Assurance (QA) reviews of all audits of financial statements performed by their members. In 2007 ICAI established an independent board, the, which has assumed all regulatory and disciplinary responsibilities under the terms of ICAI s Bye-laws. CARB is responsible for the QA review system which is in line with the main requirements of the Statements of Membership Obligation (SMO) 1. CARB is subject to independent oversight by the Irish Auditing and Accounting Supervisory Authority (IAASA) in Ireland and the Oversight Board in the UK. CARB was established by the ICAI to regulate its members independently, openly and in the public interest. For further informat ion on the role and functions of CARB please see Maintaining Processes 1. since 1992 Update audit visit procedures and documentation on an ongoing basis to reflect current developments (SMO1 paragraphs 29-30). Board (CARB) CARB Staff 2. Continuously focus on ensuring the visit documentation fully supports the conclusion and visit rating (SMO1 paragraph 32). CARB CARB Staff Page 3 of 24

4 3. training of all individuals carrying out monitoring visits to update them on technical and practical developments (SMO paragraph 36). 4. To ensure the format of our reports continues to adequately cover the elements set out in paragraph 52. This will form part of an ongoing project to review/update reporting formats. (SMO1 paragraph 52). CARB CARB Staff CARB CARB Staff The provisions of International Standards on Quality Control (ISQC1) had already existed in the Audit Regulations since 1992 and were revised and updated in an ongoing manner. The firms were advised in various publications of the changes introduced by ISQC1 and ICAI introduced a new audit manual and checklist, Procedures for Quality Audit, for use by firms to ensure compliance with the new auditing standards including ISQC and the Auditing Practices Board (APB) Ethical Standards for Auditors. Review of ICAI s Compliance Information 5. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 1 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. CARB CARB Staff Page 4 of 24

5 Action Plan Subject: Action Plan Objective: SMO 2 - International Education Standards Ensure the timely introduction of the provisions of IES1 to 8 and IEPS Background: ICAI is responsible for setting education requirements for candidates for membership. Candidates for ICAI membership are required to complete a program of professional accountancy education, at least three years of practical experience and a final assessment. The program of accountancy education is delivered by Universities, ICAI is also providing education programs for all its trainees (i.e. those who completed undergraduate and post graduate programs entitling the trainees to agreed exemptions). CARB is responsible for setting the Continuing Development (CPD) Regulations for members and monitoring compliance with the Regulations. The regulations were updated in 2008 and thereafter as required to conform to the standards of the Internationa l Accounting Education Standards Board (IAESB). CARB was established by the ICAI to regulate its members independently, openly and in the public interest. For further information on the role and functions of CARB please see Continuing to use best endeavors to ensure Education Programme meets International Education Standards (IES) 6. January 2005 IES 1 to 6 are fully implemented. This was confirmed as part of internal review undertaken in An annual syllabus update of the ACA qualification and its experience requirements ensures that compliance is maintained. The internal review ensured compliance with IES 1, Entry Requirements to a Program of Accounting Education and IES 2, Content of Accounting Education Program and are fully implemented. This is subject to an annual review each year to ensure it remains fully compliant with IES requirements. Confirmation most recently completed in 2008, with ongoing reviews thereafter Education Training Department (ETD) is responsible for ensuring compliance Director of Education & Training Education Training & Lifelong Learning (ETL3) Board Page 5 of 24

6 onwards ICAI observes the International Education Practice Statements (IEPSs) on practical experience and IT education in the formation and development of our trainees. ETD Oversight by ETL3 Board Auditing Certificate Regulations updated in 2007 and checked to ensure compliance with International Education Standard 8. The Regulations have been further updated effective from July The award of the auditing certificate confirms education requirements required have been met. July 2011 Completed Council & ETD Board Director of Education & Training Education Training & Lifelong Learning (ETL3) Board 9. October 2008 The Accountant qualification together with the audit qualification (auditing certificate) and the award of ICAI responsible individual status delivers compliance with IES 8, when complied with the compliance activities of the firms Accountant The Consultative Committee of Accountancy Bodies (CCAB) provided Guidance on aspects of IES 8 such as the meaning of audit professional, and significant audit judgement. Please see for information of CCAB. A report on the CCAB Audit and Training Project was published in August 2009 and is available on the identified website. We are working with other CCAB bodies and the regulator ( Oversight Board) to implement the identified recommendations CCAB, CARB, POB requirements (if any) to be determined Improving the CPD System in Accordance with IES 8 Page 6 of 24

7 11. July 2008 New Continuing Development (CPD) Regulations implementing the monitoring provisions of IES 8 came into effect in July Compliance return issued to all members in February CARB published its CPD monitoring programme in its 2010 and 2011 Operating Plans. CARB Staff Acceptable CPD activities are not limited to those provided by the ICAI. Any appropriate activity can be used for learning and development. ICAI has supporting faculties, regional and district societies, and a strategic relationship with a training provider in order to support members in their chosen field. Departments to continue to work together to provide quality of service. Institute of in Ireland (ICAI) Any resource (staff or systems) requirement will be borne by the Institute 13. September 2007 ICAI is working with CCAB and the UK Regulator Oversight Board (POB) to develop and encourage best practice in CPD. 14. A CPD self-monitoring tool was introduced in 2010 and is being reviewed and refined at present and 2011 ICAI and CARB made submissions on relevant IFAC Consultations during 2010 and Consultative Committee of Accountancy Bodies (CCAB), Oversight Board (POB) Director of Lifelong Learning ETD and CARB requirements are being determined IT systems support ICAI and CARB Staff Review of ICAI s Compliance Information Page 7 of 24

8 16. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 2 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. CARB CARB Staff Page 8 of 24

9 Action Plan Subject: Action Plan Objective: SMO 3 - IAASB Pronouncements Promote Convergence with IAASB Pronouncements Background: As part of its legal recognition, ICAI requires its members to use the International Standards on Auditing (ISAs) (United Kingdom and Ireland) in the audit of all financial statements. These standards which have the same title as the auditing standards issued by the International Auditing and Assurance Standards Board (IAASB) are set by the auditing standard-setter, the Auditing Practices Board (APB). ICAI also issues guidance on matters not covered by the standards. The APB released ISAs (Ireland and United Kingdom) in December 2004, the issued standards incorporating the requirements of ISAs, with specific additions. The APB, which has also been actively involved in the IAASB Clarity Project, is planning to adopt clarified ISASs as issued by the IAASB with some additional guidance and requirements. ICAI supports the implementation of the auditing standards by training its members, organizing conference and road-shows for practitioners and delivering guidance on implementation, such as the Procedures for Quality Audit. Supporting Convergence with IAASB Pronouncements and Contributing to Standard-setting Activities Ireland s independent standard setter, the APB, has issued local standards that are consistent with ISAs. Completed APB APB Staff APB consulted on adoption of clarified ISAs. Adoption in accordance with the IAASB timetable. Completed APB APB Staff 19. Responses issued to all relevant IAASB proposals; ICAI members alerted to IAASB proposals via weekly e- Bulletins and ICAI Journal; ; Chairman AAC ICAI Technical Staff and Volunteers All responses posted to ICAI website; and ICAI involvement on relevant Fédération des Experts Page 9 of 24

10 Comptables Européens (FEE) working groups and FEE Council: FEE Council; FEE Audit Working Party; and FEE Company Law/Corporate Governance working party. 20. Regular meetings/events with APB secretariat; the purpose of such meetings is to exchange views on upcoming proposals, particularly as they relate to audit and assurance issues and to share information on local issues and developments. Irish member of APB attends ICAI s Audit and Assurance Committee ( AAC ) to provide regular updates on developments at APB. ; Chairman AAC ICAI Technical Staff and Volunteers AAC is a technical committee of ICAI whose primary function is to consider and respond to proposals in the area of audit and assurance and to develop guidance for members on general issues of an audit and assurance nature. Education and Awareness Building 21. ICAI participation in the Institute of in England and Wales (ICAEW) ISA implementation group. The membership of this group comprises executives from the UK/Irish accounting bodies and practitioners. Its primary function is the development of aid and information for auditors relating to implementation of ISAs. Director Relevant ICAI Departmental Staff and Volunteers Page 10 of 24

11 ICAI established project group (Spring 2009) to coordinate ICAI information dissemination, training, awareness raising initiatives regarding transition to clarified ISAs: Articles in professional journals; Dedicated webpages; Technical briefings; and Student education. 22. Regular contact with relevant Government department on audit related issues; technical advisor role of ICAI to Government officials on relevant EU committees. Maintaining Processes 23. Through AAC, ICAI continues to monitor proposals and developments at IAASB. ICAI Technical Staff, Volunteers 24. ICAI continues to use its best efforts at promoting adoption and use of IAASB standards and guidance. This extends beyond ISAs and includes International Standards on Assurance Engagements (ISAE)/International Standards on Review Engagements (ISRE) etc. when dealing with other 3 rd parties seeking other levels of assurance or AUP assignments. ICAI Technical Staff and Volunteers Review of ICAI s Compliance Information Page 11 of 24

12 25. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 3 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. CARB CARB Staff Page 12 of 24

13 Action Plan Subject: Action Plan Objective: SMO 4 - IESBA Code of Ethics Ensure alignment of ICAI Code of Ethics with IESBA Code of Ethics and use best endeavors for convergence of auditor independence standards Background: CARB on behalf of ICAI has responsibility for setting ethical requirements for its members. The International Ethics Standards Board for (IESBA) Code of Ethics (issued and in effect in June 2006) was adopted with specific additions, using IFAC wording, and comments where needed for the purpose of the United Kingdom and Ireland markets (as ICAI is a professional body for Unite d Kingdom and Ireland) or where additional guidance was considered useful. In addition ICAI members are required to comply with the APB Ethical Standards for Auditors. CARB monitors the work program of the International Ethics Standards Board for (IESBA) and produce specific materials and CPD courses to its members to assist with the implementation of the Code of Ethics. CARB was established by the ICAI to regulate its members independently, openly and in the public interest. For further information on the role and functions of CARB please see Updating the Code of Ethics 26. April 2010 Agree joint approach with ICAEW and Institute of of Scotland (ICAS). Agree proposals to update the ICAI Ethical Guide for Members in line with the IESBA Code of Ethics, expected to be finalized in June Includes consideration of style options. Completed October April 2010 Compare existing Code of Ethics with IESBA Code on topic by topic basis and draft new sections, using IESBA wording, plus added comments where needed for the purposes of the UK and Ireland market or where additional guidance considered helpful. Completed October 2010 Page 13 of 24

14 28. September 2010 Preliminary approval, section by section Obtain formal publishing approval for use of IESBA Code from IFAC (informally consulted October 2005) Produce additional implementation material: a) Derivations and destinations table (old Guide to new ICAI Code and vice versa); and b) Overview of Code of Ethics (approach, core actions, contents and support services). Completed October 2010 Completed February 2010 Completed October Following Oversight Body approval issue revised Code of Ethics. Draft 2010Final July 2011 Education & Promotion Activities 30. January 2010 Commence education programme for changes in new Code of Ethics (see 34 below). 31. internal presentations/discussions with ICAI staff responsible for student and CPD education and member QA monitoring. During 2010 and 2011 Page 14 of 24

15 and 2011 Publicity in member alerts, journals, website etc. of new Code and impact of any changes of substance. New Ethics Web Page and new Update launched in A series of information events for members will be held in October Completed August 2010 Monitoring Activities 33. Developments and amendments to the IESBA Code are monitored through monitoring IESBA communications. 34. Developments affecting ICAI members will be communicated by means of newsletters, journals and similar media. Maintaining Process 35. Responses to consultations and proposed changes will be discussed with the other accountancy bodies forming the membership of the CCAB Ethics Group. 36. Periodic view of CPD and student training material. Review of ICAI s Compliance Information Page 15 of 24

16 37. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 4 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. and CARB staff Page 16 of 24

17 Action Plan Subject: Action Plan Objective: SMO 5 - Public Sector Accounting Promote IPSAS and IPSASB Initiatives in Ireland Background: The Irish Government has responsibility for adopting public sector accounting in Ireland and has not established convergence with International Public Sector Accounting Standards (IPSAS) as an objective. Both cash and accrual are permitted for the preparation of financial statements and the Government has no plans to adopt IPSAS. ICAI, via its representation in CCAB, promotes the work of the International Public Sector Accounting Standards Board (IPSASB) in a variety of forums. Promoting the Incorporation of IPSASB requirements into National Public Sector Accounting Requirements 38. Encouraging use of IPSASs by public sector at relevant fora and inclusion of articles in ICAI journal Accountancy Ireland promoting IPSAS. The Public Sector Network Group established in 2009 provides further opportunities to promote IPSAS. ICAI Representation and Technical Policy Dept/ Members in Business groupings ICAI Representation and Dept/Member Services Division/CPD Assistance with Implementation of IPSASB requirements into National Public Sector Accounting Requirements 39. Encourage debate of issues relating to the adoption of IFRS based requirements for the Irish public sector. For example, this was done with specific Focus Groups and at an Event to discuss IPSAS conceptual Framework. ICAI Representation and Technical Policy Dept//CPD ICAI Representation and Dept/Member Services Division/CPD Page 17 of 24

18 40. Ensure list of relevant IPSAS and International Accounting Standards Board (IASB) standards, discussion papers and exposure drafts with details of how to contribute to any ICAI events or ICAI submissions, are included and updated on the ICAI website. ICAI Representation and Technical Policy Dept ICAI Representation and Dept 41. Consider providing training/assistance/advice in relation to conversion/improvements of public sector accounting requirements. ICAI Life Long Learning Division Director of LLL/CPD Staff Review of ICAI s Compliance Information 42. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 5 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. CARB CARB Staff Page 18 of 24

19 Action Plan Subject: SMO 6 - Investigation and Discipline Action Plan Objective: Ensure the professional conduct arrangements are in line with the provisions of SMO 6 Background: CARB is responsible for Investigating and Disciplining (I&D) its ICAI members. The Irish Auditing and Accounting Supervisory Authority (IAASA) has the authority to supervise CARB and also to undertake investigations into cases, particularly those of public concern. In relation to UK public concerns, these are undertaken by the Accountancy Investigation and Discipline Board. CARB s I&D mechanisms incorporate the main requirements of SMO 6. CARB regularly provides information and guidance on I&D to its members. CARB was established by the ICAI to regulate its members independently, openly and in the public interest. For further information on the role and functions of CARB please see Maintaining Processes 43. June 2009 Review Disciplinary Bye-laws to ensure continued appropriateness. Secure member approval at SGM and submit to Oversight Body for approval. October 2010 CARB, Head of Director CARB and Head of 44. April 2007 commenced and ongoing Sanctions (para 7) Review the guidance on sentencing provided to the Investigation Committee and to tribunals after consultation with all conduct committees. CARB, Head of Staff 45. April 2007 and ongoing Provision of information and guidance to members (para 9) Guidance reviewed and updated in January 2011 with new Disciplinary Bye-laws. Head of Staff Page 19 of 24

20 46. Liaison with outside bodies (para 10) Annual training update for staff in relation to reporting requirements. All matters requiring report to the Serious Organized Crime Agency/Garda to be reported promptly in accordance with legal requirements. Head of Head of 47. Initiation of proceedings (para 11) Press monitoring to identify possible misconduct by member firms. 48. Investigative powers and processes (para 12) Ensure Disciplinary Bye-law employed where member/firms do no co-operate. Head of Head of Staff Staff 49. April 2007 and ongoing Investigative powers and processes (para 13) Monitor complaints workload in various divisions and seek additional financial and staffing resources where necessary. CARB and Head of As above A review was carried out in 2009 and additional staff recruited; a further review to be undertaken in September 2009 Investigative powers and processes (para 15) Ensure appropriate guidance is given where conflicts of interest arise (updated). 51. Investigative powers and processes (para 18) Procure Annual Report from Reviewers of Complaints. January 2011 CARB and Head of Head of As above As above Page 20 of 24

21 52. The disciplinary process (para 19) annual review of committee membership to ensure terms of office adhered to and appropriate levels and range of skills maintained. CARB and Board of CARB As above 53. Disciplinary process (para 22) Emphasize requirements for independence in training sessions for new committee members and undertake periodic reviews of committee handbooks. CARB and Head of As above 54. March 2009 Administrative processes (paras 25 & 26) Develop a procedure to Monitor, on a monthly basis, elapsed times of cases both in investigation and where formal complaints have been laid. Head of Staff 55. March 2009 Administrative processes (para 30) Procedures manuals to include reference to employees obligations under their contracts of employment. Head of Staff 56. Administrative processes (para 33) Documents to be retained during the lifetime of cases and throughout prescribed retention period. Head of Staff Review of ICAI s Compliance Information 57. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 6 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. CARB CARB Staff Page 21 of 24

22 Action Plan Subject: Action Plan Objective: SMO 7 - IFRS Raise awareness and support the use of IFRS Background: In accordance with the European Union (EU) Regulation (EC) 1606/2002 concerning the application of International Accounting Standards and as endorsed by the European Commission (EC), International Financial Reporting Standards (IFRS) are mandatory f or the preparation of financial statements of consolidated financial statements of listed entities. At this stage the Irish Government intends to use the option of permitting the use of IFRS in the preparation of consolidated financial statements of all entities and in the preparation of financial statements of other specific entities (bar companies). It should also be noted that ICAI assisted the Irish Government in drafting necessary implementing legislation to permit general use of IFRS by all concerned entities. As part of its lega l recognition, ICAI also requires its members to use the Financial Reporting Standards (FRS) set by the IASB for the preparation of financial statements of non-listed entities or in the cases not covered by the EU Regulation. ICAI undertakes various activities to participate in the standard-setting process, support the Government in its transposition activities, and assist its members with the implementation of IFRS. Commenting on IASB Exposure Drafts Maintain proposals and Exposure Drafts (EDs) of the International Accounting Standards Board (IASB) / International Financial Reporting Interpretations Committee (IFRIC) on ICAI website, and note their publications in ICAI technical publications. ICAI Technical Staff New IASB proposals highlighted via ICAI jour nals and e- Bulletins. ICAI Technical Staff All IASB proposals responded to by ICAI Committees. ICAI Technical Staff/Volunteers Page 22 of 24

23 Periodic attendance by IASB Board members and staff at ICAI hosted events to discuss IASB issues. ICAI Staff Assisting Irish Government in the Adoption of IFRS in Ireland ICAI staff/volunteers assisted Irish government in drafting the necessary implementing legislation to permit general use of IFRS by all corporations ICAI Technical Staff and volunteers Technical support provided to Irish Government when attending EU Accounting regulatory Committee. Technical Policy Continued support for IASB and independent standard setting via newspaper articles, speeches etc. ICAI Technical Staff and Volunteers Support for debate in UK and Ireland for convergence between local standards and IFRS. ICAI Technical Staff and Volunteers advice to Irish government on necessary amendments to Irish Company Law to facilitate new IFRS requirements. ICAI technical Staff and Volunteers Assisting with Implementation of IFRS Launch of ICAI diploma in IFRS. Life Long Learning articles in Journal on particular aspects of IFRS/ New IFRS requirements. Director of Communications ICAI Life Long Learning ( LLL ) Team/Lecturers Accountancy Ireland Editor Page 23 of 24

24 All IASB pronouncements available to ICAI members free of charge via ICAI website. ICAI Technical Staff IFRS implementation group regular meetings of larger firms with an interest in IFRS implementation issues. ICAI Technical Staff/Volunteers All of the above actions shall continue. Review of ICAI s Compliance Information 71. Perform periodic review of ICAI s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 7 as necessary. Once updated inform IFAC Compliance staff about the updates in order for them to republish updated information. ICAI ICAI Technical Staff Page 24 of 24