Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Chamber of Hungarian Auditors

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Hungary


    2. Name of member body:
      Chamber of Hungarian Auditors

      Or please specify name:



    3. Individual responsible for preparation:
      Katalin Fekete


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      09 / 1992



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      FEE, EAA



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Act 144 of 1997 on Business Associations
      b). the Enacting body: Hugarian Parliament
      c). date the Act or Code came into force: 06 / 1998


    25. How can IFAC obtain a copy of the Act or Code?
      Chamber of Hungarian Auditors


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities From Jan 2005 it is mandatory for all listed entities to apply IFRS, while for other enitities application is optional. Until Jan 2005 use of IFRS is optional.
      Private companies Statutory F/S in accordance with Hungarian GAAP
      Governmental Statutory F/S in accordance with Hungarian GAAP
      Not-for-profit Statutory F/S in accordance with Hungarian GAAP
      Other (please describe)
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities should be audited in accordance with the Hungarian Standards on Auditing
      Private companies should be audited in accordance with the Hungarian Standards on Auditing
      Governmental should be audited in accordance with the Hungarian Standards on Auditing
      Not-for-profit should be audited in accordance with the Hungarian Standards on Auditing
      Other (please describe)
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 5 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Re: Q30 - Appointments are renewable for up to 5 years
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      Act on Capital market - Act 120 of 2001
      Act on Credit Institutions and financial entities - Act 112 of 1996

    2. the Enacting body(ies)

      Hungarian Parliament

    3. the latest amendment date?

      Act 120 of 2001- last amended 5 May 2004
      Act 112 of 1996 - last amended 5 May 2004


    35. How can IFAC obtain a copy of the Legal authority?
      From CHA


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Act 55 of 1997 Chamber of Hungarian Auditors
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      From CHA.

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Chamber of Hungarian Auditors)


    44. For Chamber of Hungarian Auditors, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Independent, self-regulatory professional authority, founded according to Act 55 of 1997 on the Chamber of Hungarian Auditors and auditing activities

      b. Name of standards

      Hungarian National Standards on Auditing


    45. How many voting members does the standard-setting body have?
      17


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Sector of the profession, professional skills, practice, geographical representation (partly)


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Meeting of Delegates of the Chamber (190 members)


    49. What is the term of appointment for members?
      5 Year(s)


    50. For how many years has the standard-setting body been in existence?
      7 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      116,425

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      1 USD= 206.64 HUF



    52. To what entity is the standard-setting body accountable?
      To the Presidency of the Chamber and afterwards to the meeting of delegates of CHA.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      No public exposoure prior to issuance.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority is required and standards need to be approved by President.

    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      25 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Act 55 of 1997 and Ethics regulation of CHA 04/2004 CHA
      Professional Accountants in Business As above
      Professional Accountants in the Public Sector As above
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Avialable from CHA (English version of the 2001 Ethics regulation is currently available)

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (CHA)


    56. For CHA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Basic principles for Independence are included in the Act 55. CHA further elaborates ethical requirements for its members.

      Independent, self-regulatory professional authority, founded according to Act LV of 1997 on the Chamber of Hungarian Auditors and auditing activities


      b. Name of standards

      Ethics regulation of the Chamber of Hungarian Auditors


    57. How many voting members does the standard-setting body have?
      7


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job, sector of the profession, professional practice


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Meeting of Delegates


    61. What is the term of appointment for members?
      5 Year(s)


    62. For how many years has the standard-setting body been in existence?
      7 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      30,700

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      206.64



    64. To what entity is the standard-setting body accountable?
      Presidency and meeting of delegates


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Can be obtained form the Chamber's website and are issued in hard copies as well, distributed to the membership

    2. accessibility of meetings (i.e., public or private)

      private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority and also approval of the meeting of delegates is required.

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      1. 6-14 years - elementary level (compulsory)
      2. 12-18 or 14-18 yrs- secondary level (compulsory up to 16 yrs)
      3. 18 - college or university level (3-6 yrs)


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      -Statutes of CHA and Act 55 of 1997
      Contains: Following graduation individuals shall complete a 3 years of professional (financial, accounting) practice before application for auditor's training. The training lasts about 3 years (including 6 subjects) and examination is organized by CHA. Following the successful exams one shall complete an other 3 years of mentor training (professional practice) at an audit firm or practising individual.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      University or College degree and accountant's qualification
      Professional examinations
      6 subjects are part of the training, of which students take either oral and written tests.
      Practical experience
      3 years experience required before, and 3 years after completing the auditor's training
      Final qualifying examination
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      The presidency of CHA approves the training material and requirements, following the proposal of the Auditors Training Committee (OKKB)

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

    2. How many voting members does the relevant body(ies) have

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      8 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      Chamber of Hungarian Auditors and the Act 55 of 1997.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      Chamber of Hungarian Auditors


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      Auditors of listed entities need to obtain a special qualification, and are included in a separate list.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government No separate accoutning standards for public entities exist.
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?



      b. Are the documents available in English?
      Yes   No



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Act on Economic Enitities and Act on Accounting 2005 International Accounting Standards Board (for f/s of listed and consolidated enitities)
      Other (please describe) all other entities Act on Economic Enitities and Act on Accounting 2005 Hungarian Accounting Standards Board (for all other financial statements)
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      From CHA

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (International Accounting Standards Board (for f/s of listed and consolidated enitities))


    95. For International Accounting Standards Board (for f/s of listed and consolidated enitities), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      See IASB website

      b. Name of standards



    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 9B -- Standard-Setting (Hungarian Accounting Standards Board (for all other financial statements))


    95. For Hungarian Accounting Standards Board (for all other financial statements), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Hungarian Accounting Standards Board established in 2004 but no new standards have been issued as of June 2005.

      Standards issued by the Ministry of Finance remain in force.

      Remaining answers to the questions in this section relate the Hungarian Accounting Standards Board.


      b. Name of standards

      See above.


    96. How many voting members does the standard-setting body have?
      32


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      sector of profession, private and public numbers and academics


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    100. What is the term of appointment for members?
      5 Year(s)


    101. For how many years has the standard-setting body been in existence?
      1 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Not available - covered by MoF

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      0.00



    103. To what entity is the standard-setting body accountable?
      Not specified in the regulation - however can be seen as Ministry of Finance


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Standard setting process not yet commenced

    2. accessibility of meetings (i.e., public or private)

      Standard setting process not yet commenced

    3. approval process for final standards (i.e., majority required to approve final standards)

      Standard setting process not yet commenced

    4. other relevant due process activities

      Standard setting process not yet commenced


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Hungarian Financial Supervisory Authority (PSZAF)


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Parliament


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Maintain a common registry of auditors with PSZAF qualification, common ethics procedures

    2. accounting and auditing standard-setting

      Co-operation with the Chamber with regard to audit standard setting

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      Review of financial statements of listed companies, banks and insurance entities and other financial and investment institutions.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      BET (Budapest Stock Exchange)



    Section 10B -- Stock Exchange
    BET (Budapest Stock Exchange) Details


    110. For BET (Budapest Stock Exchange), is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Companies are required to prepare and publish quarterly financial statements. FS to be audited quarterly.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      1. Sanctions will be imposed 2. In case of non-compliance in a long term the company will be delisted from the BET

    3. How enforcement actions are administered.

      Enforcement actions are administered by the PSZAF and by the Council of the Stock Exchange.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Hungarian Financial Supervisory Authority, Ministry of Finance.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      Act CXX of 2001 on Capital Market, latest amendment by Act XII of 2004.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession



    2. accounting and auditing standard-setting

      -sets reporting requirements for auditors - sets requirements for special PSZAF qualification

    3. review of financial statements prepared by listed entities

      Quarterly FS is needed, which is reviewed by PSZAF. In case of any oustanding issues an on-site inspection will take place.

    4. enforcement of accounting, reporting and auditing requirements

      Besides quarterly FS, an overall supervisory report is made every 2 years. Noncompliance may result in recalling the auditor and the management.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      PSZAF- see Section 10D


    116. What is the source of Legal authority of the regulatory authority(ies)?


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      PSZAF - see section 10D


    119. What is the source of Legal authority of the regulatory authority(ies)?


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      ÁSZ- State Audit Office
      MÁK- Hungarian State Treasury
      KEHI- Governmental Review Office (deals with public procurements of the government)


    122. What is the source of Legal authority of each regulatory authority?


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      Quality control system in Hungary was launched last year. Until 2006 all auditors will be reviewed in a simplified control. From 2006 the complete (longer) controls will take place, each firm/individual will be reviewed in every 3 years.



    125. Under what authority does the organization conduct the program of quality assurance review?
      Act LV of 1997, the statutes of CHA, Quality Control regulation of CHA


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      Individual auditors can become reviewers, according to the requirements set forth in the Regulation of CHA, and passing the QC exam.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Ethics Committee, Disciplinary Commissioner, Quality control committee of the Chamber.


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      7, 1, 7


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Sector of the profession, best person for the job, professional experience


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Meeting of Delegates of CHA


    134. What is the term of appointment for members?
      5 Year(s)


    135. For how many years has the body been in existence?
      7 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      282,462

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      1 USD= 206,6401 HUF (specify currency)



    137. To what entity is the body accountable?
      Presidency of CHA, Meeting of Delegates


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      18 Day(s)



     

     

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