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.

    The Chartered Institute of Management Accountants (CIMA)

     

    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:

      United Kingdom


    2. Name of member body:
      The Chartered Institute of Management Accountants (CIMA)

      Or please specify name:



    3. Individual responsible for preparation:
      Martin Nimmo


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

      10 / 1977



    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.):
      CCAB
      FEE



    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: UK Companies Act 1985, as subsequently amended (and which restated all previous equivalent legislation including the Companies Act 1981, which implemented the EU 4th Directive and came into force in 1982)
      b). the Enacting body: UK Government, Department of Trade and Industry
      c). date the Act or Code came into force: 07 / 1985


    25. How can IFAC obtain a copy of the Act or Code?
      It is published in Butterworth's Company Law Handbook (currently in its 17th Edition) which can be obtained by contacting +44 208 662 2000, and is available online at www.lexisnexis.co.uk by subscribing to LexisNexis Online Services (tel +44 1483 257726)


    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): Limited Liability Partnerships
      Private companies   Other (please specify): Not for profit (only to the extent they fall into another category e.g., they are companies
      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 Accounts to consist of Profit and Loss Account and Balance Sheet, giving a true and fair view. UK Accounting Standards (issued by the Accounting Standards Board - ASB) also to be followed, which require a cash flow statement and a statement of total recognised gains and losses (listed entities will not be subject to UK accounting standards as from 1 January 2005). Copies of UK accounting standards can be obtained from the ASB at the following link: www.asb.org.uk/asb/publications
      Private companies As above
      Governmental
      Not-for-profit As above
      Other (please describe) Limited Liability Partnerships As above
      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 Auditor to state whether the accounts give a true and fair view and are properly prepared in accordance with the requirements of the Act. The standards to be followed are the UK AuditingStandards issued by the Auditing Practices Board. As from 1 January 2005, International Auditing Standards will apply to all UK companies (subject to an exception for companies that have both a turnover of not more than £5.6 million and gross assets of not more than £2.8 million)
      Private companies as above
      Governmental
      Not-for-profit as above
      Other (please describe) Limited Liability Partnerships as above
      Other (please describe) Limited Liability Partnerships


    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: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Board of directors applies in the event of a vacancy, for example, if the auditor resigns during an accounting period.)
      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

      The (UK) Listing Rules

    2. the Enacting body(ies)

      The UK Listing Authority (UKLA) - part of the Financial services Authority (FSA)

    3. the latest amendment date?

      05/2004


    35. How can IFAC obtain a copy of the Legal authority?
      The Listing Rules are available at http://www.fsa.gov.uk/ukla/1_listinginfo4.html


    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:
      Half-yearly interim reporting


    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:
      Reporting on corporate governance disclosures


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): See also Question 31
      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: 1 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:
      UK recommended practice is that individual audit engagement partners of listed company audit clients are rotated at least every five years. Other key audit parties at group level on listed entities should rotate at least every seven years. (ACCA's Code of EDthics recognises that rotation may not be possible in all circumstances, due to the size of the firm or the nature of the engagement. In such cases it requires suitable alternative safeguards (eg external consultation) to be applied to reduce risks to an acceptable level)



    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 Companies Act 1985 Note 1 Auditing Practices Board (APB)
      Other (please describe) LLPs Limited Liability Partnerships Act 2000 Note 1
      Other (please describe) Entities established under legislation See Note 2
      Other (please describe) Public sector and other audits See Note 3 and Note 4

      a. How can IFAC obtain copies of these documents?

      Through Her Majesty's Stationery Office (HMSO) at www.hmso.gov.uk

      Through Her Majesty’s Stationery Office www.hmso.gov.uk.

      Note 1 (Q43) - The last major amendment to the Companies Act 1985 was the Companies Act 1989. Amendments have been made since, principally by means of Statutory Instruments. Please note that the Companies Act 1985 contains requirements for bodies such as the ICAEW to abide by technical standards set by an independent body, but that auditing standards and the Auditing Practices Board are not specified in legislation. The Consultative Committee of Accountancy Bodies has undertaken to adopt auditing standards and guidance issued by the Auditing Practices Board within three months of promulgation by the Auditing Practices Board. The Companies Act 1985 will be amended by a Companies Bill currently passing through Parliament. The Limited Liability Partnerships Act 2000 has also been amended, principally by means of Statutory Instruments. The auditing requirements for LLPs are similar to those for companies.

      Note 2 (Q43) - Entities established under other legislation: These include building societies, credit unions, pension funds, registered social landlords, charities, industrial and provident societies, friendly societies, trade unions and others. Such entities are subject to varying auditing requirements depending on their size, and on the legislation to which they are subject.

      Note 3 (Q43) - Governmental bodies: The APB's Practice Note 10 provides guidance on how to apply standards to audits in the public sector.

      Note 4 (Q43) - Standards set by the Auditing Practices Board apply to (a) other audits conducted by firms registered with CCAB members unless the terms of engagement require the use of other recognized auditing standards such as International Standards on Auditing and (b) audits conducted by firms not registered with CCAB members where such firms elect to, or are required by contract to perform audits in accordance with UK or Irish auditing standards.

      Not-for-profit organizations: there is no overarching requirement for the audit of such entities in the UK unless they are constituted as charities, industrial and provident societies, friendly societies, trade unions or similar in which case they may be caught by legislation governing such entities (see Note 3). Additional auditing requirements for many entities are also mandated by professional bodies and trade associations such as the Law Society (for solicitors) and the Association of British Travel Agents (for travel agents) and other organisations. These bodies may specify auditing procedures, but they do not set auditing standards.


      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Auditing Practices Board (APB))


    44. For Auditing Practices Board (APB), 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

      Private company limited by guarantee.

      The APB is a subsidiary of the Financial Reporting Council - FRC - which is an independent body responsible for auditing and accounting standard setting, the oversight of the profession and the promotion of high standards of corporate governance in the UK. The FRC's remit derives from reports issued by the UK Government


      b. Name of standards

      Statements of Auditing Standards (SASs).

      The APB also issues Practice Notes, Bulletins and Statements of Investment Reporting Circular Standards


    45. How many voting members does the standard-setting body have?
      15


    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: The Executive Director is an employee; all other members of the APB are volunteers


    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.)?
      40% of APB members are required to be Responsible Individuals (ie eligible for appointment as company auditors under companies legislation). Of the remaining 60%, any accountants may not be office-holders nor involved in the governance of any accountancy body, nor partners in firms authorised to conduct audits. Representatives of the Accountancy Foundation, the Department of Trade and Industry, the Department of Trade and Enterprise (Republic of Ireland) and the Financial Services Authority are entitled to attend and speak at meetings but not to vote.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Nomination Committee of the Financial Reporting Council leads the appointment of members of the APB, following best practice


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


    50. For how many years has the standard-setting body been in existence?
      13 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)

      1,788,034

      Please enter the exchange rate used to calculate this number.

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

      1.78



    52. To what entity is the standard-setting body accountable?
      The Financial Reporting Council


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

      Before publishing or amending an SAS or any other standard, the APB publishes an exposure draft on its website, ensures that a hard copy of the document is circulated to the accountancy bodies and to other interested parties and allows at least three months (unless circumstances require a shorter period) for representations to be made. Where publications cause changes to be made tgo other previously issued publications, any such consequential changes are exposed for comments

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

      Private

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

      Decisions to establish, publish or amend or withdraw an SAS or an exposure draft thereof requires a majority of the votes of all the members of the APB (whether present at a meeting or not).

      Decisions to establish, publish amend or withdraw non-mandatory, guidance and other material relevant to auditing requires a simple majority of the votes of the members who are at a meeting where a quorum is present and at which the matter is decided upon.

      Any other questions are decided by a majority of votes actually cast at a meeting. In the case of equality of votes, the chairman of the meeting has a second, casting, vote.


    4. other relevant due process activities

      The APB has established a Technical Advisory Group and publishes an annual review of its activities. Further details may be found on www.frc.org.uk/documents/pdf/apbstandingordersextractsforwebsite.pdf


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      10 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 See ICAEW/ICAS/ICAI/ACCA See Note 5
      Professional Accountants in Business see ICAEW/ICAS/ICAI/ACCA/CIMA See Note 5 CIMA (See Note 6)
      Professional Accountants in the Public Sector None
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      CIMA – available through internet at
      www.cimaglobal.com/downloads/ethical_guidelines.pdf

      Note 5 (Q55) the ethics codes of the accountancy bodies are amended annually.

      Note 6 - Also for Professional Accountants in the Public Sector


      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (CIMA (See Note 6))


    56. For CIMA (See Note 6), 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

      CIMA is a member-owned accountancy body

      b. Name of standards

      CIMA's standards are currently the "Ethical Guidelines"


    57. How many voting members does the standard-setting body have?
      Up to 54 members in total -38 elected,12 co-opted,4 ex-officio. At present there are 52 members.


    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


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      See Question 57.

      Re Q61: Elected members can serve up to 3 years at a time but can be re-elected with no limit on the number of terms. Terms are staggered. Co-opted members up to 2 years, can be co-opted a further 2 times so making a total of 6 years, but can be co-opted again after a period off Council of at least 1 year. Ex officio members hold office for 4 years.


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


    62. For how many years has the standard-setting body been in existence?
      85 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)

      Please enter the exchange rate used to calculate this number.

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



    64. To what entity is the standard-setting body accountable?
      The ethical standard-setting functions of the accountancy bodies are subject to oversight by the Public Oversight Board for Accountancy (POBA) to ensure they are in the public interest.


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

      The accountancy bodies are not required to issue their ethical standards for public consultation, but generally do where there are significant policy issues

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

      CIMA Council meetings may be attended by CIMA members only

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

      Majority voting

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      6 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:
      The Education systems are governed by the UK parliament. Education is compulsory from the age of 5 to 16 at primary and then secondary schools.

      Further voluntary education or Universities follow attendance at school, from the age of 18.


    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.

      The Companies Act 1985 names those professional bodies which may regulate auditors. Accountants are not regulated, though the major accountancy bodies (members of the CCAB) are under the regulatory care of the Financial Reporting Council


    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
      No formal educational requirements are laid down for entry to CIMA Foundation Level, but successful completion or exemption is required to proceed further
      Professional examinations
      The CIMA Intermediate Level examinations may only be entered by those who have completed or been exempted from the CIMA Foundation Level
      Practical experience
      Evidence of three years' specified, monitored, relevant practical experience is required as well as completion of the Final Examination, for admission to membership
      Final qualifying examination
      Admission to membership can only be considered for those who have both completed the CIMA Final Examination and achieved the necessary practical experience
      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.
      CIMA Council, which delegates development of the qualification to the Student Development Committee

    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.

      Student Development Committee has an Education and Examination Board which deals with the day-to-day issues. An ad hoc group is usually set up to develop a new syllabus, and may also recommend changes on an annual basis. Changes to the syllabus must be agreed by Council.

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

      CIMA Council has up to 54 members.

    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?

      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?
      Upon request to CIMA

    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:
      Accountants and auditors face different practising requirements from each other. However, those requrements are consistent throughout the UK. Note there are no legal requriements to practise as an accountant in the UK.

      In the UK there are six senior accountancy bodies each with their own education requirements. Four of these bodies may issue Audit licences:

      ACCA, ICAEW, ICAS and ICAI.

      CIMA specialises in management accounting.

      CIPFA deals with the public sector.


    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?
      ICAEW/ICAS/ICAI/ACCA, as Recognised Supervisory Bodies (RSBs) under the Companies Act 1985


    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?
      ICAEW/ICAS/ICAI/ACCA as RSBs


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).



    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 See ICAEW Attachment UK Treasury (overseen by Financial Reporting Advisory Board (FRAB))
      Ministry/department UK Accounting Standards Board
      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?

      For principal documents the Resource Accounting Manual (RAM) can be obtained from the UK Treasury and is also available on-line at www.hm-treasury.gov.uk. The Code of Practice on Local Authority Accounting in the United Kingdom can be obtained from the Chartered Institute of Public Finance & Accountancy (IFAC member body). Extracts from legal authorities can be provided by CIPFA.

      Additional info re Q82: UK Accounting Standards Board is responsible for approval of Statements of Recommended Practice (SORPs). One of its specialist committees is the Public Sector and Not-for –profit Committee (PSNC) which makes recommendations to the Board


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (UK Treasury (overseen by Financial Reporting Advisory Board (FRAB)))


    83. For UK Treasury (overseen by Financial Reporting Advisory Board (FRAB)), 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

      Government Department with statutorily recognised advisory board (Financial Reporting Advisory Board - FRAB)

      b. Name of standards

      Resource Accounting Manual and other non-departmental public body, trading fund and public corporation requirements.


    84. How many voting members does the standard-setting body have?
      14


    85. 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:


    86. 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.)?
      The Terms of Reference for the Financial Reporting Advisory Board give powers of nomination to a variety of bodies. These include the UK Accounting Standards Board, the UK audit bodies, departmental bodies, Office of National Statistics and an independent economist


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      See above Question 86. Independent economist is nominated by the Head of Government Economic Service.


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


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


    90. 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

      Please enter the exchange rate used to calculate this number.

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

      n/a



    91. To what entity is the standard-setting body accountable?
      The FRAB reports to the Public Accounts Committee and Treasury Select Committee of the House of Commons. The FRAB’s last Report covered the period April 2002-March 2003.


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

      There is no public exposure of standards. There is internal consultation within Government and affected entities on changes to the Resource Accounting Manual /NHS Manual of Accounts and other accounting requirements for Non Departmental Public Bodies, Trading Funds & Public Corporations

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

      Private

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

      FRAB’s role is advisory and, as such, there is no formal approval process. FRAB will highlight areas where it disagrees with a treatment in the Resource Accounting Manual or considers that a departure from UK Generally Accepted Accounting Practice in its reports to Parliament.

    4. other relevant due process activities

      none


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


    Section 8B -- Standard-Setting (UK Accounting Standards Board)


    83. For UK Accounting Standards Board, 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

      National Standard Setter

      b. Name of standards

      SORPs for local government, further and higher education, social housing, and charities components of public benefit sector


    84. How many voting members does the standard-setting body have?
      13


    85. 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: See also Section for detail on ASB. The members of its Public Sector and Not-for-profit Committee are involved on a voluntary basis.


    86. 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 job allied with need to ensure adequate representation from different components of public benefit sector.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members are appointed by the ASB.


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


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


    90. 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)

      See Section 9

      Please enter the exchange rate used to calculate this number.

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

      See Section 9



    91. To what entity is the standard-setting body accountable?
      The PSNC reports to the full Board (ASB), which is one of the operational bodies of the UK Financial Reporting Council


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

      For Accounting Standards Board SORPS are required to be exposed for a 3-month period.

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

      Private

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

      See Section 9 for full ASB approval requirements. Full Board of ASB must also approve consultation exposure drafts. The Public Sector and Not-for-profit Committee operates on “a simple majority of those voting” basis; the substance of the arguments of dissenting voices will be brought to the attention of the full Board.

    4. other relevant due process activities

      ASB PSNC has produced a Discussion Paper on the Application of the UK Statement of Principles to the Public Benefit Sector, which it subjected to an exposure period of three months in 2003. It will follow this up with a further exposure draft in 2004 of proposals for a full interpretation.


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



    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 See 94a for further detail 8/1990 UK Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      from www.asb.publications.com

      Re Q94: There is no legal authority in the UK that requires compliance with accounting standards. However, with effect from August 1990 UK companies, other than small and medium sized companies, have been required by the Companies Act 1985 to state whether their accounts have been prepared in accordance with applicable accounting standards and to give particulars of any material departure from those standards and the reasons for it.

      With effect from January 2005, group accounts for UK listed companies will be required to comply with standards prepared by the International Accounting Standards Board, when they have been approved by the European Commission. The UK Government currently intends that individual companies, and other groups, will be able to choose to comply with IASB standards.


      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (UK Accounting Standards Board)


    95. For UK Accounting Standards Board, 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

      Agency appointed jointly by Government and the private sector

      b. Name of standards

      Financial Reporting Standards


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


    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: two employed, up to eight voluntary


    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.)?
      Not stated - in practice there appears to be a balanced membership


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


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


    101. For how many years has the standard-setting body been in existence?
      14 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)

      3,810,600

      Please enter the exchange rate used to calculate this number.

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

      1.80



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


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

      Draft Standards exposed for comment

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

      Private

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

      Seven members required to vote in favour when Board has ten members; six when it has fewer than ten

    4. other relevant due process activities

      Draft Standards sometimes preceded by discussion papers, which are exposed for public comment


    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:
      UK Financial Services Authority (FSA)


    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:
      See answers to 10D


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

      none

    2. accounting and auditing standard-setting

      none

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

      None other than through their enforcement of the Listing Rules. This role is mainly concerned with the pre-approval of information supplied with prospectuses or where shareholder approval is required



    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
      London Stock Exchange
      Alternative Investment Market
      OFEX



    Section 10B -- Stock Exchange
    London Stock Exchange Details


    110. For London 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.

      n/a

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

      n/a

    3. How enforcement actions are administered.

      n/a


    Section 10B -- Stock Exchange
    Alternative Investment Market Details


    110. For Alternative Investment Market, 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.



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



    3. How enforcement actions are administered.



    Section 10B -- Stock Exchange
    OFEX Details


    110. For OFEX, 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.



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



    3. How enforcement actions are administered.




    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?

      Independent oversight of the regulation of the auditing profession by the recognised supervisory and qualifying bodies; monitoring of the quality of the auditing function in relation to economically significant entities; independent oversight of the regulation of the accountancy profession by the professional accountancy bodies

    2. The number of members on the oversight body

      9

    3. Its powers

      In relation to audit, the Professional Oversight Board for Accountancy (POBA) will:

      Discharge on behalf of the FRC the statutory responsibilities delegated by the Secretary of State for authorising professional accountancy bodies to act as supervisory bodies and/or to offer a recognised professional qualification. As part of this, in relation to audit, POBA will ensure that:

      The Recognised Supervisory Bodies (RSBs) comply with all statutory requirements for recognition (set out in Part II of Schedules 11 and 12 of the Companies Act 1989, and

      the RSBs comply with the independent standard-setting, monitoring and disciplinary arrangements the legislation provides for.

      POBA will also monitor the quality of audits of economically significant entities through an independent Audit Inspection Unit (AIU). These entities will include listed companies, major charities, major pension funds, major mutual organisations and other major public interest entities. The AIU will monitor quality of audits by reviewing audit processes including audit judgements. It will visit audit firms which audit listed companies, major charities, major pension funds, major mutual organisations and other major public interest entities, agree amendments with audit firms to their procedures where appropriate, and make recommendations to the relevant RSB for regulatory action if appropriate.


    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

      POBA was launched on April 1 2004, and the AIU does not begin its work until June 2004. Its authorisation function will not commence until legislation currently before Parliament is enacted.

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

      The RSBs will retain their regulatory powers. POBA will be given the power to recognise RSBs, and could ultimately revoke recognition under the Companies Act 1989

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

      POBA will be accountable to the UK Government's Department of Trade and Industry (DTI)


    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:
      The Financial Services Authority (FSA) is responsible for regulation of banks, insurers and investment businesses. It has no responsibility for regulating accounting services, including those related to the audit and financial reporting of regulated financial services businesses. The FSA sets the accounting and other requirements for regulatory reporting purposes and can require regulated businesses to obtain an auditors report on certain matters (eg compliance with client money rules) or to commission special reports. The FSA has no role in setting accounting or auditing requirements for general purpose financial reporting. Although FSA reporting rules generally follow principles established in accounting standards, it is not required to do this, and on occasions the regulatory reporting requirements will differ from financial reporting standards.


    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:
      The FSA monitors and enforces regulatory reporting requirements. It has no role in monitoring or enforcing financial reporting or auditing standards.


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

      none

    2. accounting and auditing standard-setting

      none

    3. review of financial statements prepared by listed entities

      The FSA may review audited financial statements of regulated bodies as part of its overall supervision of banks. The purpose would be to assess compliance with FSA rules rather than monitoring compliance with accounting standards.

    4. enforcement of accounting, reporting and auditing requirements

      FSA responsibility is limited to regulatory reporting. Its range of regulatory tools includes fines, suspension of licences and criminal prosecution.



    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.
      Financial Services Authority (FSA) - see Section 10D


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Non-Governmental organisation established by the Financial Services and Markets Act 2000. The FSA has a series of high-level principles supported by detailed rules, which are enacted by Statutory Instrument (SI) - which have the status of secondary legislation and therefore provide legal authority


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

      none

    2. accounting and auditing standard-setting

      none

    3. review of financial statements prepared by listed entities

      The FSA may review audited statements of regulated bodies as part of its overall supervision of banks. see Section 10A for description of FSA's future responsibility for UK listing rules

    4. enforcement of accounting, reporting and auditing requirements

      FSA responsibility is limited to regulatory reporting. It has a range of enforcement tools available, including fines, suspension of licences and criminal prosecution



    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.
      Financial Services Authority (FSA) - see Section 10D


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Non-Governmental organisation established by the Financial Services and Markets Act 2000. The FSA has a series of high-level principles supported by detailed rules, which are enacted by Statutory Instrument (SI) - which have the status of secondary legislation and therefore provide legal authority


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

      none

    2. accounting and auditing standard-setting

      none

    3. review of financial statements prepared by listed listed entities

      The FSA may review audited statements of regulated bodies as part of its overall supervision of banks. see Section 10A for description of FSA's future responsibility for UK listing rules

    4. enforcement of accounting, reporting and auditing requirements

      FSA responsibility is limited to regulatory reporting. It has a range of enforcement tools available, including fines, suspension of licences and criminal prosecution



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.


    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.

      The RSBs all have arrangements for monitoring compliance of auditors/audit firms.



    125. Under what authority does the organization conduct the program of quality assurance review?
      Under the authority that derives from the status of an RSB under the Companies Act 1985


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      The RSBs carry out audit monitoring using their own (or shared) specialist audit inspection staff. The AIU will also have its own specialist inspection staff



    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.
      CIMA Council, delegated in practice to the CIMA Investigation and Disciplinary Committees


    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?
      undefined; quorum 3


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


    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.)?
      Merit


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      CIMA Appointments Committee


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


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

      415,950

      Please enter the exchange rate used to calculate this number.

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

      1.77 (specify currency)



    137. To what entity is the body accountable?
      Independent


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



     

     

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