Chartered Institute of Public Finance and Accountancy
Member | Established: 1885 | Member since 1977
CIPFA is a voluntary membership organization established in 1885. It is the only professional accountancy body in the UK that specializes in public services and aims to advance public finance and best practices. CIPFA works with the accountancy profession and governments around the world to promote and support the implementation of international public sector accounting standards. The institute provides education and training for professional accountants and offers a range of high-quality advisory, information, and consultancy services to public sector organizations. In addition to being a member of IFAC, CIPFA is also a member of Accountancy Europe.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
The Financial Reporting Council (FRC) and the four Recognized Supervisory Bodies (RSBs) in the UK (ACCA, CAI, ICAEW, and ICAS) share responsibility for the quality assurance (QA) review system governing audits and assurance engagements in accordance with the Companies Act of 2006 and the Statutory Auditors and Third-Party Auditors Regulations 2016 (SI 2016/649)). All have indicated that they have a fully operational QA review system in place that is aligned with SMO 1 requirements.
Most CIPFA members are professional accountants in business and are not subject to direct QA reviews; therefore, the institute does not maintain a QA system for its members. About 400 members are, however, self-employed, providing accountancy services to clients.
In 2016, CIPFA entered a strategic alliance with Institute of Chartered Accountants of Scotland (ICAS) to offer an integrated qualification for auditors. As part of the strategic alliance, CIPFA members in practice can register with ICAS for Anti Money Laundering Supervision as an alternative to registering with Her Majesty’s Customs and Revenue as the default regulator. Professionals gaining this landmark qualification benefit from dual designation of Chartered Public Finance Accountant (CPFA) and Chartered Accountant (CA) as well as membership at ICAS.
SMO 2: International Education Standards
The six Recognized Qualifying Bodies (RQBs) deliver the initial and continuing professional education (IPD and CPD) requirements for statutory auditors in the UK. The FRC has an agreement with the six chartered bodies (ACCA, the Association—CIMA, CIPFA, ICAEW, CAI, and ICAS) and the AIA to oversee IPD and CPD for accountants.
Five RQBs (ACCA, CAI, ICAEW, ICAS, and CIPFA) as well as AAT, the Association—CIMA and IFA are members of IFAC, and all confirm that their professional accountancy qualifications align with the requirements of the revised 2015 IES.
CIPFA requires its aspiring members—students and trainees—to follow its Professional Qualification Program, which is an integrated program of education and workplace experience that ensures the range of revised 2015 IES requirements are reflected in the training. CIPFA’s Education and Training Center (CETC) is the only training provider specialized in public financial management. CETC offers extensive training provision through qualified tutors, who use their specialized knowledge to deliver high quality training within a public sector context.
The Practical Experience Portfolio, which the institute reports is fully compliant with revised IES, blends input and output-based approaches, and the latter includes a requirement for students to reflect on the ethical considerations in their practical experience.
CIPFA’s Professional Accountancy Qualification (CIPFA PQ) is reviewed on a regular basis, and the content is checked annually as part of ongoing syllabus maintenance. Revised 2015 IES are at the core of the CIPFA syllabus development process and as part of any review are taken into direct consideration. The institute last updated its professional qualification syllabus in 2015 and as result, in 2019 has commenced a major review of the curriculum (to include syllabus, assessment, learning materials and modes of learning) focused on a new Public Sector Financial Management competency framework to be developed based on a wide ranging consultation with employers and partner PAOs internationally. The review will ensure that revisions to all Education, Accounting and Auditing standards are fully incorporated. In 2019 CIPFA was asked to join IFAC in the development of an international PFM competency framework.
The institute provided responses to IAESB consultations and takes advice from volunteer practitioners through its Members and Students Board (MSB), which represents members in the qualification development process. CIPFA reports that it communicates updates and notifications on revised IES, International Education Practice Statements and International Education Information Papers to the MSB. New requirements are communicated as necessary through CIPFA newsletters and website.
SMO 3: International Standards on Auditing
The Financial Reporting Council (FRC) is the authorized body for setting auditing standards in the UK in accordance with the Companies Act of 2006 and Statutory Instrument on Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012 (SI 2012/1741). All financial statement audits must be conducted in accordance with International Standards on Auditing (UK) issued by the FRC. ISAs (UK) are based on the ISA issued by the IAASB, with some additions to account for UK Company law.
Only a small percentage of CIPFA members are in public practice and require implementation support on ISA. To support these members, the institute has an integrated qualification with the Institute of Chartered Accountants of Scotland.
Although CIPFA has no direct responsibility in setting auditing standards in the UK, it plays an active role in the national and international standard-setting process and promotes the adoption of ISA to national standard-setters. CIPFA reports that it supports the adoption of IAASB requirements in discussions with the FRC and the National Audit Agencies—the entities that determine which standards should be used for public sector audits.
CIPFA’s Accounting and Auditing Standards Panel (AASP) develops most of the institute’s responses to consultations on UK standards for financial reporting and audit, working in partnership with other CIPFA panels and working groups where appropriate. A key initiative of the AASP is to respond to the work of the IAASB and related work by the FRC which seeks to improve audit quality and auditor reporting. The AASP also pursues other projects as part of CIPFA's thought leadership and promotion of good practice. CIPFA reports that it also contributes to IAASB discussions by participating on the Consultative Committee of Accountancy Bodies, which is an umbrella group of the chartered professional bodies of British qualified accountants.
To further support implementation of the standards amongst audit professionals, CIPFA produces a magazine for the audit practitioner, Audit Viewpoint, which communicates expert, practical advice on a wide range of audit issues. Each edition discusses topical issues, introducing new concepts and disseminating good practice. It is also used to update readers on the activities of CIPFA's Audit Panel.
Finally, CIPFA also engages in international development and training work and through this work it promotes ISA where relevant to ‘client’ governments.
SMO 4: Code of Ethics for Professional Accountants
In accordance with their charters and by-laws, professional accountancy organizations (PAOs) in the UK are authorized to establish ethical requirements for their members.
All PAOs in the UK indicate that they have adopted the requirements of the IESBA Code of Ethics (2018 version). Furthermore, all PAOs indicate that they have an ongoing process to consider and incorporate new and amended requirements issued by the IESBA where they are not in conflict with national laws and regulations.
CIPFA reports that the most recent update of the Code (2018 International Code of Ethics for Professional Accountants) was approved for adoption with effect from 1 November 2018 by the CIPFA Council, and has become CIPFA’s Standard of Professional Practice on Ethics. CIPFA was the first professional accountancy body in the UK to adopt the new Code and demonstrated its leadership and support to members by also publishing revised materials and a suite of ethical case studies. The case studies were gathered over two days from finance professionals at CIPFA’s annual conference.
CIPFA continues to monitor the work of the IESBA and participates in the international standard-setting process by way of its involvement in the Ethic’s Group of the Consultative Committee of Accountancy Bodies, which submits comments as a group on behalf of the UK bodies to the IESBA. During 2019 CIPFA established a Working Party, chaired by a former President, Margaret Pratt, to recommend ways in which CIPFA could increasingly promote Ethics within its Member and student communities. A wide ranging series of recommendations are now being implemented including regional ethics workshops, a commitment to increase the volume and depth of ethics and governance within the professional syllabus and assessment at all levels, and the use of multi-media to promote CIPFA’s commitment to ethics as a distinguishing feature of its membership (e.g. a new video on the cipfa.org website).
To support implementation, the institute provides information, guidance, training, and other resources to its members. Updates are shared with members via newsletters and online resources, and ethics are included as part of the professional qualification syllabus. CIPFA continues to develop and maintain a resource called Ethics and You for its members and the public, which is a compilation of case studies and explanatory material to provide guidance in the application of ethical requirements.
The institute continues to provide information on whistleblowing policies via its website. Furthermore, to support its members in dealing with ethical dilemmas, it provides access to professional staff as well as access to an Ethics Sounding Board, which is a panel of senior members willing to discuss ethical issues confidentially. Lastly, as part of its process for monitoring issues related to adoption and implementation, CIPFA monitors the types of issues reported by members against the coverage of the SOPP on Ethics. The institute also continues to work through the Public Accountants in Business Committee of IFAC, to address the importance of ethical issues and resources in effective public sector governance.
SMO 5: International Public Sector Accounting Standards
The UK Treasury is responsible for developing standards and policies for Central Government financial statements. The Chartered Institute of Public Accountancy (CIPFA) and the Local Authority Scotland Accounts Advisory Committee (LASAAC) work together on the Local Authority Code Board, a standing committee of CIPFA and LASAAC, to set accounting standards for local governments in the UK. The Code of Practice is based on EU-adopted IFRS and draws on IPSAS and Financial Reporting Standards issued by the Financial Reporting Council.
CIPFA strongly supports the standard-setting work of the IPSASB and greatly values having Ian Carruthers as the ongoing IPSASB Chair. CIPFA provides input to the steering committees and task forces of the IPSASB and responds to all IPSASB consultations, after seeking advice from its volunteer practitioners through the AASP. Information on AASP activities and priorities in previous years, including all of the standards to which it has submitted comments, can be found in AASP's Annual Reports.
To support implementation of IPSAS amongst its members, the institute continues to offer an IPSAS Diploma, an IPSAS Certification, and an IPSAS Certification in Spanish all of which have been revised to reflect “IPSAS 2.0.” All three qualifications are accessible anywhere through a flexible online learning and assessment program. CIPFA also includes IPSAS in the initial professional development and continuing professional development of its professional accountancy qualification for its members. The institute’s members are also regularly notified about the IPSASB’s activities through its newsletter and website.
CIPFA continues to promote the use of IPSAS where relevant to client governments and SAIs as part of CIPFA’s international development and training work. In terms of the quality of public sector financial reporting internationally, including IPSAS adoption, CIPFA has in 2018, published in partnership with IFAC and Zurich University of Applied Science, an International Public Sector Financial Accountancy Index. The Index contains the projected impacts of reforms in jurisdictions planned for implementation by 2023.
SMO 6: Investigation and Discipline
In accordance with their charters and by-laws, professional accountancy organizations (PAOs) are authorized to establish systems of investigation and discipline (I&D) for their members for failure to comply with applicable standards of professional conduct. The PAOs (both RSBs and others: AAT, the Association—CIMA, CIPFA, and IFA) have reported that they have I&D systems in place that fulfill the requirements of SMO 6 requirements.
CIPFA’s I&D system is overseen by the UK Financial Reporting Council (FRC) and the Irish Accounting and Auditing Supervisory Authority, both of which carry out regular inspection visits. The institute is a participant in the FRC’s Accountancy Scheme, an independent disciplinary scheme for the UK accountancy profession for the consideration of public interest cases. Such cases may be referred to the FRC Accountancy Scheme for independent investigation and prosecution.
CIPFA conducted a detailed self-assessment within its 2017 SMO Action Plan indicating how its I&D system meets and maintains fulfillment with SMO 6 requirements. The institute also has detailed information about its system on its website, including information for the public and members and students on how to submit complaints.
SMO 7: International Financial Reporting Standards
The Financial Reporting Council (FRC) has the authority to adopt accounting standards in the UK in accordance with the Companies Act of 2006 and Statutory Instrument on Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012 (SI 2012/1741).
EU-endorsed IFRS are required to be applied in consolidated financial statements of parent companies with securities that are traded on a regulated market. Other entities apply ‘reduced disclosure’ EU adopted IFRS, or simpler Financial Reporting Standards (FRS) developed by the FRC, depending on the size, type of company, and the nature of activities that is conducted. FRS is based on the IFRS for SMEs, with significant modifications.
The institute reports that it responds to consultations issued by the IASB, especially on issues that are relevant to the public sector, taking advice from volunteer practitioners through the Accounting and Auditing Standards Panel (AASP). Information on AASP activities and priorities in previous years, including all of the standards to which it has submitted comments, can be found in AASP's Annual Reports. CIPFA is also involved in providing a secretariat role for addressing accounting and financial reporting for not-for-profit organizations in the UK and internationally.
CIPFA continues to be active in delivering implementation support to relevant stakeholders through its training programs, specialist network groups and conferences. Additionally, the institute continues to provide its members with information about the activities of the IASB through its conferences, seminars, newsletters, and its website. Lastly, IFRS are also incorporated into the syllabus of the professional accountancy qualification, including the international variant.
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