Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili
Member | Established: 2005 (original entity 1953) | Member since 1977
The CNDCEC is a mandatory membership organization for professional accountants established by the Legislative Decree No. 139/05. Its members include Esperti Contabili (accountants who are authorized to deliver accounting services, perform tax fillings, and limited audit functions) and Dottori Commercialista (accountants who are authorized to perform the same services as Esperti Contabili and may also undertake company appraisals, insolvency procedures, defend clients before tax courts, and perform full scope audit and assurance services for non-statutory audits). According to Article 29 of the Legislative Decree No. 139/2005, the CNDCEC operates as the umbrella organization that coordinates territorial chapters.
The CNDCEC is responsible for a wide range of activities including: (i) developing ethical requirements for its members; (ii) monitoring and enforcing its members’ compliance with the profession’s technical and ethical standards; (iii) assessing and approving the continuing professional development programs established by the territorial chapters; (iv) representing the profession at national and international level; and (iv) formulating opinions on draft laws, as necessary.
In addition to being an IFAC member, the CNDCEC is also a member of Accountancy Europe, the European Federation of Accountants and Auditors, the Latin Integration Committee of Europe and the Americas, and the Fédération des Experts-Comptables Méditerranéens.
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.
Last updated: 11/2022
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Status of Fulfillment by SMO
SMO 1: Quality Assurance
The CNDCEC does not have any regulatory responsibility for establishing a quality assurance (QA) review system in Italy. Its members who are registered as statutory auditors (Revisori Legali) and conduct audits of Public Interest Entities (PIEs) are subject to QA reviews by the Commissione Nazionale per le Società e la Borsa (CONSOB), and those conducting audits of non-PIEs subject to QA reviews by the Ministry of Economy and Finance (MEF).
The CNDCEC reports that CONSOB’s system is aligned with SMO 1 best practices. QA reviews by the MEF for audits of non-PIEs will be conducted according to the ministerial decree which is expected to be enacted but is no clear timeline for the final adoption of the QA system for non-PIEs.
The CNDCEC has been an active participant in the special advisory panel, which is tasked with the drafting of the decrees and regulations implementing the QA review system and relevant standards. The institute indicates that it promotes the SMO 1 requirements during the development process of the regulation and has offered to undertake the operation of the proposed QA review system for non-PIEs in support of the MEF.
To support its members that are statutory auditors, the CNDCEC developed a sample of quality control manual for firms led by a sole practitioner, based on IFAC Guide for Quality Control for Small- and Medium-Sized Practices (Third edition), offers continuing professional development focused on QA reviews and ISQC 1, translated the IFAC SMP Committee’s Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition.
The CNDCEC is encouraged to provide updates on the progression of the adoption and implementation of the QA system for non-PIEs. In addition, as part of its continuous efforts, the CNDCEC encouraged to disseminate the upcoming IAASB proposed quality management standards and begin supporting members to understand the implementation changes.
SMO 2: International Education Standards
In Italy, the Ministry of Education, University, and Research is responsible for implementing initial professional development (IPD) requirements and the CNDCEC is responsible for adopting continuing professional development (CPD) requirements. Professional accountants—qualified as either Dottori Commercialista or Esperti Contabil—are subject to educational requirements, delivered by the universities, practical experience requirements, and passing state final examinations. Both are also subject to the CPD requirements of the CNDCEC, which as reported by CNDCEC are aligned with the revised IES. The CNDCEC reports that it regularly monitors and engages with the authorities to encourage the incorporation of the IES requirements.
The CNDCEC cooperates with universities and its territorial chapters to promote bilateral agreements for the definition of specific educational content, that permit candidates to be exempt from certain sections of the state examination based on the knowledge gained during their practical experience internship. The CNDCEC has also signed a framework agreement with the Ministry of Education, University, and Research and the Ministry of Justice, which is to be used as a guideline for the territorial chapters and universities. The agreement establishes the exemption from one written examination and the possibility of starting the practical experience during the university studies.
Furthermore, the CNDCEC has established regional schools to provide special CPD courses, which emphasize a strong practical approach, in a selected number of professional matters that require high specialization.
The CNDCEC reports that it regularly monitors, reviews, and takes the necessary actions, such as the bilateral agreements between the universities and its territorial chapters, and its relation with the Ministry of Education, University, and Research and the Ministry of Justice to continue strengthening the IPD and CPD arrangements for its members.
Lastly, the institute has participated in the international standard-setting process by submitting comments from its experience and perspective.
The CNDCEC is encouraged to clarify whether if the revised IES have been incorporated into the IPD requirements, and provide an update on the plan to promote the incorporation of the 2019 revised IES, effective January 2021, that address learning and development for information and communications technologies (ICT) and professional skepticism.
SMO 3: International Standards on Auditing
Although the Ministry of Economy and Finance (MEF) formally approves and issues applicable auditing standards, the CNDCEC plays an active role in the standard-setting process by participating in the special advisory panel responsible for drafting and translating auditing standards. Based on the special advisory’s proposals, the MEF has adopted ISA for application in Italy. In line with its responsibilities as a panel member, the CNDCEC reports that it has established an ongoing process to monitor, incorporate, and translate new and amended standards into national requirements on an ongoing basis, having translated the 2020 Handbook.
The CNDCEC indicates that it supports its members with the implementation of the audit standards by providing training and guidelines, such as a translation of the IFAC SMP Committee’s Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition. In addition, the CNDCEC confirms its participation in the international standard-setting process by providing comments on IAASB Exposure Drafts.
The CNDCEC has demonstrated that it has an ongoing process in place to maintain its level of fulfillment with the SMO 3 obligations and is committed to continuous improvement.
SMO 4: Code of Ethics for Professional Accountants
The CNDCEC is responsible for setting ethical requirements for its members and adopted the CNDCEC Code of Ethics in 2009 with subsequent updates in 2015 and 2019. The CNDCEC reports that the combination of the legal requirements and the rules incorporated in its Code of Ethics are set in accordance with the IESBA Code of Ethics requirements and are more restrictive in some respects.
Furthermore, the institute is also part of a special advisory panel, which is responsible for drafting and proposing the ethical requirements for statutory auditors to the respective regulators. In 2013, the special advisory panel developed ethical requirements for statutory auditors based on the 2013 IESBA Code of Ethics. The CNDCEC reports that a ministerial act was issued in November 2018 incorporating confidentiality obligations for statutory audit activity in Italy based on the 2012 IESBA Code. Meanwhile, specific independence rules will be enacted in June 2020, effective January 2021, based on the 2018 International Code.
To support its members with the implementation of the Code of Ethics, the CNDCEC provides training, guidance, and has translated the 2016 version and is in the process to translate the 2018 version of the IESBA Code of Ethics. In addition, it reports to monitor new, proposed, and revised international standards and consider needs for adaptation at the national level and provide comments to IESBA issued Exposure Drafts.
The CNDCEC is encouraged to clarify its plans to update and revised the ethical requirements, given the 2018 International Code of Ethics, which is a completely restructured and rewritten Code. The CNDCEC is encouraged to provide information on planned actions or initiatives related to raising awareness of the 2018 IESBA Code of Ethics.
SMO 5: International Public Sector Accounting Standards
In Italy, public sector accounting standards are set in Law No. 196/2009. The implementation of the national standards is supported by the Corte dei Conti (Auditor General) and Ragionera Generale dello Stato (State Comptroller), a unit of the Ministry of Economy and Finance.
The CNDCEC reports that it contributes significantly to advocacy, consultation, and research activities to encourage the adoption of IPSAS. For example, the CNDCEC participated in a project with academia to assess the applicability of IPSAS to different public sector entities. The project was launched at the end of 2015, and the first draft of this study was finalized in December 2016. The CNDCEC subsequently participated in a task force on the impact assessment study of the application of IPSAS to different public sector entities.
The CNDCEC indicates that it has translated the 2012 IPSAS Handbook and organized continuing professional development courses, conferences, and guidance on the topic. The CNDCEC completed a translation of all the IPSAS in 2017 and has shared the translation with stakeholders. Additionally, the institute states that it monitors new and amended pronouncements issued by the IPSASB and disseminates them both to its members and the public.
The CNDCEC is encouraged to provide updates on the legislative changes that would mandate a stronger application of accrual-based accounting standards, and how it plans to support its members with the implementation of the changes.
SMO 6: Investigation and Discipline
The CNDCEC’s territorial chapters are responsible for establishing an investigative and disciplinary (I&D) system for its members while the CNDCEC acts as an appeal court. The institute reports that in 2013, its own I&D regulation was updated to incorporate the SMO 6 requirements related to the composition of the Board that issues sanctions, thereby ensuring that its system meets all SMO 6 best practices.
Meanwhile, the CNDCEC’s 144 territorial chapters operate their own I&D procedures based on guidance from the CNDCEC. An assessment of its territorial chapters’ I&D policies and processes against the best practices of SMO 6 has identified gaps, such as a linkage with the results of QA reviews and not mandatory requirement to include non-accountants in the disciplinary committee.
The CNDCEC also collaborates with the Ministry of Economy and Finance and the Commissione Nazionale per le Società et la Borsa in an advisory role regarding the I&D of statutory auditors as it is not directly responsible for the management of these procedures. The CNDCEC supports the regulators to ensure that their system is aligned with SMO 6 requirements and regularly assess the need for coordination regarding disciplinary actions for any of its members that are registered as statutory auditors.
The CNDCEC is encouraged to report on the guidance and steps it has taken to harmonize as much as possible the territorial chapters’ I&D systems with the best practices of SMO 6. In addition, the CNDCEC is encouraged to leverage its advisory role in liaising with the Ministry of Economy and Finance and the Commissione Nazionale per le Società et la Borsa to conduct an assessment of their I&D policies against the best practices of SMO 6 and promote policies to address any gaps as part of implementing the new decree.
SMO 7: International Financial Reporting Standards
The EU Regulation EC 1606/2002 and the Legislative Decree 38/2005 required companies to apply IFRS as endorsed by the EU. Following this regulation, the Legislative Decree 145/2018, restricted the scope provided by the Legislative Decree No. 38/2005 and required that IFRS are mandatory only for listed companies, monitored by the Commissione Nazionale per le Società e la Borsa (CONSOB). All other companies can choose to apply IFRS or Italian Accounting Standards. Although the Organismo Italiano di Contabilità (OIC) is the entity responsible for the adoption of corporate accounting standards, the CNDCEC actively participates and contributes to its standard-setting process and technical activities as one of the founding members of the OIC.
The CNDCEC reports that it monitors and reviews changes to EU legislation and subsequently, promotes the necessary changes to the national legislation. Additionally, since 2010, the CNDCEC has been participating in public consultations on the approach of adopting accounting standards for Small-and Medium-Sized Enterprises.
To support its members with the implementation of applicable standards, the CNDCEC organizes continuing professional development courses and develops guidelines on IFRS-related topics. In addition, the CNDCEC reports that it monitors new and amended standards and participates in the international standard-setting process by providing comments on IASB Exposure Drafts.
CNDCEC has regularly demonstrated that it has an ongoing process in place to maintain its level of fulfillment with the SMO 7 obligations and is committed to continuous improvement.
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