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Institute of Chartered Accountants of Scotland

Member | Established: 1854 | Member since 1977

ICAS is a voluntary membership organization for chartered accountants that was created by Royal Charter in 1854. ICAS has members in the UK and more than 100 countries around the world. ICAS is an educator, examiner, regulator, and thought leader. It regulates its members and their firms and is an RQB and RSB in accordance with the UK Companies Act 2006. It is also a PAB and RAB under the Companies Act 2003 in Ireland. In addition to being a member of IFAC, ICAS is a member of the Accountancy Europe and CCAB.

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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: 09/2019
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SMO Action Plan

Status of Fulfillment by SMO

  • 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, and that the QA review systems are compliant with SMO 1 requirements.

    The FRC carries out the QA reviews of major public interest entities (PIEs) through its Audit Quality Review (AQR) team. On an annual basis, ICAS provides the FRC with a regulatory plan, which sets monitoring objectives for the year. In addition, it also provides a detailed return to the FRC which provides details on the monitoring outcomes for each calendar year.

    ICAS has processes in place to address SMO 1 requirements on an ongoing basis. These processes are designed to maintain their SMO fulfillment level and address new developments as appropriate. ICAS maintains the public register for all UK RSBs, and conducts regular training for its QA staff to keep them abreast of relevant technical, legal, and ethical requirements as well as new and revised accounting and auditing standards.

    To support its members’ compliance with applicable rules and guidelines, ICAS disseminates audit and assurance technical resources and guidance on good practice. The institute has developed an electronic annual returns system for registered firms along with a help sheet to assist in completing the returns.

    ICAS publishes its full responses to consultations on issues of Audit and Assurance on its website. The Institute reports that it will continue to be active in consultations and seek to influence developments in audit policy and regulatory reform.

    Current Status: Sustain

  • SMO 2: International Education Standards

    The six Recognized Qualifying Bodies (RQBs) deliver the initial and continuing professional education (IPD and CPD) 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 meet the IAESB’s requirements set out in the revised 2015 IES.

    ICAS’ Chartered Accountants (CA) qualification encompasses everything from developing and setting the syllabus on an annual basis to preparing course materials, designing and delivering the education models, setting and marking certain of the examinations. ICAS undertakes regular benchmarking activities (IES 1-6) with other professional accountancy organizations (PAOs) in the UK to ensure that all aspects of the CA qualification reflect the knowledge, skills and values required by newly-qualified accountants. ICAS reports to help other PAOs around the world in training, developing, or enhancing their education and training programs.

    ICAS requires its members to fulfill CPD requirements in line with IES 7 and continues to use IES 7 as a benchmark on an ongoing basis. It also uses IES 8 as a benchmark against which to monitor CPD compliance for auditors. ICAS provides its members with ample online learning courses and online training courses to fulfill the requirements.

    Current Status: Sustain

  • 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 ISAs issued by the IAASB, with some additions to account for UK Company law.

    ICAS has no direct responsibility for the adoption and implementation of ISA in the UK. Nevertheless, it established an Audit and Assurance Committee and an Assurance and Sustainability Department, both of which support the adoption and implementation of ISA. ICAS has processes in place to address the SMO 3 requirements on an ongoing basis; those processes are designed to maintain the SMO fulfillment level and address new developments as appropriate. It also promotes the development, adoption, and implementation of ISAs by supporting the work of the IAASB and developing a range of adoption and implementation support activities. For example, the institute ensures that details of new or revised IAASB standards and other documents are made available on the ICAS website and via “The CA” magazine.

    The institute supports implementation of ISA through the provision of information on standard-related topics and news. ICAS offers training courses, webinars, podcasts, and videos that highlight changes to ISA and focus on the most common problem areas found by audit monitoring for ICAS members.

    ICAS participates in the international standard-setting process by disseminating IAASB updates and exposure drafts to members and submitting responses to the IAASB.

    Current Status: Sustain

  • 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.

    Having developed and adopted the ICAS Code of Ethics based on the 2018 IESBA Code of Ethics, the institute focuses on supporting compliance. The ICAS has processes in place to address the SMO 4 requirements on an ongoing basis; those processes are designed to maintain the SMO fulfillment level and address new developments as appropriate.

    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. ICAS also actively supports helping members to apply the Code of Ethics in practice and has published a series of ethical dilemmas, and other ethics related videos for professional accountants which can be accessed on the website. The institute hosts annual events and webinars that highlight key ethical issues focused on lessons from corporate scandals. Furthermore, its members have access to the ICAS Ethics Helpline Service for anonymous queries related to ethical dilemmas.

    The ICAS Ethics Board provides comments on IESBA Exposure Drafts and other consultations including those of the Financial Reporting Council on ethical matters. It also seeks the views of the wider ICAS membership base where appropriate.

    Current Status: Sustain

  • 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.

    ICAS supports the standard-setting work of the IPSASB. ICAS established a Public Sector Panel responsible for providing comments on IPSASB consultations which are published on the ICAS website. The Panel considers national and international policy and approaches, as well as their application whether within a particular jurisdiction and/or within relevant sectors, such as local government, central government, health, housing, further and higher education. ICAS also established the Department of Business Policy to further support the activities related to public sector issues through participation in national and international debates.

    Where appropriate, IPSASB publications relevant to accruals accounting are reported in the institute’s monthly magazine ‘The CA’ which is circulated to all members.

    Current Status: Sustain

  • 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.

    ICAS has processes in place to address SMO 6 requirements on an ongoing basis; those processes are designed to maintain the SMO fulfillment level and address new developments as appropriate. It also supports the Financial Reporting Council and other RSBs in reviewing and amending the disciplinary scheme in line with SMO 6 requirements.

    ICAS reports that its I&D system is orientated to the public interest, with the Investigation Committee having 50% lay member representation. The ICAS has also established a case review procedure whereby all cases that are closed without reference to the Investigation Committee are nevertheless reviewed by three members of the Investigations Committee, including two Public Interest Members to ensure compliance with the principles of fairness and transparency. ICAS investigation regulations and discipline and appeal tribunals regulations are available online for public access. ICAS also publishes its discipline and appeals tribunals as well as disciplinary notices by the ICAS Investigation Committee on its website.

    ICAS maintains a program of customer experience testing and soliciting feedback, with an emphasis on understanding public perception and raising member awareness on the I&D mechanism.

    Current Status: Sustain

  • 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.

    While ICAS has no responsibility for adoption of IFRS in the UK, ICAS engages with the government and regulatory bodies to ensure appropriate mechanisms for adoption / endorsement of IFRS in the UK are in place.

    To support implementation, ICAS encourages its members and all business professionals to enroll in the Chartered Accountants Ireland (CAI) Diploma in IFRS. It is also active in providing its own IFRS training to members, as well as IFRS guidance and literature.

    ICAS ensures that details of new IFRS, IASB Exposure Drafts and Discussion Papers, and changes to standards are made available on the ICAS website, including details of how interested members can comment. ICAS’ Corporate and Financial Reporting Panel responds to IASB Exposure Drafts and Discussion Papers and seeks the views of the wider ICAS membership base where appropriate.

    Current Status: Sustain


IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.


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