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August 14, 2008

ACCA teams up with Caribbean institutes on monitoring

Three Caribbean professional bodies have partnered with the Association of Chartered Certified Accountants (ACCA) to implement audit practice monitoring programmes in Barbados, Guyana, and Trinidad and Tobago.

The programme is a regional initiative of the Institute of Chartered Accountants of the Caribbean (ICAC), an umbrella body for the Caribbean institutes. ICAC president Angela Lee Loy said it is intended to improve the standards within the regional accountancy profession, raise the international profile of the local profession and fulfil the International Federation of Accountants’ (IFAC) requirements for members to maintain efficient quality assurance review systems.

Joint stakeholders

The monitoring will be carried out by the ACCA and the findings will be reported to the three regional institutes, who will retain full regulatory responsibility for practitioners and firms. Both the ACCA and the local institutes are stakeholders in the Caribbean profession as many practitioners are qualified with both designations.

ACCA head of practice monitoring Sha Ali Khan said that five years ago the ACCA council decided the association’s members should be subject to robust regulation no matter where they are located. “Although we have always had a professional conduct department to investigate complaints and take disciplinary action, one of the things that we don’t have is all our members subject to audit monitoring or quality assurance,” he said.

“In the UK, since the Companies Act in 1989, ACCA members like any other registered auditors, are subject to frequent inspections and ACCA’s council decided that members in public practice outside the UK should also be subject to some sort of inspection system.”

Khan said the ACCA’s strategy for monitoring members in jurisdictions that don’t have monitoring by regulators is to collaborate with the local professional body wherever possible. The Institute of Certified Public Accountants of Cyprus was the first such partnership and the ACCA also has contracts with professional bodies in Botswana, Malawi, Kenya and Zambia.

In the Caribbean, the institutes of Trinidad and Tobago, Barbados and Guyana, along with Jamaica, were initially approached regarding the monitoring as they are the largest in the region. The Jamaican institute is yet to finalise its contract as it had another level of regulation to contend with.

“Unlike the other Caribbean islands, Jamaica has what is known as the Public Accountancy Board, which is really an arm of the government,” Loy explained. “So the institute has to work alongside the public accountancy board and they of course had their own concerns. So [the Jamaican institute] had to deal with that at a more localised position.”

Loy said the Jamaican institute has received formal approval from the government and is expected to finalise its contract with the ACCA imminently. Khan said there are a couple of other smaller Caribbean institutes that the ACCA is talking to as well.

The ACCA will, partly due to its duty to its members, absorb two-thirds of the monitoring costs, Loy said. The ICAC president’s local institute in Trinidad and Tobago has already charged its members the remaining third. “I personally think it’s a reasonable fee, it’s an amount of £172 ($321) per person,” Loy said.

The first monitoring visits are expected to occur in October this year. The monitoring will run on the cycles recommended under IFAC’s Statement of Membership Obligations 1, which is every six years for non-public interest entities and every three years for public interest entities.

Added benefits

Loy said the monitoring will be useful for members in terms of getting them better positioned to “deal with the complexities of the world”. “What I think will be very fulfilling for many of the people is how much they can learn through this process. It is not only about being a bad guy, but it is about educating them on how they could do things better. The ACCA was very frank about that, they said ‘we are not here to throw you off the wall, this is new for some people, it is going to be a learning curve’,” she said.

At this stage only audit firms in the Caribbean will be monitored, however in the UK the ACCA has a programme where it examines members’ firms to ensure they are applying best practice and complying with rules and regulations where it doesn’t involve audits.

This scheme has been extended to Cyprus and could at some stage be extended to other jurisdictions, including the Caribbean. Carolyn Canham

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