Transcript International Ethics Standards Board for Accountants Definition of Professional Accountant Bob Rutherford Paris June 2010

International Ethics Standards Board for
Accountants
Definition of Professional Accountant
Bob Rutherford
Paris June 2010
Definition Professional Accountant
Project Status
• IFAC Task Force formed, one conference
call held to date
• Aim to have revised definition for
consideration in second half of 2010
IFAC Task Force Composition
• Public Interest Activity Committees –
IAASB, IESBA, IAESB
• Compliance Advisory Panel
• Small and Medium Practices Committee
• Developing Nations Committee
• Professional Accountants in Business
Committee
Existing Definition
“An individual who is a member of an IFAC member
body”
• Use of definition:
– IESBA – defined term, which is further sub-divided into
“professional accountant in public practice” (Part B) and
“professional accountant in business” (Part C)
– IAASB Glossary
– IAESB - Framework
Concerns with Existing Definition
• Does not convey understanding of roles and
functions of a professional accountant
• Professional accountants are not necessarily
members of IFAC member bodies
– Does not recognize that professional standards
are adopted and enforced at the national/regional
level
– Definition could be seen as limiting applicability
of international standards (including the Code)
• Definition is circular and confusing
Questions Considered by TF
• Whether definition should be broadly
defined or should be limited to members of
IFAC member bodies
• Whether two separate definition should be
developed for professional accountant and
accounting technician
• What elements should be included in a
revised definition of professional accountant
IESBA Issues
• Majority of requirements directed to
professional accountant – if any change to
definition IESBA will need to consider
implications
– Expansion of definition – IESBA will need to
determine whether appropriate for all
requirements. Exposure of Code needed
– No expansion but use of different term – may not
require exposure
Elements of Definition
• Expertise in accounting, auditing, finance or
tax which will normally include one or both
of:
– Measurement, recognition, preparation,
validation, summarization, analysis, and
disclosure of financial and, where applicable,
nonfinancial information; or
– Auditing of and provision of assurance and
advisory services on financial information and,
where applicable, nonfinancial information
Elements of Definition
• Engaged in an occupation:
– Held to a high ethical standard
• Acts with integrity and in the public interest
• Agrees to rules of conduct and possesses requisite skills,
training, and experience to make the judgments necessary in
applying those rules of conduct
• Subject to enforcement by membership in a professional
organization or through another regulatory mechanism
recognized within its jurisdiction as upholding defined high
standards of performance
Elements of Definition
• Engaged in an occupation (cont’d):
– Requiring specialized knowledge in a widelyrecognized body of learning
• Obtained through formal education programs and practical
experience requirements
• Demonstrated level of competence by assessment
• Uses professional judgment based on principles and operates
with a degree of autonomy
• Kept current through continuing education/continuing
professional development
Elements of Definition
• A professional accountant may also hold a
certification or license, or may have some
widely recognized authorization or
qualification to deliver specified accountancy
services
Any other comments?