The main objective of the workshop was to agree approaches for each of the CoP’s three workgroups (on public oversight systems, quality assurance and sanctions and discipline) by looking at how these three issues had been dealt with in practice, particularly in small countries.
Twenty-nine participants from the REPARIS countries attended the workshop in person, with 24 listening in via Adobe Connect to one or more of the sessions. Ranjan Ganguli and Andrei Busuioic, both from the CFRR, opened the workshop by outlining the standard models for public oversight, quality assurance and sanctions and discipline.
Sanctions and discipline
There were three presentations on sanctions and discipline, illustrating how these issues were dealt with in the UK. Anna Colban, from the Accounting and Actuarial Discipline Board (AADB, part of the UK’s Financial Reporting Council), outlined how the AADB operated. She stressed that the AADB was financed by the FRC and was independent of the professional accountancy bodies. Primary responsibility for disciplining members rests with the accountancy bodies with the AADB only dealing with cases of public interest. The AADB investigates such cases and, where it finds a case to answer, will then put them to a tribunal. This makes its judgement on a “balance of probabilities” rather than the stricter rules found in criminal cases. Tribunals can issue reprimands, impose unlimited fines or bar individuals from practising.
Ben Johnson from FTI Consulting then described how he and his colleagues carried out investigative work in accountancy disciplinary cases. Such work was usually commissioned by regulatory bodies (such as the AADB) or by creditors and tended to involve public interest cases with a high press profile and often involving allegations of losses of significant amounts of money through accounting irregularities. Mr Johnson outlined the structure of a typical investigation and the particular skills needed by a successful investigator. As well as specialist accounting knowledge, these included the ability to obtain evidence from subjects who might have an interest in being unco-operative.
Finally, Paul Simkins from the Institute of Chartered Accountants of England and Wales (ICAEW), one of the UK’s professional accountancy bodies, described the ICAEW’s approach to discipline and sanctions and how this fitted in with the work of the AADB and oversight bodies like the Audit Inspection Unit (AIU). Mr Simkins set out how the ICAEW carried out investigations and how decisions were made by a separate Disciplinary Committee, with a final right of appeal to a distinct Appeals Committee. These committees were generally composed of accountants, with a minority of lay members.
The CoP workgroup on sanctions and discipline then used the results of these presentations to set out a framework (“charter”) for the workgroup’s future work.
Quality Assurance System
Participants benefitted from a series of presentations on the differing approaches to implementing a quality assurance system (QAS) in a range of institutional environments. Harryam Parmesar, the President of the Institute of Chartered Accountants of the Caribbean (ICAC) presented via web link from his Trinidad and Tobago. He described how seven separate institutes had come together in the ICAC and had implemented a regional Practice Monitoring System as their QAS. Some elements of quality assurance reviews were outsourced to the UK’s Association of Chartered Certified Accountants (ACCA). This was complements by presentations from Rimas Butkevicius from the Lithuanian Chamber of Auditors, Lulzim Zeka from the Society of Certified Auditors and Accountants of Kosovo (SCAAK) and Mariana Mutu from the Auditing Supervision Council in Moldova describing how QAS had been implemented in Lithuania, Kosovo and Moldova. Mr Simkins from the ICAEW gave the final “national” presentation on this topic, describing how the UK QAS worked, especially its combination of written annual returns and infrequent (about every six years) of inspection visits, and its relationship to EU directives and the obligations imposed by the International Federation of Accountants (IFAC).
Andrei Busuioc made the concluding presentation on QAS, drawing on the lessons learned from presentations on QAS at previous AOCoP workshops to suggest common elements of a methodology for implementing a QAS. The QAS workgroup used these suggestions and the insights gained from the presentations made at this workshop to construct a charter for the future work of the QAS work team.
Public Oversight Bodies
Discussion of public oversight bodies (POBs) started with a presentation from Jon Hooper of the UK’s Financial Reporting Council (FRC) outlining the role of the International Forum of Independent Audit Regulators (IFIAR) and discussing IFIAR’s draft set of core principles for the operation of a POB. These principles are due to be agreed at next IFIAR plenary meeting in April 2011 and cover the structure of a POB, its operations and its inspections. The principles would not be binding on members but were intended to demonstrate best practice. This was followed by a presentation from John Grewe of the UK’s Public Oversight Board giving an overview of the UK’s approach to audit regulation and how it related to the requirements of the Statutory Audit Directive and describing how the public oversight system works in practice in the UK.
Ranjan Ganguli from the CFRR then drew on presentations on other POBs which had been made at earlier AOCoP workshops to suggest some common content for a POB. The POB workgroup used these suggestions and the insights gained from the latest presentations to draw up a charter for the future work of the POB work team.
Preparing the AOCoP’s future program
The workshop’s final sessions were largely devoted to drawing up plans for future work for the three work teams, and allocating team responsibilities, taking care to ensure that the teams worked well together and could resolve any overlapping issues. The teams initially worked on their own to draw up these plans but then presented their proposals to the community as a whole and modified them in response to the comments and suggestions that they received.
The workshop also agreed to commission learning events of POS and Auditing.
The workshop achieved its main objective of familiarizing CoP members with the key features of AO systems in important comparator countries and using these to draw up workplans for the CoP’s three workgroups.
The workshop was also successful in demonstrating that Adobe Connect could allow both remote presenters and remote participants to take part in many of the workshop’s activities without being physically present. There were some teething problems and the lessons learned in dealing with these will be useful in planning future AOCoP events and other workshops organized by the CFRR.