[Fulltext] The table below was used in presentations given by Terence O'Rourke, Vice-President of the Institute, to members in business and practising members last month (see Boardroom Soundings on page 8-9 of this issue).
The table gives a clear indication of how much things have changed, and will continue to change, in the accountancy profession, not just in Ireland but, throughout the developed world.
The effect of these changes on the work of most Chartered Accountants will be profound. For auditors, the whistle-blowing requirements are bound to place great strain on client relationships, but what may not be quite so obvious is that they also put in place a framework which will encourage second-guessing in hindsight. The experience of the D.I.R.T. Inquiry showed that there is still a huge level of ignorance about the level of assurance which a true and fair audit report is designed to give. The same could apply to the Directors Compliance Report required by the Companies (Auditing & Accounting) Bill (IAASA Bill). It is a challenge for the profession to either educate people on the true meaning of such a report, or to design audits so that the level of assurance is increased in line with expectations. The cost benefit of the latter option is bound to be questionable.
Non-Executive Directors
The proposals in the Smith and Higgs Reports in the UK will lead to amendments to the Combined Code, which is adhered to by plcs listed on the Irish Stock Exchange. Both reports, as well as the IAASA Bill in the Republic of Ireland emphasise a need for more non-executive directors on plcs with an enhanced role. This will require a widening of the pool of talent from which non-executive directors are drawn. Despite reservations which a number of people have about becoming a non-executive director in the current climate, there must be a real opportunity for Chartered Accountants to fulfil that role, as their skill set of broad business knowledge, delivered with integrity, is precisely what is required. The Institute will facilitate the establishment of the wider pool required.
Education and Training
A syllabus review is currently being undertaken by a group consisting of training managers, academics, lecturers and examiners. The purpose of the review is two-fold. Firstly, it will reflect the results of the research carried out last year, amongst newly qualified members and their employers, to establish the market needs of a newly qualified Chartered Accountant. Secondly, it will move technical content from the Final Admitting Examination into earlier examinations, in order to make the final exam a pure test of competence.
We had a very interesting meeting with Centre of Accounting Studies lecturers at the end of February 2003, at which the Institute's proposals for education over the next two/three years were outlined. These included a proposal that all examinations, with the exception of the FAE, would be taken within full-time education. The views of the lecturers were very helpful and, given their position at the forefront of student education, had great credibility.
We will be developing this project over the coming months, and members, training firms, students and educators will be kept advised.
Major Reports / Legislation
Ireland
Criminal Justice (Theft&Fraud) Offences Act
Company Law Enforcement Act
Central Bank & Financial Services Authority of Ireland (No 2) Bill (heads)
Companies (Auditing & Accounting( Bill
Money Laundering - legislation due soon
United Kingdom
Higgs report
Smith report
Swift report (regulation)
CGAA Report
United States
Sarbanes - Oxley
Europe
Winter Report
EU Recommendation on Stautory Auditor Independence
EU Company Law Strategy (due May)
Accountancy Ireland, Vol 35 No 2, April 2003