Regional Practice Monitoring Programme:
The vision of establishing an effective practice monitoring system to enhance the capacity of the regional accountancy profession has been a major priority for the ICAC.
an important component of the self-regulatory functions of the regional accountancy profession
The regional practice monitoring programme is aimed at improving standards and ensuring the existence of efficient quality assurance review systems within the regional accountancy profession.
Practice monitoring is an important component of the self-regulatory functions of the regional accountancy profession and is one of the mandatory obligations of membership with the International Federation of Accountants (IFAC). The regional monitoring programme will, therefore, ensure that ICAC member Institutes fulfill IFAC’s requirements for its members worldwide to maintain an efficient quality assurance review system.
The development of the regional practice monitoring programme was undertaken with assistance from the monitoring unit of ACCA (Association of Chartered Certified Accountants). ACCA has also been contracted to undertake the monitoring visits within ICAC member territories and to report their findings to the regional Institutes, who will retain full regulatory responsibility for practitioners and firms during the monitoring process.
Implementation of the regional monitoring programme has commenced in Barbados, Guyana and Trinidad and Tobago following the signing of practice monitoring contracts in June 2008 by the Presidents of the Institutes of Chartered Accountants of Barbados, Guyana and Trinidad and Tobago. Under the regional initiative, practitioners and firms within these three territories will be monitored to ensure that audit reports and audit procedures are in compliance with International Standards on Auditing and other internationally accepted rules.
What is Practice Monitoring?:
Practice Monitoring is a type of enforcement mechanism which encompasses the review of audit reports and related working files for compliance with International Standards on Auditing, thereby, ensuring the quality of audits.
IFAC requires its members worldwide to maintain efficient and effective quality assurance review programs. This is central to the practice monitoring process which involves visiting firms and verifying that they have complied with internationally acceptable rules and standards. Monitoring, however, achieves little unless it is undertaken in conjunction with a sound regulatory framework to ensure that firms take the necessary action to rectify deficiencies identified during the monitoring process. In this regard, ICAC member bodies have been required to establish suitable regulatory framework which is compliant with IFAC’s Statements of Membership Obligations.
The monitoring process provides guidance to firms/practitioners regarding deficiencies within their practice and focuses on the remedial process in order to effect improvements. Where breaches of rules or non-compliance with standards are not considered to be very serious, the monitoring team provides advice and guidance to firms as to how the deficiencies can be rectified. Where breaches of rules or non-compliance with standards are serious and/or repeated, regulatory action will need to be taken by regional Institutes.
Monitoring Visit – How Does It Work?:
- The proposed period for the monitoring programme is a six-year cycle that includes follow-up visits by the monitoring team.
- The primary purpose of the monitoring visits is to assess the extent to which a firm is complying with International Standards on Auditing (ISA) and International Standards on Quality Control No. #1 – Quality Assurance (ISQC1). The visits will include a review of the firm’s quality control policies and procedures and an examination of a number of completed audits.
- Each regional Institute would be expected to identify and notify ACCA as to which firms have been selected for monitoring visits. The firms selected would be assessed at an initial review meeting to be followed by a review of their audit assignments.
- The practice reviewer will contact the practitioner or firm to arrange dates for the monitoring visits. The duration of the monitoring visits will depend on the number of offices, partners and clients of the firm.
- A comprehensive report will be prepared by the ACCA team at the end of the monitoring visits. The main purpose of the report is to identify weaknesses, provide recommendations for improvement and referencing the appropriate IASB standards in order to assist the firm in effecting improvements, where necessary.
Why was ACCA selected to carry out Monitoring Visits?
ACCA has been contracted to provide monitoring services under the regional practice monitoring programme on the basis that it has:
- A proven track record as a statutory regulator in the United Kingdom and Ireland
- Its own independent monitoring unit and has expertise (over 15 years experience) in the monitoring of its members worldwide. ACCA undertakes over 600 monitoring visits each year
- Provided monitoring services to other regulators or accountancy bodies, for example, Law Society, Dubai FSA, Institute of Certified Public Accountants of Cyprus, Botswana Institute of Accountants and the Audit Commission in England
- An established relationship with ICAC (ACCA is an affiliate member of ICAC and has collaborated on various initiatives over the years )
- An established partnership with some ICAC member Institutes, for example, its Joint Examination Scheme with ICAJ and ICATT
Under the regional practice monitoring programme, ACCA will only be undertaking monitoring visits. Each regional Institute will maintain full regulatory responsibility for firms and practitioners within their respective territory. ACCA will, therefore, report the results of its monitoring visits along with recommendations to each regional Institute. The Institute is expected to undertake follow-up with the firm to ensure that corrective action is taken, where necessary.
The ICAC, through its Technical Committee, will provide any additional information or clarification on the regional practice monitoring programme which is intended to improve standards within the regional accountancy profession and ensure that the highest levels of quality are provided in the interest of the public.
For further information, contact:
6 Lockett Ave, Kingston 4
Tel: (876) 922-3223; Fax: (876) 948-6610