The Accounting Professsion

Question 1

Profession definition

Answer 1

Occupational area involving prolonged training leading to formal qualification

Question 2

Profession characterised by what factors

Answer 2

1. Mastering of specialised skills
2. Governance by professional association
3. Compliance with an ethical code
4. Process of certification before being allowed to practise

Question 3

Profession common attributes

Answer 3

1. Formal regulatory process
2. Great degree of autonomy
3. Professional values
4. Self-regulation
5. Co-regulation

Question 4

What is the accountancy profession concerned with

Answer 4

The measurement, disclosure, or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocations decisions

Question 5

Accountancy profession helpful to maintain

Answer 5

1. Working of capital markets
2. Upholding of public interest (via confidence)

Question 6

Two main accountancy roles

Answer 6

1. Public practice
2. Business (public or private sector)

Question 7

Public practice

Answer 7

Firm of accountants providing services

Question 8

Two types of public practice areas

Answer 8

1. Reserved areas
2. Other accountancy areas

Question 9

Reserved areas examples

Answer 9

Insolvency
Investment business
Audit
Probate

Question 10

Other accountancy areas examples

Answer 10

Accounting
Taxation
Corporate finance
ICT
Management consultancy
Forensic accounting
Financial management

Question 11

Business accountancy roles examples

Answer 11

1. Transaction recording
2. Management accounting
3. Financial reporting
4. Treasury management
5. Administration
6. Pensions

Question 12

Are business accountants still expected to uphold professional principles?

Answer 12

Yes

Esp professional competence and due care

Question 13

Three basic aspects of professional accountant’s work

Answer 13

1. Maintaining control and safeguarding assets
2. Financial management
3. Financial reporting

Question 14

Maintaining controls and safeguarding assets

Answer 14

Through complete, timely and accurate recording of transactions

Question 15

Financial reporting must be reported to…

Answer 15

External stakeholders

Question 16

Underlying principals for high quality financial reporting

Answer 16

1. Professional ethics
2. Accounting principals

Question 17

UK accounting professional body

Answer 17

Consultative committee of accountancy bodies (CCAB)
(5 joined together in 1974)

Question 18

CCAB member of what international body?

Answer 18

International federation of accountants (IFAC)

Question 19

What CCAB provides

Answer 19

Discussion forum

Representative of profession (e.g. to gov)

Question 20

Who can call themselves an accountant?

Answer 20

Anyone

Except for protected areas

Question 21

CIPFA

Answer 21

Chartered institute of public finance and accountancy

Question 22

Why is regulation of professions needed?

Answer 22

Public interest protection
(Too complex for public to reasonably understand)

Question 23

Methods of regulation

Answer 23

1. Direct gov (legislation)
2. Separate gov agency (delegated legislation)
3. Self-regulation

Question 24

Role of the gov in regulating the accountancy profession

Answer 24

Overall responsibility for effectiveness of regulatory framework

But delegates certain statutory powers to the financial reporting council (FRC)

Question 25

Is accountancy self-regulated?

Answer 25

Yes ICAEW responsible for supervising all members to maintain professional l standards and reputation of profession ICAEW (via CCAB) is also a ‘recognised professional regulator’ over reserved areas

Question 26

People likely to be involved in an effective oversight mechanism

Answer 26

Government Regulators Profession members Public members

Question 27

The 2 FRC committees

Answer 27

1. Conduct committee 2. Codes and standards committee

Question 28

Conduct committee responsibilities

Answer 28

1. Professional oversight 2. Professional discipline 3. Corporate reporting review 4. Audit quality review

Question 29

Codes and standards committee responsibilities

Answer 29

1. Actuarial policy 2. Accounting and reporting policy 3. Audit and assurance 4. Corporate governance

Question 30

FRC professional oversight team has what 3 main roles

Answer 30

1. Non-statutory 2. Statutory regulation 3. Independent monitoring

Question 31

FRC professional oversight team role: non-statutory

Answer 31

Overseeing accountancy bodies regulation of members regarding anything not related to statutory audits

Question 32

FRC professional oversight team role: Statutory regulation

Answer 32

Regulation of accountancy bodies regarding registering, monitoring and disciplining just statutory auditors

Question 33

FRC Professional oversight team: independent monitoring role

Answer 33

Reviewing quality of auditing function for major public interest entities (e.g. listed companies)

Question 34

Who is FRC independent monitoring done by?

Answer 34

The audit quality review team

Question 35

Ethics

Answer 35

Behaviours acceptable in a society that tell us how we should behave

Question 36

Ethical behaviour

Answer 36

Acting in a manner that is acceptable

Question 37

What is crucial to accounting professional ethics?

Answer 37

Public trust

Question 38

Professional ethics involves…

Answer 38

1. Identifying ethical issues 2. Understanding them 3. Behaving in line with a code of behaviour accepted by other precessional

Question 39

3 ethical expectations of the profession

Answer 39

1. Uphold ICAEW code of ethics 2. Identify likely threats to their principles 3. Safeguard against those threats

Question 40

How ICAEW regulates own members

Answer 40

Entry/education requirements Additional requirements for reserved areas Professional indemnity insurance (PII) required for public practice Rigorous complaints investigation procedures ICAEW overseen by FRC

Question 41

How is technical competence ensured

Answer 41

Admission requirements e.g. exams Ongoing membership requirements (CPD) for public practice members Regulatory powers over reserved areas (eligibility, conduct, competence)