BACKGROUND NOTE ON ACTION PLANS Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment Questionnaires. They form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of the accountancy profession around the world. Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and will be subject to periodic review and update. Refer to responses to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self-Assessment Questionnaire for background information on each member and associate their environment and existing processes. These responses may be viewed at: http://www.ifac.org/complianceassessment/published_surveys.php Use of Information Please refer to the Disclaimer published on the Compliance Program website. ACTION PLAN IFAC Member/Associate: Approved by Governing Body: Governance Panel Approved: January 2015 Published: February 2015 Next Update: February 2017 Status as of of Publication Page 1 of 16
GLOSSARY AATs AML FRSSEs GAAPs MiP Association of Accounting Technicians Anti Money Laundering Legislation Financial Reporting Standard for Smaller Entities Generally Accepted Accountancy Principles AAT licensed Member in Practice Status as of of Publication Page 2 of 16
Action Plan Subject: Action Plan Objectives: SMO 1 Quality Assurance Continue using our best endeavors to ensure that those AAT members engaged in providing professional services are licensed and subject to the AAT s quality assurance requirements. Background Accounting technicians qualified by AAT are not eligible to sign off audits of listed companies. They may only become eligible by undertaking further professional accounting qualifications with a body listed by the UK Financial Reporting Council s (FRC) Conduct Committee as a Recognised Qualifying Body or any other professional accountancy body that qualifies and regulates auditors. However, accounting technicians qualified by AAT who offer accountancy, taxation or related consultancy services in the UK, Channel Islands or Isle of Man, as sole traders, in a partnership, as a director of a limited company or principal of any other corporate entity, must be licensed as a Member in Practice and comply with the AAT s quality assurance procedures. AAT is a recognised supervisory authority under the terms of the UK s Money Laundering Regulations 2007. AAT does not supervise firms operating solely in the crown dependencies. If however, they provide services in the United Kingdom, then they will also require supervision under the UK regime. # Start Actions Maintaining Processes 1. Continue to develop AAT s guidelines and regulations for Members in Practice (MiPs) in line with the best practice needs of accounting technicians, the standards and guidance issued by the International Assurance and Auditing Standards Board (IAASB) and the UK s regulatory regime. Current Guidelines and Regulations for Members in Practice are available on the AAT Website. Development AAT Council, Regulation and Compliance Board, staff in the Division. 2. Continue to operate an effective and recognised regulatory scheme for members to comply with UK anti-money laundering legislation (AML). Development/Head of AAT Council, Regulation and Compliance Board, staff in the Division. Status as of of Publication Page 3 of 16
# Start Actions 3. Continue to deliver a programme of AML events and Online resources to educate members about their responsibilities. Development/Head of Staff in the Division 4. Continue to develop the framework of support for those Members in Practice who have just set up their businesses to help them to meet the challenges of starting out in business, and to understand and address the expectations of their clients. This development will present an opportunity to promote the availability of the IFAC Guide to Practice Management for Small- and Medium-Sized Businesses. Development AAT Council, Regulation and Compliance Board, staff in the Division Included introduction of practice management e- learning in 2014. 5. Practice Assurance reviews outsourced to ICAEW, and now consistent requirements in place for AAT members in practice to those required by ICAEW. Head of Conduct & Compliance, Division, ICAEW QAD New Developments 6. 02/2014 Development of revised Licensing Regulations and supporting policy framework (including Practice Assurance Standards) to evolve AAT s licensing and quality assurance activity. 01/04/2015 Development/Head of AAT Council, Regulation and Compliance Board, staff in the Division Status as of of Publication Page 4 of 16
Action Plan Subject: Action Plan Objectives: SMO 2 International Education Standards for Accountants and Other Pronouncements issued by the IAESB (a) Continue using our best endeavors to strengthen our education and certification requirements based on the best practice needs of accounting technicians; (b) Continue to monitor and follow the International Accounting Education Standards Board s developments (c) Address Policy Recommendations in respect of the clarification of practical experience requirements; and (d) Address Policy Recommendations in respect of mandatory CPD requirements. (a) Continue using our best endeavours to strengthen our education and certification requirements based on the best practice needs for accounting technicians Background AAT s qualification and its components are regulated by the UK s qualifications regulators (Ofqual), the Scottish Qualifications Authority (SQA) and Qualifications Wales. They are additionally regulatedby the South African qualification authority (SAQA). The compliance requirements of the UK regulators mean that the AAT is not completely autonomous in respect of the structure, content and certification of its qualifications. AAT is however committed to exceeding the requirements of the regulators. We work closely with other IFAC member bodies in the UK to protect the standards and quality of our certification and the opportunities for further progression for our members. We are currently working on redeveloping the Accounting Qualification at all three levels in order to ensure that it remains current and continues to meet the needs of employers and learners, as well as meeting the new regulatory requirements in the UK. AAT has been proactive in influencing the new standards in order to ensure that the education and certification requirements of accounting technicians are not in any way compromised by the new requirements. # Start Actions Maintaining Processes 1. AAT will continue to improve and develop its education and certification requirements in line with the best practice needs of accounting technicians, the standards and guidelines issued by International Accounting Education Standards Board (IAESB) and the UK s regulatory requirements. Current requirements are on AAT website: Education AAT Council, Learning and Development Board, staff in the Education and Training Division, external advisers, and stakeholders Status as of of Publication Page 5 of 16
# Start Actions 2. For all International Education Standards (IESs), the AAT will continue to review and update periodically its responses to the IFAC Compliance Questionnaire and to notify compliance staff about the updates. Twice yearly 30 June and 31 December CEO and Director of Education CEO and Education New Developments 3. Sept 2013 The AAT Council has approved a qualifications diversification strategy, and as a result AAT has developed a wider range of qualifications across a number of levels which offer a number of different entry and exit points for learners, as well as increased progression opportunities. All qualifications will continue to be compliant with the regulatory requirements outlined above, and will be revised in line with the regulators accreditation requirements. Completed September 2014 Education, Senior Qualifications Manager AAT Council, Learning and Development Board, external subject matter experts and stakeholders, AAT staff. Financial resource has been allocated in the 2014 budget. 4. July 2014 AAT is in the process of re-developing the Accounting Qualification across all three levels, to meet new regulatory requirements being imposed by the UK. The new qualification will be available for first teaching from September 2016. AAT will also continue to ensure compliance with the IAESB standards (in so far as they apply to accounting technicians) and IFAC s Guidelines on The Education, Training and Development of Accounting Technicians. September 2016 Education, Qualification Assurance Policy Manager AAT council, learning and Development Board, staff in the Education and Training division, external advisers, stakeholders and employers. Financial resource allocation approved in 2015 budget. Status as of of Publication Page 6 of 16
(b) Continue to monitor and follow the International Accounting Education Standards Board s Developments Background AAT is in a good position to monitor and follow the IAESB developments: our ex- Global Development, Clare Morley, was technical advisor to a number of Board members for six years and became a full Board Member in 2014. Additionally our Education, Suzie Webb, was Technical Advisor. Following the departure of Clare Morley from AAT, the AAT President, Dr Rachel Banfield, has successfully been appointed as a Board Member commencing in 2015, and Suzie Webb will continue to serve as her Technical Advisor. AAT welcomes the IAESB s project to clarify the IESs and has contributed to a number of exposure drafts. We particularly welcome the focus on outputs and learning outcomes which is central to our qualification. AAT has for many years believed that the most valuable focus of assessment should be on outcomes and not solely on inputs. Whilst inputs can provide a useful benchmark, and are naturally easier to measure, they do not focus on the assessment of competence. Compliance is therefore not a challenge for us as we adopted a learning outcomes approach some considerable time ago # Start Actions Maintaining Processes 5. Respond to IFAC Exposure Drafts and Consultations IES 1 IES 2 IES3 IES 4 IES5 IES7 IES8 IAESB Strategy and Work Plan As required 2011 October 2012 October 2012September 2012 October 2011 March 2011 October 2012 2013 CEO, Education and Development AAT Council, Learning and Development Board, Members Services Board, Regulation and Compliance Board and stakeholder consultation as required Status as of of Publication Page 7 of 16
(c) Address Policy Recommendations in respect of the clarification of practical experience requirements Action Plan Developed by # Start Actions New Developments 6. Continue to provide additional information for the Part 2 compliance questionnaire explaining the rationale of AAT s practical experience requirements. The explanation will examine and define more clearly the meaning of terms such as pre-qualification training as they relate to AAT. The information will also address the effectiveness of AAT s approach. CEO and Director of Development Education Review of AAT s Compliance Information 7. Periodic review of AAT s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO 2 as necessary. Once updated inform IFAC Compliance staff about the updates in order for the Compliance staff to republish updated information. Executive Executive Status as of of Publication Page 8 of 16
Action Plan Subject: Action Plan Objectives: SMO 3 International Standards and other Pronouncements Issued by the IAASB Continue to use our best endeavors to comply with SMO3 in line with AAT s capacity and competence Background Accounting technicians qualified by AAT who offer accountancy, taxation or related consultancy services in the UK, Channel Islands or Isle of Man, as sole traders, in a partnership, as a director of a limited company or principal of any other corporate entity, must be licensed as a Member in Practice and comply with AAT s quality assurance procedures. However, accounting technicians qualified by AAT are not eligible to sign off audits of listed companies. They may only become eligible by undertaking further professional accounting qualifications with a body listed by the UK FRC s Conduct Committee as a Recognised Qualifying Body or outside the UK by any other professional accountancy body that qualifies and regulates auditors. Where AAT members have any involvement in audit work, it is under the supervision of professionally qualified accountants and registered auditors. Licensed members in practice may prepare and submit the accounts of limited companies that are defined as small under the Companies Acts. AAT Members in practice may also be licensed to undertake limited assurance engagements for companies which fall below the UK s audit threshold. Since AAT is not a Recognised Qualifying Body for auditors, it is not included in the UK s structures for establishing auditing standards for audits of listed and non-listed companies. This means that its capacity and competence to influence the matters included in SMO3 is limited. # Start Actions Maintaining Processes 1. Continually monitor IAASB pronouncements and disseminate to AAT members any matters of relevance to them via the channels available. Development Development Review of AAT s Compliance Information 2. Periodic review of AAT s response to the IFAC Compliance self-assessment questionnaires and update sections relevant to SMO 3 as necessary. Once updated inform IFAC Compliance staff about the updates in order for the Compliance staff to republish the updated information Executive Executive Status as of of Publication Page 9 of 16
Action Plan Subject: Action Plan Objectives: SMO 4 IESBA Code of Ethics for Accountants (a) Continue to monitor and follow the International Ethics Standards Board s developments (b) Confirm the current IESBA Code is adopted by AAT; (c) Indicate if there are differences between AAT s ethical requirements and the current IESBA Code; (d) Ensure that AAT members and other key stakeholders are aware of the requirements of the Code; (e) Advise education providers about the new requirements and request they include them in the education programme; and (f) Review the Ethics Education Toolkit. (a) Continue to monitor and follow the International Ethics Standards Board s Developments Background AAT follows the Board s developments as reported on the IFAC website and responds to consultations as appropriate. AAT has been represented at the Board s Forums. AAT has a range of resources for members to assist them in understanding their ethical obligations and meeting them. AAT is recognised under the UK s Money Laundering Regulations 2007 as a supervisory authority to monitor members in practice compliance with the UK s anti money laundering legislation. AAT also provides a telephone helpline on ethical matters available to any member with a specific ethical concern. AAT s Accounting Qualification includes a compulsory Ethics learning area which is assessed as will the revised qualification in development. Given that a very small number of AAT members in practice (approximately 55) offer Limited Assurance Engagement as part of their licensed activities, sections 290and 291 of the IESBA Code of Ethics have been pulled out into a different document in order to deliver more user friendly and targeted support. # Start Actions Maintaining Processes 1. Continue to develop and promote events and on-line resources to enable AAT members to understand and meet their ethical obligations. Continue to support members in practice to meet the ethical requirements of the UK s anti money laundering legislation CEO, Development, Head of Conduct & Compliance President, Council, Regulation and Compliance Board, Accounting Technician magazine and AAT website. Status as of of Publication Page 10 of 16
# Start Actions (b) Confirm whether the current IESBA Code is adopted by AAT; 2. Oct 2011 The IESBA Code has been embedded in AAT Code of Ethics which was revised in 2013 and approved by AAT Council for implementation from 1 January 2014. The Code applies to all members including student members. For more information please refer to online version of the AAT Code of Ethics Completed CEO and Development, Head of Conduct & Compliance Regulation and Compliance Board, Council (c) Indicate if there are differences between AAT s ethical requirements and the current IESBA Code 3. Oct 2010 Undertake a review of the differences between AAT s Code of Ethics and the current IESBA Code. This confirms there are no differences in the fundamental principles and the conceptual framework approach in IFAC s Code and AAT s Guidelines. Adaptations are minimal and are confined to modifying terminology to make it appropriate for application to accounting technicians (eg substituting terms like member or accounting technician for professional accountant ) and using examples that reflect the nature of the activities carried out by AAT members. Completed CEO and Development Conduct and Compliance Team 4. January 2014 Sections 280 and 290 of the Code of Ethics for Accountants have been modified insofar as AAT members in practice do not undertake audit work, and very few undertake assurance work. This requires further review. Head of Conduct & Compliance Conduct and Compliance Team (d) Ensure that its members and other key stakeholders are aware of the requirements of the Code 5. Continue to develop and implement a comprehensive communications effort to make members aware of the Code of Ethics and its implications using Accounting Technician magazine; illustrative interactive case studies on AAT s AAT Ethics website; a series of seminars on professional ethics delivered through AAT s regional Branch network. CEO, Development, Head of Conduct & Compliance Regulation and Compliance Board, AAT website, Accounting Technician magazine; Branch network. Status as of of Publication Page 11 of 16
# Start Actions 6. November 2010 Develop and update online training resources for members on ethical requirements and compliance. Please refer to AAT website for more details. Completed Action Plan Developed by Development, Head of Conduct & Compliance Conduct and Compliance Team, Web Team. (e) Advise education providers about the new requirements and request they include them in the education programme 7. Sept 2013 Ensure that all training providers are aware of the ethics education requirements of the revised Accounting Qualification launched in Sept 2013. Completed Education Staff in the Education and Training Division, Centre Support team (f) Review the Ethics Education Toolkit 8. June 2009 Develop and update further the ethics education materials for members ensuring that the learning outcomes are aligned to the IFAC Ethics Education Toolkit. Completed Development. Staff in the Development, Division. Members Services Board, Education, Head of Learning and Conduct and Development Board Compliance New Developments 9. Jan 2012 Develop and implement a new ethics web based micro-site providing access to a wide array of ethics support and services, and promote availability of online ethics e-learning modules: http://www.aat-ethics.org.uk/ Completed Development, Head of Conduct & Compliance Team, Web Team Review of AAT s Compliance Information 10. Periodic review of AAT s response to the IFAC Compliance Self- Assessment questionnaires and update sections relevant to SMO 4 as necessary. Once updated inform IFAC Compliance staff about the updates in order for the Compliance staff to republish updated information Executive Executive Status as of of Publication Page 12 of 16
Action Plan Subject: Action Plan Objectives: SMO 5 International Public Sector Accounting Standards and Other Pronouncements Issued by the IPSASB Continue to use our best endeavors to comply in line with the AAT s capacity and competence Continue to use our best endeavors to comply with SMO 5 in line with AAT s capacity and competence Background As a membership body for accounting technicians, AAT does not participate in the UK s standard setting structures for public sector accounting and therefore its ability to influence the UK s adoption of International Public Sector Accounting Standards (IPSAs) is limited. AAT members working in the public sector would not be undertaking responsibilities at the level covered by the standards without undertaking further senior professional qualifications. # Start Actions Maintaining ongoing processes 1. Continually monitor IPSASB pronouncements and disseminate to AAT members any matters of relevance to them via AAT s communication channels. CEO, Development Staff in the Division Status as of of Publication Page 13 of 16
Action Plan Subject: Action Plan Objectives: SMO 6 Investigation and Discipline (a) To provide in AAT s constitution and rules for the investigation and discipline of misconduct, including breaches of professional standa rds by individual members (and, if local laws and practices permit,by firms); and (b) To continue to operate AAT s disciplinary scheme in accordance with IFAC SMO 6. (a) To provide in AAT s constitution and rules for the investigation and discipline of misconduct including breaches of professional standards by individual members (and if local laws and practices permit, by firms) Background AAT carries out an investigation and discipline function which is both information based and sanctions based. It is backed up by a range of sanctions the most serious of which are exclusion from membership and loss of professional designation. AAT is recognised under the UK s Money Laundering Regulations 2007 as a supervisory authority to monitor members in practice compliance with the UK s anti money laundering legislation. This role involves strict disclosure requirements to the relevant authorities. # Start Actions Maintaining Processes 1. Keep under review AAT s Disciplinary Regulations to ensure that they remain fit for purpose. AAT s Disciplinary Regulations were last reviewed in October 2014 against the requirements of the SMO 6 revised in November 2012. These revised regulations will be implemented over the course of 2015. Development, Head of Regulation and Compliance Board, Head of Conduct & Compliance, Conduct and Compliance Team (b) To continue to operate AAT s disciplinary scheme in accordance with IFAC SMO 6 Maintaining Processes 2. Continue to operate AAT s investigation and disciplinary process in a timely and effective manner. This process is reviewed through reports presented to AAT s Regulation and Compliance Board and Council at their respective meetings throughout the year. Development, Head of Conduct &Compliance Regulation and Compliance Board, Head of, Conduct and Compliance Team, Investigations and Disciplinary Committees Status as of of Publication Page 14 of 16
# Start Actions 3. Continue to liaise with relevant public authorities where members are possibly involved in serious crimes and disclose information as required. Development, Head of Regulation and Compliance Board, Head of Conduct and Compliance, Conduct and Compliance Team 4. Continue to monitor cases to identify trends and risks in order to develop processes to improve members conduct and compliance. Head of Conduct & Compliance Regulation and Compliance Board, Head of New Developments 5. Implement the revised AAT Disciplinary Regulations. Development, Head of Council, Regulation and Compliance Board, Conduct and Compliance Team 6. Revise the policy framework that supports the new AAT Disciplinary Regulations. Development, Head of Council, Regulation and Compliance Board, Conduct and Compliance Team Status as of of Publication Page 15 of 16
Action Plan Subject: Action Plan Objectives: SMO 7 International Financial Reporting Standards and Other Pronouncements issued by the IASB AAT to continue to use our best endeavours to promote IFRSs in so far as they impact on accounting technicians. Background As a membership body for accounting technicians, AAT is not formally part of the UK s structures for the development of national accounting standards. Its ability to influence the incorporation of International Financial Reporting standards into national accounting requirements is therefore limited. AAT does however comment on UK FRC s Accounting Council consultations and International Accounting Standards Board (IASB) consultations where these are relevant to accounting technicians. AAT has supported the replacement of the UK s Financial Reporting Standard for Smaller Entities (FRSSE) by the IFRS for Small and medium entities (SMEs). AAT promotes the implementation of IFRSs. # Start Actions Maintaining Processes 1. 2. 3. Continue to respond to IASB consultations in particular where these impact on accounting technicians. Continue to disseminate information to members about IFRSs through AAT s magazine, newsletters and website. Continue to respond to FRC consultations in particular those impacting on accounting technicians: Development. Technical Manager Development. Technical Manager Development. Development. Technical Manager. Expert practitioners Development. Technical Manager. Expert practitioners. Marketing Division. Development. Technical Manager. Expert practitioners. Review of AAT s Compliance Information 4. Periodic review of AAT s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO7 as necessary. Once updated inform IFAC Compliance staff about the updates in order for the Compliance staff to republish updated information. Executive Executive Status as of of Publication Page 16 of 16