IAASA – Issues Impacting on Practitioners Ian Drennan Chief Executive (Designate)

1. IAASA – Issues Impactingon PractitionersIan DrennanChief Executive (Designate)

2. Context – Statutory Remit • To supervise how the prescribed accountancy bodies regulate and monitor their members; • To promote adherence to high professional standards in the auditing & accountancy profession; • To monitor whether the accounts of certain classes of companies and other undertakings comply with the Companies Acts; and • To act as a specialist source of advice to the Minister on auditing and accounting matters.

3. Context - Work Programme • Act requires the preparation, and submission to the Minister, of a Work Programme and related Programme of Expenditure. • Development of the initial Work Programme involved detailed consultation and engagement with the accountancy bodies. • Ministerial approval currently awaited, at which time the recruitment process will commence.

4. Programme of Expenditure • The Act provides that: • the exchequer will provide 40% of the Authority’s funding; and • the remaining 60% will be provided by the profession (by way of a levy on the prescribed bodies). • Excluding capital and other expenditure of a once off nature, the 2005 budget, which assumes the appointment of staff in May/June, likely to be of the order of €1.5m

5. Objectives • Through effective, independent oversight, inter alia, to: • enhance public confidence in the accountancy bodies’ regulatory & monitoring processes; • enhance public confidence in the financial reporting of those entities coming within the Authority’s remit; • promote, and contribute to the protection of, the public interest; • ensure that the prescribed accountancy bodies’ practices, procedures and standards conform to a common high standard reflective of international best practice.

6. Key Values & Assumptions The key values and assumptions underpinning the Authority’s activities will include, inter alia: Responsibility, in the first instance, for the regulation (including complaints handling, investigation and disciplinary activities) and, where applicable, monitoring of members will continue to reside with the prescribed bodies; Complaints against members received by the Authority will, in the first instance, be referred to the relevant prescribed body; The Authority’s processes and procedures will be open, transparent, publicly available and widely communicated;

7. Key Values & Assumptions The Authority’s remit to ‘monitor’ financial statements, together with other relevant considerations, is such that a purely reactive approach will not suffice in the medium/long term; The primary focus of the f/s review function will be on material departures from statute/standards; In determining the nature and extent of its supervisory activities (i.e. in respect of both the prescribed bodies and financial statement review), the Authority will seek to employ risk assessment and selection methodologies.

8. Approach - Bodies Each prescribed body will be the subject of a thorough initial review. Reviews will encompass an examination of, inter alia, each body’s constitution, bye-laws (including complaints, investigation and disciplinary processes and procedures), regulations, standards and, where applicable, monitoring processes and procedures. Subject to any deficiencies etc., each body’s bye-laws etc. will be approved by the Board.

9. Approach - Bodies Annual ex-ante examination and approval of bodies’ regulatory and monitoring plans. Annual ex-post examination of bodies’ reports of regulatory and monitoring activity. Subsequent reviews of bodies will be performed on a risk analysis basis. S25 visits to members / member firms will be performed in accordance with Board policy.

10. Approach – F/S Review Develop financial statement review methodologies and programmes. Develop risk assessment and selection models. Commence reviews in accordance with Board policy and risk assessments. Examine apparent instances of non-compliance with law and/or Standards and address as appropriate. Liaise with UK and EU counterparts – consistency.

11. Related Activities • In the furtherance of its objectives, the Authority has an involvement in a number of related fora: • APB – observer status • EECS - member • CLRG - member • POBA – common director • Involvement in such fora likely to increase significantly as operations commence.

12. Current Agenda • Matters currently on the Interim Board’s agenda include: • Apportionment model; • Prescription; • Recruitment; • Premises & related logistics; • Optimum scheduling of commencement orders.

13. End of Presentation • Thank You