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Accountancy Development International, Regional , National Dean Estelita C. Aguirre PowerPoint Presentation
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Accountancy Development International, Regional , National Dean Estelita C. Aguirre

Accountancy Development International, Regional , National Dean Estelita C. Aguirre

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Accountancy Development International, Regional , National Dean Estelita C. Aguirre

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  1. Accountancy Development International, Regional, National Dean Estelita C. Aguirre ASEAN Federation of Accountants President 11th PHALGA Annual National Convention Dumaguete City, May 29, 2014

  2. Presentation Outline • Looking Back • The International Scene (SMOs) • The Regional Scene (ASEAN MRA) • The National Scene (Phil PGS)

  3. Looking Back Accountancy Scandals • Enron in USA • Parmalat in Italy • Kanebo In Japan • Satyam in India • American International Group in Japan • Bank of Credit and Commerce in London • WorldCom, Qwest Communications, Waste Management, Tyco International, Health South • CAP, Globe Asiatic in Phil • PDAF scandals

  4. Looking Back The Impact • loss of confidence in the audited FSs • loss of public investor’s confidence • economic and financial crises in all parts of the world including ASEAN Region • passage of Sarbanes-Oxley Act 2002

  5. Looking Back The Challenges • To rebuild the accountancy reputation • To bring back the confidence in audited FSs. • To adopt and implement international standards and get the commitment of PAOs all over the world • To establish a strong accountancy profession internationally, regionally and domestically

  6. Focus: The International Scene

  7. International Federation of Accountants • The International Federation of Accountants (IFAC) is an association of 173 member-bodies in 130 countries of the world, in different stages and adoption of international accounting standards • Member- bodies are required to demonstrate compliance with the Statements of Membership Obligations (SMOs) • :

  8. Independent Setting Boards • International Accounting Education Standards Board (IAESB) • International Auditing and Assurance Standards Board (IAASB) • International Public Sector Accounting • Standards Board (IPSAS) • International Ethics Standards Board • for Accountants (IESBA)

  9. International Accounting Standards Board • created by IFRS Foundation (not IFAC) • an independent standard setting body founded in 2001 replacing the International Accounting Standards Council (IASC) • develops and issues IFRS (the new name of IAS issued starting April 2001)

  10. Statements of Membership Obligations (SMOs) • A framework for credible and high quality professional accountancy organizations • Provide clear benchmarks to assure high quality • performance by professional accountants

  11. Statements of Membership Obligations (SMOs) SMO 1 Quality Assurance SMO 2 Int’l Accounting Education Standards (IAES) SMO 3 Int’l Assurance &Auditing Standards (IAAS) SMO 4 IESBA Code of Ethics SMO 5 Int’l Public Sector Financial Reporting Standards (IPSAS) SMO 6 Investigation and Discipline SMO 7 Int’l Financial Reporting Standards (IFRS)

  12. Building Blocks of SMOs (Statements of Membership Obligations) SMO 4 Ethics SMO 1 QA SMO 6 I&D SMO 7 IFRS SMO 3 ISA SMO 5 IPSAS SMO 2 Education Standards

  13. Focus: • The Regional Scene

  14. ASEAN COMMUNITY • 9th ASEAN Summit in Bali Indonesia • Leaders declared Bali Concord II which contains AEC as one of its important pillars (Oct 7, 2003) • 12th ASEAN Summit in Cebu • Recalling the ASEAN Vision 2020, agreed on the acceleration of the establishment of ASEAN Community by 2015 for the 3 pillars (Dec 8, 2006) • 13thASEAN Summit in Singapore • Signing of Agreed on the adoption of the AEC Blueprint to implement the AEC by 2015 (Nov 20, 2007)

  15. ASEAN COMMUNITY 14th ASEAN Summit, Cha-Am HuaHin, Thailand (March 1, 2009) when the Declaration on the Roadmap for the ASEAN Community (2009-2015) was signed, including ASEAN Political-Security Community Blueprint ASEAN Economic Community Blueprint ASEAN Socio-Cultural Community Blueprint

  16. ASEAN AGREEMENT Roadmap for an ASEAN Community (2009-2015) One vision. One identity. One Community.

  17. ASEAN OBJECTIVE Transform ASEAN into a stable, prosperous, and highly competitive region with equitable economic development, and reduced poverty and socio-economic disparities.

  18. KEY CHARACTERISTICS OF ASEAN Economic Community A single market and production base A highly competitive economic region A region of equitable development A region fully integrated into the global economy

  19. . Free Flow of Professional Services via MRA.

  20. WHAT IS MRA Amutual recognition agreement is an international agreement by which two or more countries agree to recognize one another's conformity assessments. AMutual Recognition Arrangement (MRA) is an international arrangement based on such an agreement. .

  21. ASEAN MRA ASEAN MRA is a multilateral arrangement among ASEAN countries or bilateral arrangement between two ASEAN countries to enable professionals registered in its signatory countries to be equally recognized in another signatory country .

  22. ASEAN MRA TIMETABLE • 2008-2009 Complete MRAs which are under negotiation : (architectural, accountancy, surveying, medical, dental) • 2010-2013 Identify and develop MRAs for other professional services • 2014-2015 Complete implementation of completed MRAs by 2015 .

  23. ASEAN MRA OBJECTIVES • Facilitate mobility of practitioners within ASEAN • Exchange information and enhance cooperation in respect of mutual recognition of practitioners • Promote adoption of best practices on standards and qualifications • Provide opportunities for capacity • buildingand training of practitioners

  24. ASEAN MRAs

  25. MRA FRAMEWORK ON ACCOUNTANCY SERVICES • Education • License • Competencies • Experience • Compliance with International Federation of Accountants (IFAC) Standards and Guidelines

  26. Coordinating Committee on Services And Professional Regulatory Authorities • CCS is the official ASEAN Body looking after policies and issues in trade in services. • Established in January 1996, and is reporting to the ASEAN Economic Ministers (AEM) through the Senior Economic Officials Meeting (SEOM) • The Professional Regulatory Authorities of • 10 ASEAN Countries meet by profession

  27. ASEAN MRA ON ACCOUNTANCY SERVICES • Chaired by Singapore (Mr. Tan BoenEng of ISCA) • Final draft of MRA released on February 21, 2014, • after the 77th CCS meeting and the 13th meeting of the Professional Regulatory Authorities of the MRA on Accountancy

  28. ASEAN MRA ON ACCOUNTANCY SERVICES • Legal scrubbing done • Additional comments from Thailand just received • New BOA Chair Joel Tan-Torre to attend the 78th CCS meeting and 14th meeting of the PRA, in Vietnam on May 26-30, 2014.

  29. ASEAN MRA On AccountancyArticle 3 Scope • 3.1 The Arrangement shall cover the provision of accountancy services covered under Central Product Classification (hereinafter referred to as “CPC”) 862 of the Provisional CPC of the United Nations, except for signing off of the independent auditor’s report and other accountancy services that requires domestic licensing in ASEAN Member States.

  30. ASEAN MRA on AccountancyArticle 3 Scope • 3.2 Notwithstanding paragraph 1, cross-border movement of Professional Accountants providing external auditing services and other accountancy-related services that requires domestic licensing in ASEAN Member Statesmay continue to be facilitated through bilateral and/or multilateral MRAs between or among the Member States.

  31. Article 4 Qualifications to be an ACPA Qualifications to apply as an ASEAN Chartered Professional Accountants (ACPA) 1. Completed an accredited accountancy degree or professional accountancy examination program recognised by the National Accountancy Body (NAB) or Professional Authority (PRA) of the Country of Origin or Host Country, or has been assessed and recognized by the NAB or PRA as having the equivalent of such a degree;

  32. Article 4Qualifications to be an ACPA 2. possess a current and valid professional registration certificate in the Country of Origin issued either (a) by the NAB and/or the PRA of that country of origin and in accordance with its policy on registration/ licensing and/or certification of the practice of accountancy;

  33. Article 4Qualifications to be an ACPA 3. Has acquired relevant practical experience of not less than three (3) years cumulatively within a five (5) year period following the qualification referred to in No. 1; 4. Has complied with the Continuing Professional Development (CPD) policy of the Country of Origin ; and

  34. Article 4Qualifications to be an ACPA 5. Has obtained certification from the NAB and/or PRA of the Country of Origin, that he or she has no record of any serious violation of technical, professional or ethical standards, local and international, applicable to the practice of accountancy.

  35. Article 4Applying to become ACPA • Apply with the Monitoring Committee • Application submitted to ACPA Coordinating Committee • ACPACC assesses applicant • Upon acceptance by ACPACC , accountant shall be emplaced in the ACPA Register and accorded the title Asean Chartered Professional Accountant

  36. Article 4Eligibility of ACPA to Practice An ACPA shall be eligible to apply to the NAB and/or PRA of a Host Country to be registered as a Registered Foreign Professional Accountant (RFPA).

  37. Article 4Eligibility of ACPA to Practice • Be bound by local and international codes of professional conduct in accordance with the policy on ethics and conduct established and enforced in the country of origin. • Be bound by the Domestic Regulation of the Host country • Work in collaboration with a local Professional Accountant in the Host Country

  38. Article 5NAB and/or PRA Responsibilities of National Accountancy Body and/or Professional Regulatory Authority Read Article 5 of Draft MRA

  39. Article 6Monitoring Committee (MC) • A Monitoring Committee (MC) shall be established in and by each participating ASEAN Member States to develop, process and maintain an ASEAN Chartered Professional Accountants Register (ACPAR) in the Country of Origin. • Other Responsibilities of Monitoring Committee Read Article 6

  40. . Role of ASEAN Federation of Accountants and the ASEAN Member Bodies.

  41. AFA • Provides assistance to ASEAN member bodies on capacity building of accountants through exchange of knowledge and best practices • ASEAN MEMBER BODIES • Its ASEAN member bodies drive the adoption, harmonization and implementation of international accounting standards and practices. • All subject to the same benchmark – the SMOs

  42. AFA accomplished the following for ASEAN Secretariat: • Analysed the Country Requirements of the Prof Accountants and Practicing Public Accountants. 2. Coordinated with each countries’ focal points to confirm and update the information contained in The AFA’s Easy Guide to Setting up Accountancy Practices in ASEAN Countries

  43. AFA

  44. FOCUS: The National Scene 8

  45. Help from the World Bank • Report on the Observance of Standards and Codes (ROSC): • 1st ROSC (2001) led to the adoption of IFRS, IAS and IESBA Code of Ethics in the Phil • 2nd ROSC (2006) disclosed that all recommendations under the 1st ROSC were implemented except the oversight function (Quality Assurance Review) 8

  46. Help from the World Bank • 2009 World Bank Consultancy on QA • Recommendations for the • 1. setting up of the QAR Program • 2. setting up of the QAR Structure • 3. roles of PICPA and BOA • 4. Implementation procedure • Status: On hold because of case filed by a group of SMPs at the Regional court of Caloocan 8

  47. Help from the World Bank • 2013 World Bank Capability Building Program • Program to Strengthen Accounting Capacity in Mongolia, Philippines and Vietnam • Aimed at improving the Continuing Professional Development Systems of the 3 Member Bodies of CAPA • Implementing Agency - CAPA 8

  48. Help from the World Bank Why the 3 countries as the 1st batch? In its initial attempt, to restrict the scope of countries- to a manageable- but meaningful group. Mongolia – a country with the accounting profession still in the very early stage Philippines - with a highly developed, organized and sophisticated profession Vietnam – a country in the middle with a profession that has been developing rapidly, but still needs strengthening in several aspects 8