Discipline with regulation

Article Abstract:

The Audit Registration Committee (ARC) of the Institute of Chartered Accountants in England and Wales functions to regulate and observe the registration of auditors. From its earlier existence as mere processor of applications and registrar of auditors, ARC has now redirected its focus on monitoring compliance with regulations and evaluating the fitness of firms and partners. The committee is composed of chartered accountant members and non-accountants so as to address the concerns of accountancy professionals and the public interest as well. Before taking the proper regulatory measure, ARC allows concerned firms to defend themselves from the criticisms lodged against them. Working closely with the Joint Monitoring Unit, ARC analyses the weaknesses of firms and gives suggestions on how to remedy the condition. Sometimes it bars the registration of firms or sets restrictive conditions. An appeal may be made to the Review Committee regarding such ARC decisions.

Management, Auditing, Institute of Chartered Accountants in England and Wales

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A question of responsibility

Article Abstract:

The incorporation of statements of auditors' and directors' responsibilities in the annual financial statements of companies has become one of the more obvious trends in financial reporting. The rationale for this relatively recent practice lies in the effort to narrow the expectation gap between what users want from an audit report and what the report actually provides. This effort, which has the support of the Auditing Practices Board (APB), has led to the inclusion of responsibility statements as a means of clarifying the exact roles of auditors and directors in the preparation of audit reports. Two factors have helped influence the adoption of this practice: the issuance of the APB's SAS 600 and the report of the Cadbury Committee.

Accounting and auditing, Financial statements

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What sort of world are we trying to build

Article Abstract:

The Fifth Directive of the European Commission contains proposals concerning the structure of public companies with limited liability and the powers and obligations of their officials, including directors and auditors. The Fifth Directive would increase the personal liability of both directors and auditors. Such an action, by reversing the burden of proof and increasing the statutory liabilities that directors face, might make them too cautious. Regulation tends to increase rather than decrease, and the Commission should not create regulation due to political expediency and should measure the impact of its proposals more carefully.

Europe, European Union. European Commission

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