Chartered Institute of Management Accountants

07 January 2003

The Government must see UK accountancy regulation in the context of the development of international standards in accounting, auditing and ethical matters, and not as a stand-alone issue, according to CIMA.

In its response to the UK Government Review of the Regulatory Regime of the Accountancy Profession, CIMA argues that the Government must get accounting regulation in perspective. This means limiting bureaucracy and concentrating on measures that enhance the UK's effectiveness and efficiency in global markets, when it makes decisions about the regulation of the profession.

CIMA is unique in comparison with other accountancy bodies. It is a specialised business accountancy body that focuses entirely on accountants in business and even its very small number of members in practice provide services that relate to business success and management rather than any reserved, regulated function.

Welcoming the opportunity to improve the efficiency and cost-effectiveness of accountancy regulation, CIMA's recommendations include:

• Combining the role of the Accountancy Foundation into that of the Financial Reporting Council and transferring to the FRCF the functions of the Boards within the independent regulatory framework
  
• Transferring the functions of the Ethics Standards Board to the Review Board
  
• Creating a regime that acknowledges the responsibilities of the professional bodies themselves as regulators of their members
  
• Improving communication and transparency, including more consultation and ensuring that all meetings are open and papers available
  
• Recognising that the different needs of the segments of the profession require different arrangements:
  
• In particular, for business accountants, review (including the review of ethical arrangements) is the function that is central to the public interest
  
• In serious public interest cases, individual company employees should be referred back to their professional bodies' 'reviewed' disciplinary processes.

'Regulation requires a comprehensive approach and an international, rather than little Englander, perspective,' said Charles Tilley, chief executive of CIMA. 'Although the DTI and others are also examining a range of matters, including corporate governance and company law, there is a tendency to see the problems that have arisen as specific to accountants, including auditors, and to see the solution as further regulation of accountants. Strong regulation is welcome, but a broader approach is needed to tackle corporate governance issues.

'Real transparency is also key to success,' he continued. 'We need to establish open communications between the regulator and the profession to achieve common objectives, and a transparent approach to regulation. This is in the public interest and in the profession's interest.'

If you would like more information please contact Gemma Townley
Phone: +44 (0)20 8849 2254
Email: gemma.townley@cimaglobal.com

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