Finance Minister Charges the Accountancy

In serving the public's interest effectively, key areas for consideration by the accountancy profession should include strengthening its regulatory framework, developing proper monitoring and disciplinary oversight and improving mechanisms for enhanced quality audits and corporate accountability.

Speaking at a seminar hosted by the Public Accountancy Board, the Minister of Finance, Dr. Omar Davies outlined these areas as major priorities for the local accountancy profession.

With regard to the regulatory framework, he noted that the Public Accountancy Act had been strengthened earlier this year to enhance standards of professionalism and to increase its authority over Registered Public Accountants (RPAs) in Jamaica. The amendments to the Act also provide a formal mechanism for the Institute to undertake specific functions on behalf of the Public Accountancy Board (PAB).

Dr. Davies expressed optimism that the input of the Institute could transform the current system into one that will inspire public confidence and provide the flexibility to respond to the changes taking place in the accountancy profession globally.

He cautioned, however, that in going forward the profession must play a pivotal role in resolving the vulnerabilities and weaknesses that could undermine its integrity in the eyes of the public. The Minister charged the leaders of the profession to be proactive in strengthening the monitoring and enforcement mechanisms that are critical to protecting the integrity of the profession and to ensuring compliance among members.

"An area where I believe there is need for improvement, and which lends itself to a stronger collaborative relationship between the PAB and the ICAJ, is the creation of an effective disciplinary mechanism. The profession currently adheres to established standards. However, a mechanism must be in place to monitor adherence to these standards, to promote prompt investigation of violations and to take disciplinary actions against sub-standard performance and questionable conduct of members," Dr. Davies said.

"The truth is that we still have a far way to go in seeking to establish credible and transparent mechanisms to promote discipline and to deal with those who deviate from established Code of Conduct," he added.

Dr. Davis noted that protecting the confidentiality of investigations into disciplinary matters and also into alleged audit failures will be a challenge, particularly, in cases where those charged with enforcing discipline have to take action against a colleague. Nevertheless, there must be effective and transparent mechanisms, if the profession is to maintain confidence in the integrity of its system, he added.

He added that the profession also needed to be more proactive in the monitoring of audit quality and competence. According to Dr. Davies, the importance of continuing education is vital in this regard and he commended the ICAJ for the priority it has given to this issue.

"However, while we seek to develop the skills of practitioners, attention should also be focussed on promoting full adherence to International Accounting Standards (now International Financial Reporting Standards) to ensure comparability across sectors of the economy," he noted.

Another key role for the profession relates to the promotion of improved corporate governance and reforms designed to increase corporate accountability.

"While steps have been taken to modernise accounting and audit practices and also to correct a number of existing deficiencies, there are still a few critical areas which need to be addressed. Other jurisdictions have sought to address them through ongoing reforms, and I would encourage the Board to lead the discussions on the appropriate stance for the profession in Jamaica, " he said.

These issues include audit independence, that is, the rules associated with the scope of non-audit services to be performed by an audit firm; mandatory period for the rotation of auditors; responsibilities of CEOs and financial officers and penalties for making fraudulent assertions in the preparation of statements.

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