Coming with clean hands

ACCA is the largest and fastest growing international body with over 345,000 students and members in 160 countries.

In this Q&A with Business Day, Mr Khan took the opportunity to explain why ACCA wanted to roll out its quality assurance programme and its impact on local accountants.

He also stressed that ACCA will not tolerate any of its members being involved in criminal activity, including money laundering.

Newsday: Mr Khan, what brings you to the Caribbean?

Khan: I am visiting Trinidad and Jamaica for two reasons.

Firstly, to roll out ACCA’s global quality assurance programme in the Caribbean and, secondly, to see if we can undertake this programme in conjunction with the national accountancy bodies whom we already co-operate with in a number of areas.

Newsday: What exactly is ACCA’s global quality assurance programme?

Khan: It is a programme of inspection visits to practising firms to see whether they are following ACCA rules, the relevant accounting and auditing standards and "best practice" procedures to ensure clients are given good service.

It’s all about quality and helping ACCA firms in the Caribbean further improve their standards.

Newsday: And what has prompted ACCA to launch this programme?

Khan: ACCA believes that all practising accountants should be subject to regulation. It’s a public interest issue and we have been running this programme in the United Kingdom since 1991, when it only covered audit work done by firms but we have developed it over the years to cover all professional services to clients.

Newsday: So the purpose is to advise ACCA firms how to get things right?

Khan: Yes, but it’s not only that. ACCA members are required to comply with rules and standards so although we do advise ACCA firms how to get things right, we expect them to follow the advice we give them. Furthermore, if we find any evidence of unethical or illegal behaviour, we take regulatory action immediately.

Newsday: Why do you want to undertake this programme in conjunction with the national accountancy bodies in the Caribbean?

Khan: Because most of these accountancy bodies, such as the Institute of Chartered Accountants of Trinidad and Tobago and the Institute of Chartered Accountants of Jamaica, are members of the International Federation of Accountants (IFAC) — as is ACCA.

IFAC has recently issued a requirement for all its member bodies to implement quality assurance programmes. As almost all ACCA practising accountants are also members of their national accountancy bodies, they would be subject to two separate quality assurance programmes — ACCA’s programme and that which their national accountancy body might develop.

That would involve a duplication of effort and expense and would serve no purpose. Our intention is to work with national accountancy bodies to operate a single quality assurance scheme jointly.

That way we can keep costs down and avoid firms having to receive two inspection visits. ACCA has substantial experience in this work and my discussions with national accountancy bodies have been very promising. We do co-operate very well together in areas other than quality assurance.

Newsday: Have these quality assurance programme been launched as a result of high profile audit failures such as Enron?

Khan: No, ACCA established its programme long before Enron and in the US a peer review programme supervised by the AICPA was in place. But you would be right in saying that Enron put a sharper focus on it.

For example, the US abandoned its peer review programme for the audit of public companies, which basically involves one audit firm inspecting another firm’s audit work.

It was replaced with a system of independent statutory regulation operated by the US Public Company Accounting Oversight Board. In the UK we have never relied on peer review but have had these inspections conducted by independent people, like the staff in ACCA’s Monitoring and Supervision Department. Our inspectors are experienced former auditors and highly trained to conduct these inspection visits to a high standard.

Newsday: Let’s move on to the subject of money laundering. Reports suggest there is a lot of it happening in the Caribbean and that accountants are involved in it. Is it true and what is ACCA doing about it?

Khan: I have heard of the reports. What I can say, however, is that we have no evidence that ACCA firms are involved. ACCA has its own money laundering regulations which all members have to comply with. These regulations support national laws on money laundering and during our inspection visits we check to make sure that firms comply with ACCA’s regulations as well as national regulations.

Newsday: And what would you say to anyone who suggested that an ACCA firm was involved in laundering money?

Khan: If anyone has evidence to suggest an accountancy firm is breaking the law — either by laundering money or any other serious offence, they should report that to the appropriate authorities such as the police.

If it’s an ACCA firm I would urge them to also refer the matter to ACCA’s Professional Conduct Department which investigates complaints from clients and the public. We will co-operate with the police in their investigation and also take action ourselves if there is clear evidence of wrongdoing. ACCA will not tolerate its members undertaking criminal activities of any sort, including money laundering. I would like to reassure members of the public that if they have any concerns about ACCA members’ conduct they can raise them with us and we will investigate.

Newsday: Mr Khan, thank you.

Khan: You are most welcome.