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31 Dec 08

Gordon A Macphail CA has admitted liability to disciplinary action in respect of the following:

In the light of the economic and financial crisis, the following ICAS policy positions have been updated as a basis both for ongoing policy work and for implementation through its members.

There are four overall policy themes:

• Public interest: to place the general public interest first, notwithstanding our charter requirements to represent and protect our members’ interests.

• Ethics and integrity: to reaffirm our commitment to act with ethics and integrity and encourage our members to do likewise.

• Better regulation: to support more focused and effective regulation, in accordance with the “principles of better regulation”.

• Principles not rules: to reaffirm support for principles rather than rules, with scope for the exercise of professional judgement.

Policy positions in relation to the economic and financial crisis

ICAS seeks to be involved in the debate in those areas where it has a locus and clear expertise.

Professional behaviour

Encourage and reinforce ethical behaviour among our members and strengthen the application of ethical frameworks.

Encourage greater ethics and integrity in business, through the Institute’s ongoing work and through the ethical leadership of our members.

Encourage the adoption of a single globally accepted principles-based code of ethics for all members of professional accountancy bodies.

Encourage corporate responsibility amongst our members.

Financial reporting

Principles-based standards for financial reporting, which allow for the exercise of professional judgement.

A set of high quality international standards developed under due process and in the public interest, to support transparent financial reporting.

Improvement in the financial reporting framework – to reduce the current level of complexity in financial reporting and improve transparency and accessibility to key information.

Support for a mixed measurement model in financial reporting in which measurement bases reflect the current circumstances of the entity, its access to markets and management’s intentions.


Under this mixed measurement model, specific support for the use of fair value for valuing certain categories of financial instruments.

Corporate governance and non-executives


Boards should assess whether they have the right skill sets.

Non-executive directors (NEDs) need to understand the business, understand their role and responsibility, and be able to challenge executive directors – NEDs should receive proper induction in relation to the operations of the company, and training in relation to their role and responsibilities as NEDs.

Need for better high level oversight of the “deal-makers” in banks and salesmen/entrepreneurs in other companies – need for more comprehensive and fuller risk assessments.

Encourage individuals to act as NEDs, but subject to proper due diligence of the company, and facilitate access to a wider pool of persons, including CAs, suitable as NEDs.

Reassess remuneration strategies and seek to align director and employee incentives with the organisation’s longer term objectives.

Strengthen audit committees to have more members with financial expertise.

Better regulation

Promote market based action wherever possible.

Seek to balance risk, responsibility and regulation, to avoid stifling entrepreneurship.

Support established principles of better regulation and ensure followed by Government and regulators such as the FRC, FSA and TPR.

Argue strongly against knee-jerk reaction for greater/more prescriptive regulation. Support review of effectiveness of regulation and enforcement.

Where applicable, highlight any foreseen unintended consequences of new proposed regulations.

Role of the auditor/future of assurance

Support for principles-based auditing standards, which allow for the exercise of professional judgement by the auditor in performing an effective and efficient audit, and resistance to proposals which may increase the number of compulsory requirements contained in auditing standards.

Highlight the need for particular attention in audits of financial statements on the following:

• Going concern assessments.

• Asset valuations.

• Impairment provisions.

• Management judgements and assumptions (given pressures on directors).

• Call for updated guidance on going concern for auditors (from FRC) to take account of the current general uncertain economic and financial conditions.

• Seek to reduce the “expectation gap” by educating users.

• Defend the audit profession from ill-informed proposals and be proactive in proposing solutions in the public interest.

• Seek statutory limitation of liability for auditors.

Have your say

Page No: 75


Gordon A Macphail

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