ICAJ to be made sole agent of the Public Accountancy Board

Source: Financial Gleaner, July 6, 2001

THE Institute of Chartered Accountants of Jamaica (ICAJ) has been granted increased powers to regulate the island's accounting profession by being designated the sole official agent of the Public Accountancy Board.

In the ICAJ's 2000-2001 report to members released ahead of the annual general meeting later this month, the Institute's president, Patricia Hayle, said the Ministry of Finance accepted their recommendation to be made sole agent of the Public Accountancy Board following expressions of concern that they were not empowered to carry out their regulatory responsibilities.

She said the recommendation was a result of the Institute's lobby paper entitled "Legal and Administrative Framework for the Practice of Accountancy in Jamaica".

According to Mrs. Hayle, as a result of the new designation, "the Institute may well find itself establishing and monitoring experience requirements for all licensees, and evaluating the appropriateness of the experience of all applicants for licences."

She said that would "go a long way towards safeguarding our profession against changes such as those recently unearthed by FINSAC (Financial Sector Adjustment Company)/statutory bodies."

Mrs. Hayle said the significance of the move should not be missed, especially since it juxtaposed the ICAJ's changeover to international accounting standards.

Just over a year ago, the disciplinary committee of the ICAJ ruled that a chartered accountant should be suspended from practice for two years, having been found deficient in his work as an auditor for the Century financial institutions.

However, an appeal committee later reduced the two year suspension to six months, and ruled that the sanctions handed down by the disciplinary committee, after a very exhaustive review process, were rendered ineffective as it was the Public Accountancy Board and not the ICAJ which licensed the accountant to practise.

In her report, Mrs. Hayle said nine members of the profession have been officially appointed by Cabinet to serve on the newly reconstituted Public Accountancy Board. They are: Eric Crawford, who will serve as president; Ethlyn Norton-Coke, vice-president; along with Jasper Burnett, Dennis Cohen, Raphael Gordon, Garth Kiddoe, Victor Markman, Rolf Lanigan, Kenneth Lewis and Carol Jones. The appointments are for three years.

GLOBAL STANDARDS

ICAJ Council member, Dennis Brown, said the Accounting Standards Committee has undertaken to achieve convergence of local accounting practices with global accounting standards, and to move to full adoption of international accounting standards as of June 2002.

A major focus during the year, he said, has been the development of a framework to facilitate deeper integration of the Jamaican Accounting Standards with International Accounting Standards.

"International Accounting Standards are expected to become the mainstream reporting standards of the global economy," said Mr. Brown. "As companies become more engaged in cross-border trading and the consequential increase in capital flows evolves, the need for an internationally-recognised financial reporting system is heightened. The attractiveness of Jamaica's financial market system will, therefore, be supportable on a platform of high quality, globally accepted, accounting principles."

In her report, finance director, Prunella Vassell, said the challenges faced by the Jamaican people and the financial sector in particular during the year, also impacted on the accounting profession, its members, students, and the Institute. However, she said "we have met these challenges head on and have, we consider, emerged victorious."

The financial results of the Institute show a 17.3 per cent reduction in the surplus generated from its operations, but that has produced a 21.8 per cent increase in the ICAJ's accumulated fund, a 14 per cent reduction over the previous year.

The Institute has recorded a small but steady increase in its membership, moving from 609 at the end of March 1997 to 747 this year. At the same time, there was a significant increase in the number of students, moving to 4,352 from 2,773 at the end of March 1997.

Notwithstanding those positive factors, Mrs. Vassell said, the year ahead promises to be testing. Faced with rising costs, the growing demand on the ICAJ's resources by students and members, and the need to improve service levels to their various publics, the Council recommended increases in membership and other fees, which took effect in April.

She said a number of changes have taken place over the past few months which have had a negative impact on the Institute's cash flow and the effects would continue to be experienced over time. The cost of maintaining the technological upgrade which was recently undertaken to their systems, maintenance of their website, additional continuing public education and enlarged student affairs activities mandated by the ICAJ's bye-laws would also result in continued increased administration and other costs, she said.