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Action Plan Developed byThe Institute of Financial Accountants

BACKGROUND NOTE ON ACTION PLANS

Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC

Compliance Self-Assessment Questionnaires. They form part of a continuous process within the IFAC Member Body Compliance Program tosupport the ongoing development and improvement of the accountancy profession around the world.

Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challengesspecific to each jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing nationalenvironments and stages of development, and will be subject to periodic review and update.

Refer to responses to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self-AssessmentQuestionnaire for background information on each member and associate their environment and existing processes. These responses may beviewed at:http://www.ifac.org/about-ifac/membership/compliance-program/compliance-responses

Use of Information

Please refer to the Disclaimer published on the Compliance Program website.

ACTION PLAN

IFAC Member/Associate: Institute of Financial Accountants (UK)Approved by Governing Body: Chief ExecutiveOriginal Publish Date: November 2010Current Publish Date: March 2012Next Update: March 2013
http://www.ifac.org/about-ifac/membership/compliance-program/compliance-responseshttp://www.ifac.org/about-ifac/membership/compliance-program/compliance-responseshttp://www.ifac.org/about-ifac/membership/compliance-program/compliance-responseshttp://www.ifac.org/about-ifac/membership/compliance-program/compliance-responses


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Action Plan Developed byThe Institute of Financial Accountants (IFA) (UK)

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Glossary

ACCA Association of Chartered Certified AccountantsCPD Continuing Professional DevelopmentIASB International Accounting Standards BoardIAESB International Accounting Education Standards BoardICAEW Institute of Chartered Accountants in England and WalesICAI Chartered Accountants IrelandICAS Institute of Chartered Accountants of ScotlandIESBA International Ethics Standards Board for AccountantsIES International Education StandardIFA Institute of Financial AccountantsIFRS International Financial Reporting Standard

IPSAS International Public Sector Accounting StandardISA International Standards on AuditingI&D Investigation and DisciplineISA International Standard on AuditingRQB Registered Qualifying Body (for auditors in the UK)SMP Small or Medium-sized PracticeSMT Senior Management Team (of IFA)


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Action Plan Subject: SMO 1 Quality Assurance

Action Plan Objective: To show the IFAs commitment to quality assurance in relation to its Members in Practice certification

and monitoring scheme.

# Start Date Actions Completion

Date

Responsibility Resource

Background:

The IFA is not an UK Registered Qualifying Body (RQB-for auditors); any of its members who offer audit services do so under the auspices of anRQB (eg. Institute of Chartered Accountants in England and Wales (ICAEW), Institute of Chartered Accountants (ICAS), the Association ofChartered Certified Accountants (ACCA), the Institute of Chartered Accountant in Ireland (ICAI). However a significant proportion of its membersoffer other accountancy and assurance services to the public. All members in practice in the United Kingdom must hold the Institutes PractisingCertificate. The IFA is, however, one of 25 designated SupervisoryAuthorities under the UKs Money Laundering Regulations 2007, andundertakes monitoring and regulation on behalf of the UK Treasury. The aim of the IFAs policy is to reinforce the confidence of the public in thehigh standards of ethical compliance and professional competence of practising members through the demonstration of best practice andregulation.

Regulat ion of Pract is ing Members

1. November2009

Detailed registration forms sent out to all UKpractising members to request information relating totheir anti-money laundering supervision

CompletedJune 2010,

thensubsequent

annualmonitoring

DirectorProfessionalStandards

Staff

2. November2009

Recruitment of a Director of Professional Standards,to meet an appropriate job description. Makeprovision for succession as and when appropriate.

RecruitmentcompletedNovember2009 and

successionplanningongoing

ChiefExecutive

Council

3. June 2010 Rationalise the issue of IFA Practising Certificates, soas to remove the ambiguity of a separate ComplianceCertificate (agreed by IFA Council June 2010)

CompletedJanuary 2011


Staff

Maintaining Ongoing Processes

4. May 2010 New on-line Members Handbook written and Ongoing (most Director Staff, website


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# Start Date Actions CompletionDate


published, to give practical guidance to members recent updateFebruary 2012)

ProfessionalStandards

5. 2009 Review, add to, delete or replace if necessary, online

information and guidance provided for the benefit ofIFAs Members in Practice.

Ongoing Director


Staff, members, website

6. 2010 Publicise the IFAC Practice Management Guide andother appropriate IFAC guidance for SMPs on the IFAwebsite

Initialcompletion2010 (to beupdated asnecessary)


Staff, website

7. 2011 Review the working of the Institutes ContinuingProfessional Development (CPD) scheme in order tocomply more closely with IFAC SMO 2. IFA Councilagreed June 2011 to change from input to outputCPD, and to extend monitoring to all non-retired or

non-academic members worldwide. Apart from UKPractising Members (all of whom will continue to bemonitored annually), a statistically-valid sample willbe checked each year from 2013.

End 2013 Director,ProfessionalStandards

Director

Education

Staff, website

8. 2011 Review whether it would be appropriate, advisableand indeed feasible to introduce a mandatory qualityassurance review programme for members, giventhat none are registered auditors

End 2013 DirectorProfessionalStandards

This would require considerablymore staff and memberresource than we at presenthave available, together withfinancial resources at presentbeyond our budget.

Review of IFAs Compliance Information9. Ongoing The IFA recognises the need for it to

perform periodic reviews of responses to

the IFA Compliance Self-Assessment

questionnaires, and to update sections

relevant to each SMO. It undertakes to

inform IFAC Compliance staff, insofar as

resources permit, about the updates

necessary to enable re-publication of

updated information.

Ongoing SeniorManagement

Team

Senior Management Team,especially Director ofProfessional Standards andsupporting staff


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Action Plan Subject: SMO 2 International Education Standards for Professional Accountants and other EDCOM GuidanceAction Plan Objective: To update and raise the standards of the qualifying examinations, and to ensure that members

understand and commit themselves to the CPD requirements



Background:

The IFA is committed to raising its educational standards for all applicants for membership, whether students or prior-qualified, to include specificpapers on Ethics. The Ethics programmes at both Diploma and Professional levels will gradually become available at an increased number ofcentres with the aim of creating accessibility for all students. Distance Learning versions will also be added. The Ethics programme embeds theCode of Ethics of the International Ethics Standards Board for Accountants (IESBA) and looks at the practical application of ethical principles inrealistic business related scenarios.

Continuing Professional Development (CPD) is currently mandatory for all practising members in the United Kingdom, and evidence of the previousyears CPD is required on application and renewal of the Practicing Certificate. The IFA has changed the CPD requirement from input to output

from 2012, as part of which the members will be asked to reflect on their development and gauge the value of the outcomes in terms of personalcareer development. The new CPD requirements will also reflect best practice as determined by IFAC.

The extension of the Practising Certificate regime including CPD to other states outside the UK will be considered.

IFA also intends to extend the CPD requirements to members in business, with a likely target date of 2012.

The IFA core education programme itself was re-launched in 2010 and now embeds International Financial Reporting Standards for Small andMedium Entities (IFRS for SMEs) within the syllabus. Such standards are explicitly examined. Dedicated programmes covering IFRS and IFRS forSMEs have also been launched.

IES 6 Assessment of Profession al Capabil i t ies and Com petence

10. 2009 Replacement of the examination syllabus andstructure with a more relevant and more testingversion which will better equip students to act in thecapacity of members when qualified.

Firstexamination

2010

DirectorEducation,

Council

Director Education and Staff

11. 2009 The IFA is seeking accreditation from the UKOFQUAL for its programme during 2011. This waspart completed during 2011 and will be completedentirely before end 2012.

To becompleted by

end 2012

DirectorEducation,

Council

Director Education and Staff


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12. 2010 Reassessment of the Accredited Prior Learning routeto membership and introduction of revised criteriafrom early 2013.

2012 DirectorEducation,

Director


Council

Directors Education andProfessional Standards

13. 2011 The introduction of Professional ExperienceRequirements will be discussed by IFA Council in late2012 and, if agreed, the Institute will aim to introducethem by 2014.

2014 DirectorEducation,

DirectorProfessionalStandards,

Council

Director Education, DirectorProfessional Standards

14. 2012 Initiate new member resource for vetting the currentprocess of admission of new UK members by a CVonly route (ie admission on the grounds of adequate

relevant experience). The ultimate aim is to cut off thisroute entirely by the end of 2015/6.

2015/6 DirectorProfessionalStandards,

Council,MembershipPanel (to beappointed)

New Membership Panel, Staff

IES 7 CPD

15. 2010 2.14.3.1 Type of CPD RequirementChange of CPD system from input (hours, points) tooutput; this involves not only clear record-keeping butthe member must clearly justify the CPD undertakenthrough assessment of the relevance of outcomes.

2012/3 DirectorProfessionalStandards,

Council

Staff

16. 2011 2.14.3.8

Monitoring of CPDAll members in practice in the UK are currentlychecked to ensure they have completed the requiredamount of CPD; this will have to change to closerscrutiny (monitoring) when the CPD requirementchanges from input to output.

A statistically-valid sample of members in businesswill also be monitored from the proposed change toinclude them in the scheme from 2013.

2013 DirectorProfessionalStandards,

Council

Staff


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17. 2011 An ongoing review of examination syllabus andstructure will assure the continuation and stability ofthe new raised standards.

Ongoing DirectorEducation Staff and senior members asappropriate

18. 2010 Appointment of new teaching colleges to the list andtheir accreditation; accreditation of new examinationcenters.

Ongoing BusinessDevelopment

Director

Staff

19. 2011 The Bye-laws have been amended as necessary toensure that members comply with CPD requirements,including the specific requirement on them to maintaina record, whether or not they are asked to supply

information in any one particular year

Ongoing DirectorProfessionalStandards,

Council, AGM

Director Professional Standards

Review of IFAs Compliance Information

20. Ongoing The IFA recognises the need for it to










Team

CEO, Director of ProfessionalStandards, Director ofEducation and supporting staff


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Action Plan Subject: SMO 3 International Standards, related Practice Statements & Other papers issued by the IAASBAction Plan Objective: N/A

# Start Date Actions CompletionDate Responsibility Resource

Background

SMO 3 is not directly relevant to the IFA, which, as a United Kingdom-base body, is subject to the statements and issued Reporting Standards ofthe UK Auditing Practices Board (APB) and Accounting Standards Board (ASB) (both operating boards of the Financial reporting Council). The

APB and ASB manage the interface with the IAASBs International Standards, Practice Statements and other papers on behalf of the UKsprofessional accountancy bodies.


21. Ongoing Continue to support the relevant standard

setting bodies in the UK the APB and

ASB, encouraging and supporting where

possible ongoing convergence to the

International Standards on Auditing

(ISAs).

Ongoing DirectorProfessionalStandards,

Council

Director Professional Standards

Review of IFAs Compliance Information

22. Ongoing The IFA recognizes the need for it to









Ongoing Senior TeamManagement

CEO, Director of ProfessionalStandards, Director ofEducation and supporting staff


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Action Plan Subject: SMO 4 IESBA Code of EthicsAction Plan Objective: To inform and notify members, affiliates and students of the provisions of the IESBA Code of Ethics (as the IFA

Code of Ethics) and to support their compliance with this.

SMO4 Start Date Actions CompletionDate Responsibility Resource

Background:

The Institute of Financial Accountants is a professional accountancy body that qualifies and regulates professional accountants, and it thereforehas a responsibility to the public to ensure its members and students appreciate and abide by their ethical responsibilities. The IFA, as a MemberBody of IFAC (International Federation of Accountants), has adopted the Code of Ethics and its Fundamental Principles for this purpose.

The Code of Ethics is reviewed on a regular basis by the independent IESBA which is supported by IFAC (composed of both practising andbusiness accountants from among its worldwide membership) and is therefore applicable in all countries. The application of consistent standardsand demonstration of attitudes and conduct that are appropriate for a professional accountant are recommended in this Code of Ethics.

The IFA expects its members and students to have a good understanding of the fundamentals of professional ethics and to know the constraintsplaced on them as individuals, whether in practice or employed in business. Appropriate values, ethics and attitudes should i nfluence everythingIFA members and students do irrespective of sector, job role or level of seniority. Section A of the Code outlines the fundamental principles onwhich the Code is based. For IFA professional accountants in business, Section B provides core advice on how the conceptual framework shouldbe applied in their areas of activity. Accountants in practice should be aware that the principles outlined in Section C do not only apply to auditors,but to all practising accountants and tax advisers.

The Code of Ethics, having been adopted by the IFA Council, may be regarded as part of the laws of the Institute; failure to observe the Code maybe regarded as a disciplinary offence

Adop ting the IESBA Code of Ethics

23. Early 2010 Reviewed new revised IESBA code, draftedpreface

Completed DirectorEducation,President

Staff

24. 2010 Adopted IFA Code of Ethics closely based onIESBA Code of Ethics (Sections 2 and 3 reversedin IFA Code)

Completed Council, DirectorEducation,

DirectorProfessional

Standards, ChiefExecutive

Staff


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SMO4 Start Date Actions CompletionDate


Promotin g the Code of Ethics to Members and Students

25. June 2010 Code of Ethics available online atwww.ifa.org.uk (members section, but accessible openly)

CompletedJune 2010

DirectorEducation

Staff

26. June/July2010 andongoing

New code promoted in Institute e-newsletters andmagazine

Ongoing DirectorEducation,

DirectorProfessional

Standards, ChiefExecutive

Staff

Ethics support serv ices

27. Ongoing Guidance on resolving ethical conflicts in institutenewsletters and magazines, using case studies

Ongoing DirectorEducation,


Staff and guest writers

28. Ongoing Ethics workshops for UK members Ongoing DirectorProfessionalStandards,

DirectorEducation inalliance withInstitute for

Business Ethics(UK)

Staff. Financial resources tobe allocated once forwardprogramme is decided

29. AnnouncedSeptember2009 forexaminationfrom June2010

New Education Syllabus introduced to includepaper D5 (Ethics in the Workplace) in Diplomasyllabus, and paper P6 (The Ethical Professional)in the Professional Financial Accountant syllabus

Completed DirectorEducation,Examiners

Staff and Examiners

30. Ongoing Review of the IESBA Code of Ethics as changedto ensure compatibility of IFA Code of Ethics.

Ongoing DirectorEducation

Staff
http://www.ifa.org.uk/http://www.ifa.org.uk/http://www.ifa.org.uk/http://www.ifa.org.uk/


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SMO4 Start Date Actions CompletionDate


Review of IFAs Compliance information

31. Ongoing The IFA recognises the need for it to performperiodic reviews of responses to the IFACompliance Self-Assessment questionnaires, andto update sections relevant to each SMO. Itundertakes to inform IFAC Compliance staff,insofar as resources permit, about the updatesnecessary to enable re-publication of updatedinformation.


CEO, Director of ProfessionalStandards, Director ofEducation and supportingstaff


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Action Plan Subject: SMO 5 IPSAS and other PSASB GuidanceAction Plan Objective: N/A; IFA has no public sector members and does not propose to recruit in this area.

# Start Date Actions Completion

Date


Background

The IFA has no public sector members and does not propose to recruit in this area. The IFA complies with the requirements of the UK AccountingStandards Board.

Review of Organisations Compliance Information

4. Ongoing The IFA recognizes the need for it to perform periodicreviews of responses to the IFA Compliance Self-

Assessment questionnaires, and to update sectionsrelevant to each SMO. It undertakes to inform IFACCompliance staff, insofar as resources permit, aboutthe updates necessary to enable re-publication ofupdated information.


CEO, Director of ProfessionalStandards, Director of

Education and supportingstaff


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Action Plan Subject: SMO 6 Investigation and DisciplineAction Plan Objective: To use our best endeavours to bring the IFA into line with best disciplinary practice within as short a

timescale as possible, taking into account the resources available, enabling compliance with therequirements of SMO 6.



Background

The IFA is committed to an open and accountable regulatory system with procedures which are timely, seen to be fair and which are effective. TheIFA is at present operating a conduct system which aims to be fair and open, but which still needs to be reformed to align with best practicedevelopments. The ultimate aim is independence from the Institute.

Alignment of SMO recommendations with IFAs Bye- laws, Regulat ions and A rt ic les of Associat ion

32. 2010

onwards

Review and modify practice, Bye-laws, Regulations

and (where necessary) Articles of Association inaccordance with the recommendations of SMO 6

Completed Appointments

andGovernanceCommittee,

Council, staff

Director of Professional

Standards and supporting staff

33. 2011 Obtain Councils agreement to a Scheme ofDelegations to clarify and codify responsibilities.

2012 Appointmentsand

GovernanceCommittee,

Council

Chief Executive, CompanySecretary, Director ofProfessional Standards


34. 2012

onwards

Specifically, if agreed, to re-introduce an Investigatory

Committee, reform the Disciplinary Committee and toremove Council members from involvement (the latterwas agreed by Council June 2011)

By end of 2013 Appointments

andGovernanceCommittee,

Council, staff

Director of Professional


35. 2010onwards

To re-write the Disciplinary Rules to accommodate thenecessary changes (approved by Council and

Appointments and Governance Committee June2011). New Regulations published on IFA website.

Completed Staff Director of ProfessionalStandards and supporting staff

36. 2011 Provide information and guidance to members, theiremployers and clients on disciplinary processes, to

Ongoing Staff Director of ProfessionalStandards and supporting staff


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obtain transparency and accessibility, using the IFAswebsite and the Financial Accountant magazine

37. 2010

onwards

Liaise with other professional bodies and regulatory

bodies and if appropriate amend regulations to reflectchanges in the wider regulatory environment

Ongoing Staff Director of Professional


38. 2012 Recruit new members (including a significantproportion of lay members) to the Institutes conductcommittees, giving training as necessary

Ongoing Staff Director of ProfessionalStandards

39. 2012 Set a realistic and meaningful timeline for dealing withcomplaints and the disciplinary process.

2012 Staff Director of ProfessionalStandards

Review of the IFAs Compliance Information

40. Ongoing The IFA recognises the need for it to perform periodicreviews of responses to the IFA Compliance Self-

Assessment questionnaires, and to update sections

relevant to each SMO. It undertakes to inform IFACCompliance staff, insofar as resources permit, aboutthe updates necessary to enable re-publication ofupdated information.


Team

Director of ProfessionalStandards and supporting staff


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Action Plan Subject: SMO 7 (International Financial Reporting Standards)Action Plan Objective: The IFA expects its members to keep themselves up to date with IFRS, stimulated by appropriate

publicity and comment

# Start Date Actions CompletionDate Responsibility Resource

Background

UK Accounting Standards Board has the responsibility for setting the financial reporting standards in the United Kingdom.For more information please refer to the UK Accounting Standards Boards website http://www.frc.org.uk/asb/


41. Late 2010 All IFRSs are to be indexed on the IFA website.Material standards are reported through articles in thevarious e-newsletters available to members and the

IFA magazine Financial Accountant. The IFAsqualifications focus specifically on the IFRS forSMEs.

Ongoing Staff Staff, contracted out technicalservices to members(including ICAEW Library and

Information Service)

42. 2009 Introduction of the IFAs new IFRS Diploma foraccountants

Completed DirectorInternational,

DirectorEducation

Staff

43. 2010 Introduction of new syllabus including ProfessionalFinancial Accountant level P1 paper (Financial

Accounting and IFRS for Small & Medium SizeEnterprises (SMEs)).

Completed DirectorEducation and

Examiners

Staff and Examiners

44. Ongoing The IFA complies with the requirements of the UK

Accounting Standards Board

Ongoing Council, Senior

ManagementTeam

Staff

Review of the IFAs Compliance Information

34. Ongoing The IFA recognises the need for it to perform periodicreviews of responses to the IFA Compliance Self-

Assessment questionnaires, and to update sectionsrelevant to each SMO. It undertakes to inform IFACCompliance staff, insofar as resources permit, aboutthe updates necessary to enable re-publication ofupdated information.


Team

CEO, Director of ProfessionalStandards and supportingstaff


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