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Indeed, it is more than essential, it is compulsory. It is there to ensure that firms main-
tain their competence to do audit work and maintain the high professional standards
expected of firms of chartered accountants.
Principals and employees must keep up-to-date with changes in company law, ac-
counting and auditing standards, etc.
The amount of CPE is not expressed as an absolute total, but a target of 150 points.
One point is given for each "unstructured" hour of CPE (e.g. reading) and three points
for each "structured" hour (e.g. course attendance). Of the target of 150 at least
60 points should be structured activities. For auditors, half those amounts (i.e. 75 points
of total and 30 points of structured education) should be audit-related. Thirty structured
CPE points is, for example, 10 hours of course attendance.
The current system of CPE has been in place since 1991. There are no exemptions
due to the age of the practitioner or the volume of audit work undertaken.
The ARCs accept that in any particular year the targets may not be met. It is important
that auditing firms should take a conscientious approach to CPE. However, the ARCs are
becoming increasingly concerned about firms who have done little, if any, CPE.
In the Committees' view there is a wealth of CPE available. Courses are run by the
institutes, district societies and commercial training organizations. There should be no
excuse for not doing CPE. Firms should be aware that ARCs will take a firm line with
firms who do inadequate CPE.
Exercise 14.
a) Read through the text for general information.
b) Read the text more carefully and pick out information about the JMU.
The EU 8
th
Company Law Directive set out the requirements for each member
state to have a common minimum regulatory system for auditors of limited compa-
nies. The United Kingdom enacted this through the Companies Act 1989 and added
a requirement for monitoring. Since 1 October 1991, a firm must be a Registered Au-
ditor to conduct company audit work.
In 1990 the Department of Trade and Industry granted the status of Recognized
Supervisory Body to ICAEW, ICAS and ICAI, thus allowing these institutes to regis-
ter and regulate Registered Auditors.
Specifically, this work is done by Audit Registration Committees which register
auditors and then organize monitoring.
Monitoring is conducted on behalf of the Institutes by the Joint Monitoring Unit,
which was set up in 1987 to monitor the compliance of firms authorized to conduct
investment business and whose role was extended in 1991 to include monitoring
the work of Registered Auditors.
The monitoring activities of the JMU involve:
– issuing and reviewing firms' Annual Returns,
– conducting visits to firms,
– reporting the results of visits to the ARCs. Activities of the JMU aim to as-
sess whether or not the firm has complied with Audit Regulations and Standards.
The JMU seeks to assist firms by making practical suggestions for improvements
of their audit performance.
37
Indeed, it is more than essential, it is compulsory. It is there to ensure that firms main-
tain their competence to do audit work and maintain the high professional standards
expected of firms of chartered accountants.
Principals and employees must keep up-to-date with changes in company law, ac-
counting and auditing standards, etc.
The amount of CPE is not expressed as an absolute total, but a target of 150 points.
One point is given for each "unstructured" hour of CPE (e.g. reading) and three points
for each "structured" hour (e.g. course attendance). Of the target of 150 at least
60 points should be structured activities. For auditors, half those amounts (i.e. 75 points
of total and 30 points of structured education) should be audit-related. Thirty structured
CPE points is, for example, 10 hours of course attendance.
The current system of CPE has been in place since 1991. There are no exemptions
due to the age of the practitioner or the volume of audit work undertaken.
The ARCs accept that in any particular year the targets may not be met. It is important
that auditing firms should take a conscientious approach to CPE. However, the ARCs are
becoming increasingly concerned about firms who have done little, if any, CPE.
In the Committees' view there is a wealth of CPE available. Courses are run by the
institutes, district societies and commercial training organizations. There should be no
excuse for not doing CPE. Firms should be aware that ARCs will take a firm line with
firms who do inadequate CPE.
Exercise 14.
a) Read through the text for general information.
b) Read the text more carefully and pick out information about the JMU.
The EU 8th Company Law Directive set out the requirements for each member
state to have a common minimum regulatory system for auditors of limited compa-
nies. The United Kingdom enacted this through the Companies Act 1989 and added
a requirement for monitoring. Since 1 October 1991, a firm must be a Registered Au-
ditor to conduct company audit work.
In 1990 the Department of Trade and Industry granted the status of Recognized
Supervisory Body to ICAEW, ICAS and ICAI, thus allowing these institutes to regis-
ter and regulate Registered Auditors.
Specifically, this work is done by Audit Registration Committees which register
auditors and then organize monitoring.
Monitoring is conducted on behalf of the Institutes by the Joint Monitoring Unit,
which was set up in 1987 to monitor the compliance of firms authorized to conduct
investment business and whose role was extended in 1991 to include monitoring
the work of Registered Auditors.
The monitoring activities of the JMU involve:
– issuing and reviewing firms' Annual Returns,
– conducting visits to firms,
– reporting the results of visits to the ARCs. Activities of the JMU aim to as-
sess whether or not the firm has complied with Audit Regulations and Standards.
The JMU seeks to assist firms by making practical suggestions for improvements
of their audit performance.
37
