In a scathing response to the consultation document, it says that the proposals reflect neither the policy objectives set out in 2010 nor the intentions of a proportionate regime. “ICAEW is therefore unable to support this consultation (including the four sets of draft regulations) in its entirety,” it adds.
“In our view, the regulations in relation to smaller local bodies need a complete rewrite. The regulations and commentary are confusing and lack clarity in many aspects of the suggested framework for smaller bodies. ICAEW is of the view that the consultation should not have been published in this form.”
It expresses disappointment that the working group drafting the proposals for the regime has chosen to ignore this view – which was voiced by a number of stakeholders both at meetings and in emails.
ICAEW also takes the group to task over the brevity of the consultation period which was just four weeks long. “Given the tight timescales and the poor drafting of the consultation and regulations, we are only providing high-level comment on key issues which we have identified.
"We would have provided further, more detailed and considered comments on all the regulations and proposals if the consultation had been fit for purpose and if we had more time within which to consult with our member firms and provide a more detailed response.”
As the ICAEW sees it, the problem is that the civil servants have failed to understand the differences between an audit and an assurance engagement, the terminology around the types of bodies, the role of the specified person and the monitoring regime.
“If a professional accountancy body such as ICAEW is unable to understand these regulations and make sense of them, we have concerns about the ability of approximately 10,000 smaller public bodies to not only understand them but apply the requirements properly,” ICAEW adds.
“As it is we would not recommend any of our member firms take this work on as the risks are too great for any benefit that they might receive from doing this work.”