Reports on Observance of Standards and Codes
EXPERIMENTAL REPORT ON
March 15, 1999
Prepared by a staff team from European I, Fiscal Affairs, Monetary and Exchange Affairs, Policy Development and Review and Statistics Departments with the cooperation of the United Kingdom authorities
This report is one in a series of experimental studies aimed at considering how to present information on an economy's transparency practices and some of the standards that lie behind these practices.
1. There have been significant changes in the policy-making process in the United Kingdom in recent years. The objective of these changes has been to improve the substance of economic policy-making by:
2. The recent re-assignment of institutional responsibilities and the clarification in the objectives for fiscal, monetary and financial supervisory policies, are outcomes of this process. Efforts have also been made to enhance transparency in the policy process more generally by requiring that all legislation imposing new regulations on the private sector be accompanied by a Regulatory Impact Assessment, which is required to state the costs and benefits of the regulations and their impact on various sectors of the economy.
3. In the context of this experimental report, the staff have considered the authorities' practices against a set of internationally accepted standards. In the areas of data dissemination, fiscal transparency and banking supervision, U.K. practices have been considered primarily against the Fund's Special Data Dissemination Standard (SDDS), its Code of Good Practices on Fiscal Transparency, and the transparency aspects of the Basle Committee's Core Principles of Effective Banking Supervision.1 The report also considers the transparency practices in the area of monetary and financial policies, using the broad principles underlying the February, 1999, preliminary draft Code of Good Practices on Transparency of Monetary and Financial Policies. In addition, the report provides a summary of the authorities' views on the extent to which domestic practices are consistent with existing international standards in the areas of securities market regulation, insurance regulation, accounting and auditing, and describes how domestic standards are promulgated and enforced. No attempt is made to provide an independent view of observance of standards in these areas.
4. In the staff's view, the United Kingdom has made important strides in enhancing its transparency practices in several key areas of economic policy. While progress in this direction has been underway for some time, in recent years the agenda has been advanced substantially. As a result, the United Kingdom has achieved high levels of transparency in the four areas assessed here - data dissemination, fiscal, monetary and financial policy transparency, and the disclosure aspects of banking supervision.
5. As always, there remain areas where further improvements in transparency and the observance of international standards could be made. Specifically:
6. In addition, a key area under development is the impending legislative framework underpinning the regulatory arrangements for the financial sector. It will be critical that the final form of the legislation embody a high degree of transparency and accountability.
7. The United Kingdom subscribes to the Fund's Special Data Dissemination Standard (SDDS). The SDDS is a "best practice" standard against which a country's dissemination practices can be readily measured. It covers four sectors of the economy (real, fiscal, financial, and external), as well as population, and has four dimensions, i.e., the data dimension (the coverage, periodicity, and timeliness of the data); access by the public to those data; the integrity of the data; and the quality of the data.
8. This section provides an assessment of fiscal management practices in United Kingdom against the requirements of the IMF Code of Good Practices on Fiscal Transparency—Declaration on Principles. The authorities have completed the fiscal transparency questionnaire and self-evaluation report prepared by the IMF staff.7 The assessment has two parts. The first part is a description of practices, prepared by the IMF staff on the basis of the questionnaire response and the self-evaluation report. The second part is an IMF staff commentary on fiscal transparency in the United Kingdom.
9. Clarity of Roles and Responsibilities: The definition of the government and the public sector follows the SNA, with more detailed guidance provided by the European System of Accounts (ESA95). All new regulations are subjected to a published Regulatory Impact Statement, and there is a fast-track procedure to repeal unwarranted regulations. Arrangements for devolution to assemblies in Northern Ireland, Scotland, and Wales are almost complete, and are to include a clear legislative and administrative framework for the allocation of fiscal responsibilities to each assembly. The Bank of England has operational independence, there are no other significant public financial institutions, and nonfinancial public enterprises operate on a commercial basis (with the costs of noncommercial activities being compensated for and reflected in the budget). A strong framework for fiscal management is provided by the Code of Fiscal Stability (CFS), which was implemented in 1998. The CFS requires the government to set out how fiscal and debt management policy will be formulated and implemented. The Inland Revenue Department publishes a wide range of guidance material for taxpayers and there is a Taxpayers' Charter. The behavior of public servants is governed by the Civil Service Code.
10. Public Availability of Information: The CFS requires the government to produce a Pre-Budget Report (PBR), an Economic and Fiscal Strategy Report (EFSR), a Financial Statement and Budget Report (FSBR), and a Debt Management Report (DMR). The FSBR provides comprehensive coverage of the public sector. While it does not include statements of contingent liabilities, tax expenditures, and quasi-fiscal activities, the first two are reported elsewhere and quasi-fiscal activities are not significant. The above reports are published according to a regular cycle.
11. Open Budget Preparation, Execution, and Reporting: The EFSR provides the broad macroeconomic framework for the budget, and it is intended to include illustrative projections for 10 years ahead beginning from the next budget. Fiscal policy is guided by two rules—the golden rule and the debt rule—which are clearly explained.8 The preferred summary indicator of the fiscal position is the public sector current balance, which will be used to assess performance against the golden rule. The preferred summary indicator of fiscal stance is public sector net borrowing. Work is in progress to develop generational accounts, and the CFS requires the government to move to accrual accounting in the context of a more general shift to resource accounting and budgeting. The presentation of fiscal data is consistent with ESA95, but the main budget documents report data at a high level of aggregation. Accounting procedures and principles follow GAAP. Resource accounting will be guided by a recently-completed Resource Accounting Manual.
12. Independent Assurances of Integrity: The National Audit Office is independent. Macroeconomic assumptions are open to independent scrutiny, indeed the entire Treasury model is required by law to be published. The Office of National Statistics has technical independence and ways are being sought to further strengthen its position. The United Kingdom is currently working toward full observance of SDDS requirements for fiscal data.
13. In the context of strengthening the architecture of the international monetary system, the Interim Committee, in its April and October 1998 communiqués, called on the Fund to develop a code of transparency practices for monetary and financial policies, in cooperation with appropriate institutions. The Fund, in consultation with others, has prepared a draft Code of Good Practices on Transparency in Monetary and Financial Policies.9
14. The following considers the transparency practices of U.K. monetary and financial policy frameworks as they relate to the broad principles underlying the Fund's draft Code based on information provided by, and discussions with, the authorities at the time of the 1998 Article IV Consultation.
15. Clarity of roles and responsibilities: Recent changes to institutional arrangements have contributed to enhanced clarity of roles and a clearer assignment of responsibilities although some uncertainties remain pending the outcome of the legislative process. The Bank of England Act 1998, clearly defines the Bank's operational responsibility for monetary policy. The Act also transfers the BoE's supervisory responsibilities to the newly formed Financial Services Authority (FSA). While already functioning, the legal basis for the FSA will remain uncertain until the passage of the Financial Services and Markets Bill (to be introduced into Parliament later this year). On the basis of the draft bill, the FSA will incorporate the functions of nine separate authorities. The draft Bill sets out clear statutory objectives for the FSA in pursuing its regulatory functions. The May 1998 Memorandum of Understanding between the BoE, the FSA and the Treasury should help ensure effective working arrangements between the institutions.
16. Open process for formulating and reporting of monetary and financial policies: The BoE's Monetary Policy Committee (MPC), the policy making body, meets monthly with minutes of meetings being published within two weeks. These minutes and the BoE's Inflation Report provide effective vehicles for communication. The draft Bill requires the FSA to consult on (and publish cost/benefit analyses of) all new rules and for these to be published. The FSA may also be required to publish policies in other areas such as enforcement procedures and penalties.
17. Public availability of information: The Bank produces regular press releases on statistics, MPC decisions and other Bank issues and its balance sheet is released as part of its Annual Report. U.K. official holdings of foreign currency and gold are published monthly in consultation with the Treasury. The Bank and the FSA both have a public web site. The FSA is required to publish and consult on its budget and fees proposals.
18. Accountability and assurance of integrity by the central bank and financial supervisory agency: The Chancellor of the Exchequer, who is accountable to Parliament, has overall responsibility for the monetary policy framework and sets the inflation target. The Bank sets interest rates to achieve the target. The Governor of the Bank and other members of the MPC regularly appear before the House of Commons' Treasury Select Committee. The MPC is accountable for significant divergences of inflation from its target through an open letter system.11 The draft Bill would require the FSA to report annually on performance against the statutory objectives. Other accountability provisions in the draft Bill include non-executive members of the FSA Board being required to report on the efficiency of its operations; the consultation arrangements required on new rules; the formation of consumer and practitioner panels; and scope for the Treasury to commission periodic "value for money" audits. Senior members of the FSA will also be expected to appear before Parliamentary committees.
19. The Basle Committee on Banking Supervision (Basle Committee) prepared the Core Principles for Effective Banking Supervision (Core Principles) in order to strengthen national financial market supervision and stability.12 Intended to serve as a basic reference and minimum standards for supervisory and other public authorities in countries generally and internationally, the Core Principles address the major dimensions of banking sector supervision: preconditions for effective supervision; licensing process and approval for changes in structure; prudential regulations and requirements; methods of ongoing banking supervision; information requirements; formal powers of supervisors; and, cross-border banking.
20. An assessment of U.K. practices against the full set of 25 Basle Core Principles is outside the scope of this study. Instead, this section focuses on the transparency aspects of the Core Principles. The staff's commentary is based on consideration of a questionnaire completed by the authorities and discussion with the authorities at the time of the 1998 Article IV Consultation.
21. The Financial Supervisory Authority (FSA) has been established to bring together in one agency responsibility for the authorization and supervision of all providers of financial services14 It can autonomously issue prudential regulations under powers delegated to it by Parliament. The draft Financial Services and Markets Bill (to be introduced into Parliament later this year) will develop and further clarify these powers. The income of the FSA comes from the institutions it supervises.
22. Legal framework: An effective legal basis for financial sector regulation and super- vision already exists in the United Kingdom, relevant laws and regulations are effectively implemented, and the legal framework does not hinder the conclusion or enforcement of loan contracts. The UK approach can be characterized as allowing a considerable degree of discretion to the supervisory authorities. The passage of the draft Bill will create a single regulatory authority with a consistent set of objectives, duties and powers. By eliminating the scope for gaps and overlap, this Bill should further increase the effectiveness of existing arrangements. Under the present and proposed arrangements, should certain prudential standards be breached, the FSA must by law consider what action to take to remedy or mitigate the situation but, in most cases, the law gives the FSA considerable freedom to ensure that the response fits the need. In order to ensure accountability for these powers, the new legislative framework will require widespread consultation on regulations and detailed guidelines. In addition, the laws and regulations provide to affected parties the right of referral against supervisory decisions to an independent tribunal. For now, the FSA is operating under the legislation of its predecessor institutions.
23. Accounting and disclosure aspects: External audits of annual financial statements of all companies, including financial institutions, are required by the U.K. Companies Act; however, this requirement does not apply to banks incorporated outside the United Kingdom which are subject to the legal requirements ruling in the country where they are registered. The appointment of a bank's external auditor does not require supervisory approval, but the appointment of its reporting accountants (usually the same firm) does. The external auditor is obliged to inform the FSA of matters relevant to effective supervision or the auditor's ability to issue a "clean" opinion.
24. Compliance with U.K. accounting standards is required.15 Regular publication of balance sheets, profit and loss statement, notes to the account, and auditor's statement is required by U.K. law. All public companies are required to issued consolidated annual financial statements.
25. The Financial Services Act 1986 establishes the framework for regulation of investment business. While this Act vests in the Treasury overall responsibility for ensuring its implementation, it also provides for delegation of most operational responsibilities, and the majority of these now rest with the Financial Services Authority (FSA).
26. The Financial Services and Markets Bill, issued in draft and to be introduced to Parliament later this year, proposes to consolidate the power and responsibilities of the FSA by amalgamating banking, insurance and investment business regulation under its authority as a single regulator.
27. The FSA is directly accountable to the Chancellor of the Exchequer, but the Chairman and other senior representatives will also appear, as required, before the Treasury Committee of the House of Commons.Attitude to international standards and cooperation
28. The FSA endorsed the International Organization of Securities Commissions' (IOSCO) standards, Objectives and Principles of Securities Regulation and Cross-Border Offerings and Initial Listings by Foreign Issuers, in September 199817.
29. Investment business regulation is already required to be carried out in the UK to the level of these standards. However, checking that this is the case, and making necessary adjustments where appropriate, is one of the FSA's priority areas for 1999 (FSA is a member of IOSCO's implementation task force). The standard on Cross-Border Offerings will be implemented by amending the Listing Rules of the London Stock Exchange as appropriate. Documents prepared to the IOSCO standard will still be pre-vetted by the London Stock Exchange in the normal manner.
30. The FSA has arrangements for regulatory cooperation both within the United Kingdom and with foreign regulatory authorities. It has endorsed the principal international information-sharing agreements and resolutions, and signed Memoranda of Understanding (MOU) with many foreign counterparts. The U.K. authorities administer legal powers to obtain information on a compulsory basis for foreign regulators when there is no breach of rule or law in the United Kingdom.Pending Changes
31. The proposed Financial Services and Markets Bill will set up a single statutory regulator, the Financial Services Authority, which will be responsible for the regulation of banking, insurance and investment business. The FSA will replace the current self-regulatory organizations.
32. On the markets side, the new Bill will continue to provide for the recognition and exemption of clearing houses and investment exchanges (such as the London Stock Exchange) provided they meet a number of statutory requirements.
33. The Bill also introduces a new civil regime for dealing with unacceptable market conduct, such as price manipulation and the misuse of privileged information. This regime will complement, not replace, the existing criminal offences of insider dealing and market manipulation. Its aim is to protect the efficiency and integrity of markets. The FSA will be given powers to investigate and impose administrative fines on those whose conduct has fallen short of the required standards. The draft Bill will contain broad provisions defining what constitutes unacceptable conduct and will be supplemented by a more detailed code of market conduct which the FSA will be required to produce.
34. The current framework for regulation of insurance companies is established by the Insurance Companies Act 1982. While this Act vests in the Treasury overall responsibility for supervision of insurance activities, most day-to-day operational responsibilities have been delegated to the Financial Supervisory Authority (FSA).
35. As noted above, the Financial Services and Markets Bill, to be introduced into Parliament later this year, would amalgamate authority for banking, insurance and investment regulation and supervision under the power and responsibilities of the FSA.
36. The FSA is directly accountable to the Chancellor, but the Chairman and other senior representatives also appear, as required, before the Treasury Committee of the House of Commons.Observance of international principles and standards in insurance regulation
37. During 1998, the United Kingdom conducted a self-assessment of its observance of the International Association of Insurance Supervisors' (IAIS) Insurance Supervisory Principles (September 1997). The U.K. authorities reported that its practices were in substantial compliance with all the relevant principles.
38. The U.K. authorities also seek to comply with the provisions of the IAIS' Principles Applicable to the Supervision of International Insurers and Insurance groups and their Cross-Border Establishments (September 1997).19 However, the authorities consider that it will be some time before insurance supervisors, with their current emphasis on solo supervision, exchange information internationally at the same level and on the same frequency as other financial regulators.
39. The United Kingdom endorses the principles outlined in the IAIS' Supervisory Standard on Licensing (October 1998), and considers that its application goes beyond the standard's requirement in a number of areas, for example, in relation to the assessment of the capital required for a license. These licensing requirements are also applied to pure re-insurers.
40. The United Kingdom takes a different approach to verifying data and information than set out in the IAIS' Supervisory Standard on On-Site Inspection (October 1998). Although the U.K. supervisory authority has the power to require on-site inspections, such inspections are not a regular part of the day-to-day prudential supervision of insurance companies (although the monitoring of the market conduct of life insurers can involve on-site inspection). Insurance companies are required to provide an annual audited return to the supervisory authority, which is separate from the accounts to shareholders but is similarly placed on public record. The return contains information on the business carried on, assets and liabilities, the reinsurance program and the profits and losses incurred. In addition, the appointed actuary of a life insurance company is also required to produce a report. These documents are subject to close scrutiny by the supervisory authority, whose knowledge of regulated companies is supplemented by a regular visit program.
41. The United Kingdom considers that it fully complies with the IAIS' Supervisory Standard on Derivatives (October 1998), which sets out risk management controls for insurers active in derivatives and a reporting framework that can be applied across a full range of potential derivative activities. The standard recognizes that supervisory approaches to derivatives are evolving in response to developments on the market and provides guidance to supervisors in assessing how insurers control risks in derivatives.
42. The IAIS has also issued Guidance on Insurance Regulation and Supervision for Emerging Market Economies (September 1997) and a model memorandum of understanding (MOU) designed to facilitate co-operation and the exchange of information between regulatory bodies. The guidance paper is not directly applicable in the case of the United Kingdom. With regard to the development of information exchange, the U.K. authorities are considering MOU with jurisdictions in which U.K. insurers are particularly active.
Setting accounting standards in the United Kingdom
43. Accounting standards are set by the Accounting Standards Board (ASB), an independent body that became operational in 1990; these standards are known as Financial Reporting Standards (FRSs).21 The ASB is also developing a Statement of Principles for Financial Reporting to provide a framework in which standards can be established.
44. The accounting and disclosure requirements of accounting standards, together with those of the Companies Acts, the Stock Exchange Listing Rules (for listed companies), and other statements from the ASB and other professional bodies form the main components of what is known as U.K. Generally Accepted Accounting Practice (GAAP).The ASB's policy towards international accounting standard setting
45. The ASB's accounting standards (FRSs) are the United Kingdom's vehicle for implementing International Accounting Standards (IASs).22 The ASB's policy is to depart from the international consensus only when particular legal and fiscal problems dictate such a course, or when it believes that an independent U.K. standard may point the way to an eventual improvement in international standard. In practice, the ASB plays a role in the development of IASs.23
46. The ASB considers that in some respects its FRSs go beyond the requirements of the IAS, including in the following areas:
Other differences arise on such issues as treatment of goodwill, pensions and deferred tax. 24
47. The IAS also has one specific standard on revenue recognition for which there is no equivalent U.K. standard. However, this difference is unlikely to be material as requirements for revenue recognition are contained in other U.K. standards.Promulgation and enforcement of standards
48. Under the U.K. Companies Act, the accounting requirements of which are largely based on the EU Fourth and Seventh Company Law Directives, annual accounts are required to give a true and fair view. In turn, compliance with ASB accounting standards is required as part of the achievement of such a view.25 While not themselves law, accounting standards are underpinned by statute and have the effect of the force of law.
49. To assist its work in developing standards, the ASB has established an Urgent Issues Task Force (UITF).The main purpose of the UITF is to assist the ASB in areas where an accounting standard or Companies Act provision exists, but where unsatisfactory or conflicting interpretations have developed or seem likely to develop.
50. Enforcement of standards occurs through the U.K. Financial Reporting Review Panel, which is authorized by the Secretary of State for Trade and Industry to examine material departures from the accounting requirements of the Companies Act, including departures from the requirements of accounting standards. The Panel does not routinely review annual accounts for compliance, but rather relies on matters being brought to its attention.
Setting auditing standards in the UK
51. Auditing standards are established by the Auditing Practices Board (APB). The APB was established in 1991, as a committee of the Consultative Committee of Accountancy Bodies (CCAB), whose members are the main accountancy bodies in the United Kingdom and the Republic of Ireland.27 28
52. The role of the APB is not explicitly recognized in legislation and its pronouncements do not have any statutory authority. However, the Companies Act 1989 requires that the recognized supervisory bodies29 must have rules and practices as to the technical standards to be applied in company audit work and that these must be adhered to by registered auditors.
53. The accountancy bodies, which are members of the CCAB, have undertaken to adopt and promulgate all auditing standards and guidance issued by the APB as requirements for their members. Failure to follow a requirement established by the APB can result in disciplinary action by the professional body to which the auditor belongs. Non-compliance by a registered auditor with an APB requirement in the course of an audit may lead to regulatory action and, in extreme cases, withdrawal of registration to act as a company auditor. Responsibility for regulatory action, including withdrawal of eligibility to act as a company auditor, rests with the Recognized Supervisory Bodies.
54. Pronouncements of the APB are of several types:
Relationship between SASs and international standards
55. The APB's terms of reference provide for it to maintain close links with the International Auditing Practices Committee (IAPC)30, the auditing profession in Europe and throughout the world. The APB represents the United Kingdom on the IAPC.
56. It is an objective of the APB that its SASs are consistent with the IAPC's International Standards on Auditing (ISAs); however, this is not an absolute constraint and the APB assesses the appropriateness of each ISA in the context of the United Kingdom and the Republic of Ireland. Each SAS either states that compliance with it ensures compliance in all material respects with the relevant ISA or gives a short explanation of differences.
57. The APB has benchmarked its standards against ISAs. Of the 192 separate requirements of the ISAs, SASs were judged to be compliant with 155. In the APB's view, most of the 37 exceptions reflect points of emphasis rather than substance, and in some cases variations reflected a different approach it consciously adopted to achieve the same objective as the ISAs.
1An assessment of the U.K. practices against the full set of 25 Basle Core Principles is beyond the scope of this report.
2Transition plans are submitted by SDDS subscribers outlining the steps to be taken with respect to statistical practices for a particular data category in order to come into observance of the SDDS requirements for that category.
3A flexibility option allows a subscriber to disseminate data with lower frequency (periodicity) or with greater lag (timeliness), or both, than prescribed for the data category under the SDDS. The SDDS allows all subscribers two flexibility options on an ongoing basis. The Executive Board of the IMF has agreed to provide subscribers with an additional temporary flexibility option to smooth transition to the observance of the SDDS. This temporary option expires at the end of 1999.
4The prescribed components for central government operations are: revenue; expenditure; the deficit/surplus (balance); and an appropriate breakdown of financing.
6General government operations cover the operations of central government and the local governments. The prescribed components are the same as those for central government operations, namely: revenue, expenditure, deficit/surplus and an appropriate breakdown of financing.
7The blank questionnaire and self-evaluation report are available on the IMF external web site (http://www.imf.org/external/np/fad/trans/index.htm). The United Kingdom authorities have published their completed self-evaluation report on the Treasury web site (http://www.hm-treasury.gov.uk).
8The Golden Rule requires that, on average over-the-cycle, the government will borrow only to finance investment. The Sustainable Investment (or debt) Rule requires that net public debt be kept at a stable and prudent level over the cycle. The latter rule is interpreted to imply that net debt will be kept below 40 percent of GDP over the economic cycle.
9See the preliminary draft Code of Good Practices on Transparency of Monetary and Financial Policies as set out in Making Transparency Transparent: An Australian Assessment (http://www.treasury.gov.au). This draft is in the process of being revised.
10This section has been prepared by Fund staff on the basis of information provided by the authorities.
11If inflation is more than 1 percentage point higher or lower than the target an open letter will be sent by the Governor to the Chancellor so that the public is fully informed as to why the divergences has occurred; the policy action being taken to deal with it; the period within which inflation is expected to return to the target; and how this approach meets the Government's monetary policy objectives.
12For more information, see the BIS web site at http://www.bis.org/.
13This section has been prepared by Fund staff on the basis of information provided by the authorities.
14With the passage of the Bank of England Act 1998, the Bank no longer has supervisory responsibilities.
15See Section VIII on the relationship of U.K., standards to international accounting standards.
16This represents a summary of the authorities' description of practices in this area. no attempt has been made to provide an independent view of observance of standards in this area.
17 For more information on these standards see the IOSCO web site at http://www2.iosco.org/.
18 This represents a summary of the authorities' description of practices in this area. no attempt has been made to provide an independent view of observance of standards in this area.
19These principles are also referred to as the Insurance Concordat, which is broadly based on similar work by the Basle Committee for Banking Supervision. The Concordat sets out guiding principles for the supervision of cross-border establishments and considers aids to co-operation, particularly the needs of home and host supervisors; confidentiality constraints on the exchange of information; and the role of external audit.
20This represents a summary of the authorities' description of practices in this area. no attempt has been made to provide an independent view of observance of standards in this area.
21 The ASB's status as an accounting standard setter has been prescribed by statutory instrument under the Companies Act 1985. The ASB's work is overseen by the Financial Reporting Council (FRC), which makes appointments to the Board and ensures that its activities are adequately funded.
22For more information about IASs see the web site at http://www.iasb.org.
23For example, a joint project for the ASB and IASC led to the issue of FRS12 Provisions, Contingent Liabilities and Contingent Assets in the United Kingdom at the same time as IAS37 Provisions, Contingent Liabilities and Contingent Assets; the requirements of these are substantially the same.
24While a standard-by-standard comparison between U.K. standards and IASs is beyond the scope of this report, each FRS issued by the ASB contains an appendix on the compliance of the provisions of that standard with IASs. In addition, comparisons between U.K. standards and IASs can be found in several private publications. See, for example, PricewaterhouseCoopers' Manual of Accounting: The Guide to UK Accounting Law and Practice; Ernst and Young's U.K. GAAP: Generally Accepted Accounting Practice in the United Kingdom; PricewaterhouseCoopers' International Accounting Standards - Similarities and Differences: IAS, U.S. GAAP and U.K. GAAP.
25 There are accounting and filing exemptions for certain small and medium sized companies but their annual accounts sent to shareholders still must comply with the requirement to give a true and fair view.
26 This represents a summary of the authorities' description of practices in this area. no attempt has been made to provide an independent view of observance of standards in this area.
27 These consist of the Institute of Chartered Accountants in England and Wales (ICAEW); The Institute of Chartered Accountants of Scotland (ICAS); The Institute of Chartered Accountants in Ireland (ICAI); The Association of Chartered Certified Accountants (ACCA); The Chartered Institute of Management Accountants (CIMA); and The Chartered Institute of Public Finance and Accountancy (CIPFA).
28The U.K. Government is currently considering proposals that, as part of an overall framework for regulation of the accountancy profession, the APB should be independent of the main accountancy bodies and of Government and be owned by a Foundation representing major users of audited financial statements.
29 These principally comprise the ICAEW, ICAS, ICAI and ACCA.
30More information on IAPC and the International Standards on Auditing (ISAs) is available at http://www.ifac.org/.