Mobility across national frontiers is key to ACCA's offering as a global professional accountancy qualification both in Europe and the rest of the world. ACCA therefore welcomes any moves to lift barriers to mobility. ACCA promotes international standards such as IFRS, ISAs, and IFAC's IES and Code of Ethics as necessary for the mobility of the profession.
ACCA warmly welcomes the European Commission's consultation aimed at re-engineering the Professional Qualifications Directive (MRD). The MRD is well aligned with ACCA's mission to provide opportunity and mobility to our members and has our full support. It has been relatively successful in helping the mobility of professionally qualified accountants by providing a system of recognition that has been particularly useful for individuals and competent authorities. While there are some obstacles to mobility that are outside the scope of the MRD, for example in Member States where accountancy is not regulated, there are some areas where improvement is needed.
THE FIRST CHALLENGE: SIMPLIFICATION FOR INDIVIDUAL CITIZENS
The MRD has been relatively successful for individuals within accountancy and audit. The recent Eurobarometer report stated that only 4% of individuals who apply are concerned about their qualification not being recognised. The development of the IMI system has been useful for processing recognition requests, although improvements could be made to improve the reliability and speed of this process. The MRD is clearer for auditors as a result of the 8th Directive.
The large number of professions covered by the MRD is a challenge in itself for simplification. There is a need to be a realistic about how simplistic the process could be.
The maintenance of professional competences is important within different professions and to simplify and embed these within the MRD could prove challenging.
THE SECOND CHALLENGE: INTEGRATING PROFESSIONS INTO THE SINGLE MARKET
There are benefits to having a professional passport or card but issues around administration and cost will present major obstacles to the implementation of this. There is also an issue centred on integrity of information over time that will need solutions to make it an effective tool for integrating professions. Many members of professional bodies, such as ACCA, have a certificate of membership that provides the same information (IFAC body, IESs).
Common platforms have been tried in the past without great success, one of the reasons being that detailed curricula are not suitable for statutory backing. They take many years to construct, are difficult to reach consensus on, difficult to update and difficult to enforce. Furthermore, if only a self-selected group of bodies agrees them this would impede mobility rather than enhance it. Common platforms in trying to overcome similar challenges across different professions, where regulated and unregulated activities are diverse, could end up being more restrictive than current arrangements.
ACCA believes that the 8th Directive and the IFAC IESs already provide a suitable common framework for the accountancy and audit professions.
THE THIRD CHALLENGE: INJECTING CONFIDENCE INTO THE SYSTEM
Promoting of the European Qualifications Framework as a tool for information exchange and qualification recognition would be one effective way to inject confidence.
Eliminating dangers of validation of e-data/information is necessary for users to be confident.
Question 1: Do you have any suggestions for further improving citizen's access to information on the recognition processes for their professional qualification in another Member State?
(1) The IMI system has smoothed the exchange of information between competent authorities. However, the database is slow, crashes frequently and it is not always easy to find the competent authority for each profession. For example, it's possible to find competent authorities for audit but not for accountancy. In some cases when going from a regulated to a non-regulated member state, there is no equivalent professional body which makes it difficult to understand the structure of the profession in the member state. More resource on the structure of the professions in different member states would be useful. For example, the Fédération des Experts comptables Européens (FEE) produced an overview of the profession over ten years ago which they have said they plan to update.
(2) Single points of contact under the Services Directive have facilitated the provision and exchange of information and could be further developed. Perhaps the development of a European point of contact for each profession could be helpful but only if implemented effectively.
Question 2: Do you have any suggestions for the simplification of the current Recognition procedures? If so, please provide suggestions with supporting evidence.
(3) The current system works well in our opinion. The process is not cumbersome and the competent authorities do share information on member, training, qualifications and so forth.
Making best practice enforceable
Question 3: Should the Code of Conduct become enforceable? Is there a need to amend the contents of the Code of Conduct? Please specify and provide the reasons for your suggestions.
(4) There are a number of issues with trying to enforce the Code of Conduct and it is not clear how legal frameworks would permit it. More promotion of best practice might be a more helpful way to proceed.
Mitigating unintended consequences of compensation measures
Question 4: Do you have any experience of compensation measures? Do you consider that they could have a deterrent effect, for example as regards the three years duration of an adaptation period?
(5) Accountancy is not regulated in the UK and in many Member States. As such compensation measures are not required for someone to be an accountant, but are necessary where applying for membership to a professional body who need to ensure competence in local tax and law and language skills are proficient to meet requirements for the profession.
(6) In statutory audit it has been simplified, the aptitude test is required and there is no choice for an adaptation period.
(7) Although there are a variety of aptitude tests across Member States they are not in themselves a barrier to mobility. The main deterrent has been knowledge of local Tax and Law and the requirement to take the examination in the local language. Although there could be some standardisation of aptitude tests and their administration, such as duration, format etc., this may not improve mobility significantly but would inject confidence into the MRD by means of consistency.
Question 5: Do you support the idea of developing Europe-wide codes of conduct on aptitude tests or adaptation periods?
(8) ACCA supports clear communication and clarity on the aptitude tests or adaptation periods required within different member states but we do not support the notion of developing a common approach and adopting a code of conduct.
(9) When applying for membership of a professional body - that body should maintain control of its aptitude test to ensure candidates can meet the required professional competencies.
Question 6: Do you see a need to include the case-law on "partial access" into the Directive? Under what conditions could a professional who received "partial access" acquire full access?
(10) In accountancy, many member states are non-regulated and therefore partial access is not needed. The inclusion of the case-law on "partial access" would not add value.
(11) Statutory audit is covered under the 8th Directive.
Facilitating movement of new graduates
Question 7: Do you consider it important to facilitate mobility for graduates who are not yet fully qualified professionals and who seek access to a remunerated traineeship or supervised practice in another Member State? Do you have any suggestions? Please be specific in your reasons.
(12) Facilitating mobility for over 500,000 students and members of ACCA is core to ACCA's mission. ACCA considers it important to facilitate mobility for graduates who are not yet fully qualified professionals and who seek access to a renumerated traineeship or supervised practice in another member state.
(13) The UK currently recognises particular member states as providing equivalent practical experience in audit, however this does not extend to all member states which creates a barrier to mobility.
(14) The accountancy profession allows free movement of students and members among Member States and provides opportunities for valuable experience.
Question 8: How should the home Member State proceed in case the professional wishes to return after a supervised practice in another Member State? Please be specific in your reasons.
(15) New graduates and fully qualified members currently face difficulties with mobility when trying to have their experience recognised in another member state. The main obstacle within the UK is that the UK regulators will only accept experience from within a limited number of designated member states that it considers to offer audit experience equivalent to that obtained within the UK. Those members working within a member state not within this prescribed list are prevented from practising within the UK. Such a restriction is contrary to the spirit of this directive.
Facilitating movement between non-regulating and regulating Member States
Question 9: To which extent has the requirement of two years of professional experience become a barrier to accessing a profession where mobility across many Member States in Europe is vital? Please be specific in your reasons.
(16) Two years of professional experience is not a barrier to accessing the profession.
Question 10: How could the concept of "regulated education" be better used in the interest of consumers? If such education is not specifically geared to a given profession could a minimum list of relevant competences attested by a home Member State be a way forward?
(17) For statutory audit, it is not applicable.
(18) Accountancy services are mainly unregulated in most Member States and therefore outside the scope of the MRD. Qualified accountants, who are members of a professional institute, have market recognition to employers who are looking for verification of a standard of competencies. Promotion of membership would be a valuable strategy for the profession.
(19) IFAC's authoritative IESs maintain clear understanding of what is required in terms of education and training and operates globally on this basis as a signpost to consumers.
A European Professional Card
Question 11: What are your views about the objectives of a European professional card? Should such a card speed up the recognition process? Should it increase transparency for consumers and employers? Should it enhance confidence and forge closer cooperation between a home and a host Member State?
(20) There is some potential for a European professional card for easing recognition procedures. A Certificate of Membership of a professional body such as ACCA gives proof of qualification and training undertaken and that a high-level of competency has been achieved. If this information could be reliably displayed on the card, this may help speed the process of verification. Verification would be paramount and it is not clear as of yet, who would 'own' the professional card. Is it the responsibility of the individual or professional body to ensure validity of data within it? If it is binding on the competent authority - how would they ensure it was used appropriately? How or who would monitor its use? What information would be on the card that is relevant for all professions? These are only some questions that would need to be addressed in exploring the introduction of a professional card.
(21) It would require setting up processes for a low number or migrants as this would be offered on demand.
(22) IMI, as previously noted, has been successful in facilitating exchange of information between competent authorities but a professional card would not remove the difficulty of identifying the competent authority or an equivalent body in another Member State.
Question 12: Do you agree with the proposed features of the card?
(23) We agree with the features of the card but questions around implementation need to be addressed with mechanisms put in place to ensure the integrity and security of information. It could be issued by competent authorities but the small number of migrants requiring this would make it not cost-effective.
- It could be an instrument focusing on interested migrating professionals. A professional could receive such a card only if he wishes to. However, once issued, the card should be binding on competent authorities.
- It could be open to all interested professionals, even if they come from a Member State where the profession is not regulated and wish to move to a Member State where it is.
Competent authorities need to be able to verify information and easily check on the status of a professional moving from one Member State to another, especially in cases where the move is to a Member State that is regulated.
- It could be issued by the competent authority in the home Member State of the professional, i.e. the Member State of establishment or the Member State awarding the qualifications. This authority is best placed to assess and certify the qualifications of the professional. This could even be applied in situations were the home Member State does not regulate a profession but the host Member State does.
Agreed but in the case where a professional moves to a regulated from a non-regulated state, there will need to be adequate information provided on the card for the host Member State to assess a professional's training and qualification including experience.
- It could primarily facilitate the temporary mobility of professionals (freedom to provide services) replacing the current cumbersome declaration regime.
Agreed. If a professional card were to allow the necessary checks with other competent authorities before giving membership than it would make the declaration regime redundant. However, it might be useful to maintain the regime for a period of time until full confidence is earned.
- It could also further simplify the recognition procedure in the context of establishment. It could speed up the automatic recognition process for certain professions, bringing the current three month period for assessing qualifications down to one month or two weeks. It could also speed up the case by case recognition process (under the so-called "general system"), notably by facilitating the transmission and translation of documents.
- It could be supported by the electronic exchange of information between Member States. It should be a mechanism which already works and in which Member States' competent authorities have already put their trust, such as the Internal Market Information System (IMI). A competent authority could hence only issue such a card if it is registered with IMI and could fully engage in a continuous information exchange with a competent authority in another Member State.
Agreed. The IMI system has been effective.
Question 13: What information would be essential on the card? How could a timely update of such information be organised?
- Name, birthday
- Details of competent authority
- Details of training and qualification
Question 14: Do you think that the title professional card is appropriate? Would the title professional passport, with its connotation of mobility, be more appropriate?
(24) The title professional card is appropriate. Although passport implies mobility it is also used in the European Commission's Green Paper on Audit Policy that proposed a European passport for auditors, so some alignment is desirable. To avoid comparison to the audit passport and the maximum harmonisation associated with it, the term card may be preferable.
There may be an assumption that with the passport comes certain 'rights' of admission' which might not necessarily be the case.
Abandon common platforms, move towards European curricula
Question 15: What are your views about introducing the concept of a European curriculum - a kind of 28th regime applicable in addition to national requirements? What conditions could be foreseen for its development?
(25) ACCA agrees that the concept of common platforms needs to be overhauled and has empirically failed. The legal and practical complexities make harmonisation unfeasible.
(26) Although for some professions, it seems that mobility has been more hampered than facilitated, there is a serious lack of data to make conclusions or policy for all professions. For example, in accountancy there is free movement between most member states but there are not many mechanisms to capture or share this data. Perhaps there can be more mapping by competent authorities but as most information relies on the individual to update their address, there is a degree of inherent inaccuracy.
(27) Amongst auditors, statistics demonstrate there is little mobility. Knowledge of local Tax and Law in the language of the Member State has been acknowledged as the main obstacle and therefore harmonising a common curriculum that included national particularities in these subjects would not only be difficult but would not provide a solution to the root obstacle, i.e. there would still be a need for an aptitude test in tax and law. The 8th Directive sets out a curriculum for audit.
(28) Various attempts have been made to harmonise professional accountancy curricula based on common frameworks that have been useful and successful:
- The 8th Directive itself contains a high level curriculum for statutory auditors. This has encouraged the convergence of the curricula of professional bodies in Europe both in audit and in public practice (because auditors work in public practice). Up to now we understand the European Commission has taken the view (which we would agree with) that consensus in any more detail is either unattainable or unnecessary
- IFAC'S authoritative IESs, which apply to the 140 member bodies of IFAC, maintain clear understanding of what is required in terms of education and training for both the accountancy and auditing professions and operate globally
In the private sector and internationally more detailed curricula have been developed based on these common frameworks for example:
- The Association of Chartered Certified Accountants (ACCA) which sets examinations in 140 countries based on International Financial Reporting Standards and International Standards on Auditing; and
- The United Nations Conference on Trade and Development (UNCTAD) which has published a Global Curriculum largely based on a previous ACCA curriculum.
We agree that common platforms have not been a success before and one of the reasons for this is that detailed curricula such as those above are not suitable for statutory backing. They take many years to construct and are hard to reach consensus on, hard to update and hard to enforce. Furthermore if only a self selected group of bodies agree them then this would impede mobility rather than enhance it.
Offering consumer the high quality service they demand
Question 16: To what extent is there a risk of fragmenting markets through excessive numbers of regulated professions? Please give illustrative examples for sectors which get more and more fragmented.
(29) Further regulation of professions could hinder rather than enhance mobility between member states reflecting the 'tension between regulation and freedom of movement'
Question 17: Should lighter regimes for professionals be developed who accompany consumers to another Member State?
(30) Better use of information around competent authorities and their role will help consumers make valid judgements on the services being offered and mobility within that service.
Where a profession is not regulated such as accountancy this does not apply.
Making it easier for professionals to move temporarily
Question 18: How could the current declaration regime be simplified, in order to reduce unnecessary burdens? Is it necessary to require a declaration where the essential part of the services is provided online without declaration? Is it necessary to clarify the terms "temporary or occasional" or should the conditions for professionals to seek recognition of qualifications on a permanent basis be simplified?
(31) This would be difficult to implement and difficult to enforce.
Question 19: Is there a need for retaining a pro-forma registration system?
(32) The pro-forma for registration with a professional body should remain to allow that body to do the necessary checks with other competent authorities before giving membership. It is not a prerequisite for practising within the member state as the profession is not regulated.
Question 20: Should Member States reduce the current scope for prior checks of qualifications and accordingly the scope for derogating from the declaration regime?
(33) Prior checks before admitting to membership for a professional body are essential.
Retaining automatic recognition in the 21st Century
Question 21: Does the current minimum training harmonisation offer a real access to the profession, in particular for nurses, midwives and pharmacists?
Question 22: Do you see a need to modernise the minimum training requirements? Should these requirements also include a limited set of competences? If so what kind of competences should be considered?
Question 23: Should a Member State be obliged to be more transparent and to provide more information to the other Member States about future qualifications which benefit from automatic recognition?
Question 24: Should the current scheme for notifying new diplomas be overhauled? Should such notifications be made at a much earlier stage? Please be specific in your reasons.
Question 25: Do you see a need for modernising this regime on automatic recognition, notably the list of activities listed in Annex IV?
Question 26: Do you see a need for shortening the number of years of professional experience necessary to qualify for automatic recognition?
Continuing Professional Development
Question 27: Do you see a need for taking more account of continuing professional development at EU level? If yes, how could this need be reflected in the Directive?
(34) As a competent authority that is an IFAC member body, CPD is a mandatory ongoing requirement as specified in IES 7. Further regulation in this area is not necessary. This reaches across member states.
More efficient cooperation between competent authorities
Question 28: Would the extension of IMI to the professions outside the scope of the Services Directive create more confidence between Member States? Should the extension of the mandatory use of IMI include a proactive alert mechanism for cases where such a mechanism currently does not apply, notably health professions?
(35) IMI is useful in identifying other competent authorities and through this exchanging information. Before extending its reach further the system needs to be improved so that it can cope with the volume of traffic that already exists.
Question 29: In which cases should an alert obligation be triggered?
- N/A (relating to health professionals)
Question 30: Have you encountered any major problems with the current language regime as foreseen in the Directive?
(36) The importance of competence in the area of language for many professions should not be underestimated. It is appropriate that professional bodies continue to test linguistic competence of individuals as part of the compensatory measures.