RESTRICTED
WORLD TRADE S/WPPS/W/7/Add.19
2October 1996
ORGANIZATION
(96-3960)
Working Party onProfessional Services Original: English
COMMUNICATION FROM NEW ZEALAND
Response tothequestionnaire ontheaccountancy sector
Thefollowing communication iscirculated attherequest ofNewZealand.
________
AnewActhasbeenpassed andwillcome intoforce on1October 1996. Theanswers tothis
questionnaire therefore reflect thenewInstitute ofChartered Accountants ofNewZealand (ICANZ)
Act1996andtheRules oftheInstitute andCode ofEthics tobelodged withtheRegistrar ofCompanies
immediately following theAnnual General Meeting inNovember 1996. Section references inthebody
ofthisresponse aretherefore tosections inthenewActunless otherwise stated.
I. GENERAL
1. What aretheprofessional titlesofaccountants inyourcountry? Arethese professional titles
protected? Please specify how.
Thelawallows anypersons whoaresuitably qualified todescribe themselves asanaccountant
andtherefore tooffer accountancy services tothepublic (section 15). Membership ofICANZ and
thetermchartered accountant areprotected under theAct(section 14),however, withpenalties for
persons whoimply membership ofICANZ orusethedesignation chartered accountant without being
entitled todoso.
2. Howistheaccountancy sector regulated inyourcountry: bylaw,professional self-regulation,
acombination ofboth?
Theprofession isregulated bothbylawandbyprofessional self-regulation. Regulation for
ICANZ members isbywayoftheAct,Rules oftheInstitute andaCode ofEthics.
3. Arethere anyprovisions toprotect company names, whether national orforeign, inyour
country?
Protection andregulation ofcompany names, specifically thoserelating tosimilar name disputes
arenolonger theconcern ofcompany lawbutthedomain oftheFairTrading Act1986 andthetort
ofpassing off.Under section 41oftheFairTrading Act1986, aninjunction maybeobtained tostop
theuseofaname which contravenes thatAct. Names thataremisleading, deceptive orarelikely to
mislead ordeceive contravene section 9oftheFairTrading Act.
TheTrade Marks Act1955protects theexclusivity ofparticular marks. These distinctive marks
must contain orconsist ofatleastoneofthefollowing essential particulars:S/WPPS/W/7/Add.19
Page2
(a) Thename ofacompany, individual, orfirmrepresented inaspecial orparticular
manner;
(b) Thesignature oftheapplicant forregistration orsome predecessor inhisbusiness;
(c) Aninvented word orinvented words;
(d) Aword orwords having nodirect reference tothecharacter orquality ofthegoods,
andnotbeing according toitsordinary signification ageographical name orasurname;
(e) Anyother distinctive mark.
Theuseasafirmname ofanyregistered trade mark byanyone, except theproprietor or
registered users, mayberestrained bycourt action, unless theunauthorised usercansatisfy thecourt
thatsuchuseisnotlikely todeceive orcause confusion ortobetaken asindicating aconnection in
thecourse oftrade between thegoods andaperson authorised tousethemark.
Section 22(2) oftheCompanies Act1993 prohibits theRegistrar fromreserving aname that
contravenes anyenactment, isoffensive or"thatisidentical oralmost identical "tothename ofanother
company. Under section 22(2)(b), thekeywords ofthenames andtheorder inwhich theyappear
must besuchthattheyare"virtually indistinguishable fromoneanother ".
Theapplication ofsection 22(2)(a) which deals withnames "which would contravene an
enactment ",hasbeenheldtoberestricted tothose enactments which specifically prohibit orrestrict
theuseofaname, egtheFlags, Emblems andNames Protection Act1981.
Thepower toselect aname maybeaffected byotherlegislation which, inthecourse ofachieving
other purposes, incidentally limits thecommon lawfreedom ofchoice.
Themajority oflarger accounting firms areprotected through branding requirements (for
example; ICPMG, Coopers andLybrand).
4. What aretheprofessional bodies inyourcountry? Aretheyrecognised bylawasaregulatory
ordisciplinary bodyfortheaccountancy profession inyourcountry, orarethese functions
fulfilled byother institutions (please specify)?
ICANZ istheonlyprofessional accountancy body. Itisrecognised asaregulatory and
disciplinary body.S/WPPS/W/7/Add.19
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5. How many members dothese professional bodies have? What istheestimated proportion
ofthose:
- inpublic practice
- inindustry orcommerce
- inthepublic sector
- ineducation
- unoccupied (retired, etc.)
- other
Membership ofICANZ is24,057 (June 1996).
- inpublic practice 31%
- inindustry orcommerce 42%
- inthepublic sector 9%
- ineducation 2%
- unoccupied (retired, etc.) 16%
6. What isthescope ofactivities regularly practised byaccountants inyourcountry?
- statutory audit
- audit ofmergers
- audit ofcontributions inkind
- public sector audit
- other audits
- accounting
- insolvency practice
- taxadvice
- taxrepresentation
- investment advice
- consulting
- expert witness inaccounting
- other
Allofthese disciplines maybeundertaken bypractitioners, butsome prefer tofocus ona
selection ofthese.
7. Which ofthese activities areregulated inyourcountry?
Certain statutes, suchastheCompanies Act,require thatanaccounting activity becarried out
byaholder ofaCertificate ofPublic Practice, which isissued byICANZ. TheCompanies Actrequires
thataudits ofpublic companies becarried outbyaholder ofaCertificate ofPublic Practice orby
anofficer oftheAudit Department authorised tobeanauditor, orbyamember from anassociation
ofaccountants from outside NewZealand approved under theCompanies Act.
8. Which oftheseactivities arereserved bylawtoaccountants, shared byaccountants withother
professions (please specify), orevenforbidden toaccountants inyourcountry, e.g.byfull
prohibition orbynotallowing cumulation ofcertain activities which areconsidered
incompatible ormutually exclusive?
Asabove.S/WPPS/W/7/Add.19
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II. QUALIFICATION REQUIREMENTS
9. What arethequalification requirements forthese activities inyour country interms of
university/higher education degree, practice andprofessional exam? Specify thenumber
ofyears required foreach element, andthedifferences according totheactivities (audit,
insolvency, tax,etc.)covered bythequalification.
Thelawallows anyperson whoissuitably qualified todescribe themselves asanaccountant
andtherefore toofferaccountancy services tothepublic. Members ofICANZ mustcomplete afour
yearacademic programme, including typically either afouryeardegree orathree yeardegree and
diploma fromanaccredited University orPolytechnic, threeyears practical experience and,currently,
apassintheFinal Qualifying Exam (FQE). Asof1997, theFQEwillbereplaced byaProfessional
Competence Examination I(PCE I).Intending members willalsohave toattend aprofessional
accounting school runbyAdvanced Business Education LtdandpassPCEII.Inorder toagain aCPP
acandidate mustbeamember oftheCollege ofChartered Accountants forthepreceding twoyears,
beordinarily resident inNewZealand andhaveattended acourse forNewPractitioners runbyICANZ.
10. Arethere anypre-conditions tomeet tostarttheprofessional education: minimum age,
particular diploma ortitle,prior education, registration withaprofessional body, payment
ofafee,other (please specify)?
Thestudent must have passed theuniversity entrance examination, apply forprovisional
membership oftheInstitute andpayafeeof$50.
11. What arethesubjects tobecovered bytheeducation: accounting, audit, tax,general law,
economics, ethics, information technology, other (please specify)?
Thesubjects tobecovered bythefouryearundergraduate education include:
- Financial Accounting (including corporate andpublic sector accounting, external
reporting standards, corporate restructuring andinsolvency)
- Management Accounting
- Auditing
- Tax
- Finance/Treasury
- Accounting Information Systems
- Information Technology
- Commercial Law
Quantitative Methods andStatistics
- Economic
- Organisational Behaviour andManagement StudiesS/WPPS/W/7/Add.19
Page5
Inaddition, undergraduates arerequired toundertake approximately 20-30% oftheir
undergraduate study insubjects other thanaccounting andbusiness related disciplines.
Theeducation covered inthethree yearprofessional post-graduate phase focuses onthe
application inaprofessional context ofthefollowing disciplines:
- external reporting, auditing, taxation (loosely termed Compliance)
- management accounting, finance, Treasury (loosely termed Financial Management)
- Human Resources, Marketing, Organisation Issues, Business Strategy andPolicy and
theBusiness Environment -(loosely termed Business Studies).
III. TECHNICAL STANDARDS AND ETHICS
12. Inrelation towhich activities donational standards exist(audit, accounting, insolvency,
other)? Please specify theirmain policy objectives.
ICANZ establishes standards forbothaccounting andprofessional engagements; including
auditing, reviews andcompilation engagements.
Accounting standards describe ruleswhich establish requirements forrecognising, measuring
anddisclosing transactions andother events ingeneral purpose financial reports.
Members involved in,orresponsible forthepreparation andpresentation ofgeneral purpose
financial reports arerequired totakeallreasonable stepstoensure thatgenerally accepted accounting
practice (GAAP) iscomplied with.
Financialreportingstandardsaretheprimaryindicatorsofgenerallyacceptedaccountingpractice.
Guidance intheform oftechnical guidance bulletins existforspecialised areas offinancial
reporting withtheemphasis being tohighlight generally accepted accounting practice.
ProfessionalEngagementstandardscoverAuditing,Review,Advisory,andServiceEngagements.
Atpresent theydonotcover insolvency engagements although theICANZ isintheprocess ofdeveloping
standards relating toinsolvency practice.
Professional Engagement standards aredivided into:
- Professional engagement standards. Theobjective ofthese standards istoadvise
members ofrequirements thatmembers arerequired toobserve inparticular types of
engagements (audit engagements, review engagements, oragreed upon procedures
engagements) inorder formembers tomeetthefundamental principles oftheCode
ofEthics .Adherence totherequirements ofthesestandards ismandatory formembers
ofICANZ byvirtue oftheirmembership oftheorganisation; and
- Professional engagement guidelines which provide guidance onaccepted practice, and
maybeadapted where applicable toparticular engagements. These guidelines indicate
whatmayberequired ofmembers tomeettheprofessional engagement standards.S/WPPS/W/7/Add.19
Page6
TheCode ofEthics regulates thegeneral ability totakeonengagements, andconduct during the
engagement.
Policy objectives
Accounting andauditing standards areestablished tocontribute tothefollowing keypolicy
objectives:
(1) Toencourage minimum acceptable standards ofprofessional behaviour.
(2) Toensure members meetcertain minimum standards toensure thedelivery ofquality
services tothepublic.
(3) Toensure anprofessional image ofcompetency ismaintained. Public confidence will
inturnenhance theSociety 'sprofessional standing.
(4) Tomaintain market governance.
(5) Theestablishment andongoing maintenance ofthebrand ofChartered Accountant.
Policy objectives forethical standards aretoensure acceptable behaviour byprofessionals to
maintain public confidence.
13. Which bodyorinstitution develops thesestandards andmonitors theirimplementation? What
aretheconsequences ofabreach ofthestandards (fortheprofessional, forclients, etc.)?
ICANZ develops professional engagement standards, andfinancial reporting standards (FRS).
ICANZ hastwoBoards todevelop these standards:
- TheProfessional Practices Board (PPB) establishes professional engagement standards,
andwillberesponsible fortheinsolvency engagement standard when thatproject
develops. TheICANZ Council approves thesestandards forapplication toallICANZ
members.
- TheFinancial Reporting Standards Board (FRSB) develops thefinancial reporting
standards. Depending onthescope oftheFRSitisthenapproved byeither the
AccountingStandardsReviewBoard(ASRB),agovernmentappointedandfundedboard,
ortheICANZ Council. Ifapproved bytheASRB thenunder theFinancial Reporting
Act1993 thatFRShasstatutory effect andisnotjustbinding onICANZ members.
FRSdeveloped bytheFRSB aresector neutral. FRSapproved bytheASRB willapply to
most reporting entities inthepublic andprivate sectors.
TheFRSB doesnothaveamonopoly overthedevelopment ofFRSthatcanbeapproved by
theASRB. However, asyetnoother organisation hashadaFRSapproved.
Monitoring oftheabove standards isperformed byeither ICANZ, through monitoring the
actions ofitsmembers, orbyindependent entities including theASRB andtheRegistrar ofCompanies,
where statutory breaches exist. Capital markets alsomonitor closely disclosure andcompliance by
entities.S/WPPS/W/7/Add.19
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Allmembers ofICANZ arerequired tofollow professional engagement andfinancial reporting
standards. Fundamental principle No.4oftheCode ofEthics states thatmembers aretocarry out
theirprofessional work inaccordance withthetechnical andprofessional standards appropriate tothat
work. Ifamember doesnotfollow thestandards, ICANZ ’sDirector ofQuality Assurance mayact
onacomplaint from another member ormember ofthepublic. Iffurther action isrequired itwill
bereferred totheICANZ Investigation Committee, andthenpossibly theDisciplinary Committee.
ICANZ hasalsodeveloped apractice review unittoassist members inpublic practice andensure
compliance withbothengagement andprofessional standards, andFRS.
TheASRB hasaroleinthemonitoring oftheimplementation ofFRS. Toassist theASRB
inthisroleitreceives copies ofqualified auditreports fromtheRegistrar ofCompanies. TheRegistrar
ofCompanies hastheresponsibility forensuring compliance withFRSforcompanies. Breaches with
approved FRSaresubject toenforcement powers intheFinancial Reporting Act1993, section 36.
TheSecurities Commission isanother regulatory authority thatactions breaches byapreparer .
Auditors haveastatutory obligation tonotify anybreach toregulatory authorities (applies to
issuers andcompanies). Furthermore, theOffice oftheController andAuditor-General, aspartof
itsauditing functions, monitors compliance withFRSbypublic sector bodies.
14. Aretheinternational standards developed byIFAC (International Education Standards and
Guidelines, International Standards onAuditing) andIASC (International Accounting
Standards) recognised orusedinyourcountry? Ifyes,please explain how. Ifno,please
explain why.
International standards developed byIFAC andtheIASC arerecognised andusedinNew
Zealand. International accounting standards published bytheIASC haveauthoritative support forall
entities inthepreparation ofgeneral purpose financial reports where equivalent/applicable NewZealand
statements donotexist.
International standards andstudies areusedasanintegral partoftheresearch anddevelopment
ofNewZealand 'sstandards andguidance.
1. Authoritative support
IFAC
- Explanatory Foreword toGeneral Purpose Financial Reporting paragraph 9.3-
ICANZ intention toincorporate public sector standards infinancial reporting
standards when possible.
IASC
- Explanatory Foreword paragraph 4.5-IASs constitute authoritative support
under GAAP. Therefore thereisrecognition oftheapplication ofIASswhen
there isnoequivalent NewZealand standard.
- Explanatory Foreword toGeneral Purpose Financial Reporting paragraph 9.2-
ICANZ intention toincorporate IASsintofinancial reporting standards when
possible.S/WPPS/W/7/Add.19
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- Explanatory Foreword toGeneral Purpose Financial Reporting paragraph 9.5
-theAppendix offinancial reporting standards istoflagdifferences between
thefinancial reporting standard andtheinternational accounting standards.
2. Policy objectives
- Inaddition totheabove, ICANZ hasapolicy objective ofinternational
harmonisation. Particular emphasis isplaced onharmonisation ofaccounting
andauditing standards withthose ofIFAC, IASC andAustralian (because of
theproximity andsimilarity ofmarket operations between ourtwocountries).
- Allaccounting andauditing Standards contain anAppendix which compares
Standards withequivalent International andAustralian standards.
15. Inrelation towhich activities does aparticular ethical code exist (audit, accounting,
insolvency, other)? Please specify itsmain policy objectives.
TheICANZCodeofEthicsprovidesanoverallframeworkfordefininganethicalcodeofpractice
foraccountants inNewZealand. TheCode ofEthics identifies theresponsibilities andobligations
ofmembers ofaprofessional body andcodifies them forthebenefit ofbothproviders andrecipients
ofaccounting services. TheCode ofEthics identifies seven fundamental principles ofprofessional
behaviour. Themaintenance ofdiscipline andgood conduct depend onthese fundamental principles.
Observance bymembers ofthese iscentral tothe"public interest ".
Inaddition tothefundamental principles, theCode ofEthics identifies eighty eight ethical
provisions inacodified form. Compliance withethical provisions ismandatory byallmembers.
TheICANZ Code ofEthics isfurther supplemented bythree Ethical Guidelines. Ethical
Guidelines provide extended guidance anddiscussion onkeyaspects oftheCode ofEthics orprocedures
tobeadopted toensure compliance withtheCode.TheEthical Guidelines presently anissue are:
- EG-1: Guideline onIntegrity, Objectivity andIndependence.
- EG-2: Guideline onEthics inTaxPractices
- EG-3: Guideline onQuality Control (exposure draft)
TheICANZ Ethical codeexists inrelation toallaccounting activities undertaken byamember
ofICANZ.
- Ethical codesetsoutgeneral conduct standards ofbehaviour thatarerequired when
amember undertakes engagements ofanykind.
ICANZ hasinplace ethical codes forthefollowing activities:
- Accounting
- Auditing
- Taxation
- Advisory Engagement
- Review Engagements
- Quality Control forAccounting Practices andengagements.S/WPPS/W/7/Add.19
Page9
ICANZ acknowledges theincreasing trend tospecialisation ofaccounting services. Public
expectation expects minimum standards tobemaintained. ICANZ isundertaking research intothe
needforethical codes inother specialised areas ofaccounting services including:
- Insolvency
- Investment advice
- Financial planning
Ethical Codes aresupplemented bytechnical Standards where appropriate.
Ethical Codes havebeendeveloped tomeetthefollowing policy objectives:
- maintaining acceptable professional behaviour bymembers ofICANZ;
- enhancing the"Chartered Accountant "brand inNewZealand;
- maintaining minimum standards ofquality foraccounting services delivered;
- contributing tothepublic interest;
- maintaining confidence indomestic andinternational capital markets;
- maintaining public confidence.
16. Which body orinstitution develops thiscodeandmonitors itsimplementation? What are
theconsequences incaseofbreach oftheethical codebyaprofessional orafirm?
TheCode ofEthics isdeveloped andadministered byICANZ. TheProfessional Conduct
Committee monitors itsimplementation. Breaches canresult inreferral totheDisciplinary Tribunal
which hasanumber ofsanctions available under therules.
17. Arethere restrictions onmarketing, solicitation, advertising?
Therestrictions relate mainly tothemaintenance ofprofessionalism andgoodtaste. TheCode
ofEthics enumerates forms ofunacceptable promotion, e.g:
- useofcoercion
- material notingood taste
- creating falseorunjustified expectations
- unfavourable comparisons withother members
- implying ability toexert influence onaCourt orTribunal, etc.
- selflaudatory statements, etc.
18. Arethere restrictions onfee-setting (minimum/maximum levels imposed, indicative scale,
etc.)?
No.
IV. LICENSING REQUIREMENTS AND PROCEDURES
19. Apart fromthequalification requirements, whatarethelicensing requirements forindividuals
inyourcountry?
There arenospecific licensing requirements assuch. Some accountancy activities maybe
restricted toholders ofaCertificate ofPublic Practice issued byICANZ assetoutintheresponseS/WPPS/W/7/Add.19
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toquestion 7above. Therequirements forICANZ membership aresetoutintheanswer toquestion 20
below.
20. Arethere anyconditions imposed tobeeligible formembership oftherelevant professional
body(ies)? Please specify.
ICANZ Rules statethataperson shallbeeligible formembership ofICANZ whoisofgood
character andreputation andwhomeets thefollowing requirements:
(a) Fullmembership -onsatisfying therelevant requirements setoutinAppendix 1(listed
below).
(b) Provisional membership -onsatisfying therequirements fixed bytheCouncil from
timetotime.
(c) Lifemembership -ontherecommendation oftheCouncil andelection by75%of
members present atanygeneral meeting.
(d) Fellowship -onsatisfying therequirements fixed bytheCouncil from timetotime.
Athree-tier College structure wasintroduced forICANZ inJuly1995. TheCollege structure
recognises varying educational andexperience differences among members. Certain accounting services
arestructured toapply tospecific colleges (forexample; onlymembers oftheCollege ofChartered
Accountants, whoholdacertificate ofpublic practice, canundertake anauditofaregistered company).
Members maybelong tooneofthefollowing:
- theCollege ofChartered Accountants -formembers active andcurrent inaccounting
fields.
- theCollege ofAssociate Chartered Accountants -formembers whoarenolonger
involved directly inaccounting, butwishtoretain theirlinkwiththeSociety, or
- theCollege ofAccounting Technicians -forpara-professionals skilled inproviding
support services forprofessional accountants andsenior management intheir
organisations.
Allmembers must beordinarily resident inNewZealand.
(PathwaysareavailablebetweenCollegesshouldmemberswishtotransfer.Thepathwaysspecify
educational andexperience requirements thatmust besatisfied before progressing).
Appendix 1requirements areasfollows:
I. College ofChartered Accountants -Rule3.1
1. Themembership requirements fortheCollege ofChartered Accountants are:
(a) Four years'approved tertiary study.
(b) Oneyear'sgeneral practice experience withorwithout supervision
byamentor.S/WPPS/W/7/Add.19
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(c) Twoyears'specified practical experience withsupervision byamentor
inanApproved training organisation.
(d) ApassintheProfessional Competency Examination I(PCEI).
(e) Attendance ataProfessional Accounting School.
(f) ApassintheProfessional Competency Examinations II(PCEII).
2. Ongoing membership oftheCollege ofChartered Accountants requires the
satisfactory completion ofapproved Continuing Professional Development
(CPD).
3. Thespecific criteria andtheminimum number ofhours ofCPD which are
required tobecompleted eachyearshallbesetbytheAdmissions Board from
timetotime, afterconsultation withtheCollege ofChartered Accountants '
Committee.
II. College ofChartered Accountants -Rule4.1
1. Themembership requirements fortheCollege ofAssociate Chartered
Accountants are:
(a) Four years'approved tertiary study.
(b) Oneyear'sgeneral practice experience withorwithout supervision
byamentor.
(c) Twoyears'specifiedpracticalexperiencewithsupervisionbyamentor.
(d) ApassintheProfessional Competency Examination I(PCEI).
III. College ofAccounting Technicians -Rule5.1
1. Themembership requirements fortheCollege ofAccounting Technicians are:
(a) Twoyears'approved tertiary study.
(b) (i) Oneyear'srelevant practical experience withasupervisor or
mentor from either theCollege ofChartered Accountants or
theCollege ofAssociate Chartered Accountants; or
(ii) Twoyears'relevant practical experience while studying.
(c) Attendance andsatisfactory performance onanapproved professional
course.
2. Ongoing membership oftheCollege ofAccounting Technicians requires the
satisfactory completion ofapproved Continuing Professional Development
(CPD).S/WPPS/W/7/Add.19
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3. Thespecific criteria andtheminimum number ofhours ofCPD which are
required tobecompleted eachyearshallbesetbytheAdmissions Board from
timetotime, afterconsultation withtheCollege ofAccounting Technicians
Committee.
21. Arethere specific licensing requirements forprofessional firms?
There arenospecific licensing requirements forfirms wishing toestablish themselves as
accounting firms andoffer accounting services.
Forpersons forming afirmwhoarenotmembers ofICANZ, there arenoother relevant
requirements beyond theneedtocomply withthegeneral law,inparticular, thePartnership Act1908
withregard tovoting rights andthemanagement/administration ofthefirmassetoutbelow under
therequirements applicable tomembers ofICANZ.
Persons forming afirmwhoaremembers ofICANZ aresubject toanumber ofrelevant
requirements intheformation ofafirm. These requirements aresetoutunder general statutes, including
theInstitute ofChartered Accountants ofNewZealand Act1996andtheRules ofICANZ established
under theAct. Under theAct,members ofICANZ have protected useoftheterm "Chartered
Accountant "butnotoftheterm"Accountant ".
Insummary, therequirements forICANZ members inpartnership areasfollows:
1. Minimum capital -none;
2. Number ofpartners -unlimited;
3. Membership ofaprofessional body -requirement tobeamember ofICANZ under
ICANZ Rules;
4. Registration withtheministry orother institution -registration through issue ofa
Certificate ofPublic Practice issued byICANZ inaccordance withICANZ Rules;
5. Professional indemnity insurance -norequirements;
6. Withreference tonatural persons carrying outaccountancy activities onbehalf ofthe
firm-amaximum ratioofnon-members tomembers of49-51 isprescribed under
ICANZ Rules;
7. With reference tovoting rights -equal voting rights under thePartnership Act1908
subject tovariation under theindividual partnership agreement;
8. Withreference tomanagement/administration ofthefirm-equal rights tomanage under
thePartnershipAct1908subjecttovariationundertheindividualpartnershipagreement.
Inaddition, requirements existfortheappointment ofindividuals asauditors ofregistered
companies. Anauditor ofaregistered company under Section 199(1) oftheCompanies Act1993must
beeither:
(a) Amember ofICANZ whoholds aCertificate ofPublic Practice; orS/WPPS/W/7/Add.19
Page13
(b) Anofficer oftheAudit Department authorised inwriting bytheController andAuditor-
General tobeanauditor ofacompany forthepurposes ofthissection; or
(c) Amember, fellow, orassociate ofanassociation ofaccountants constituted outside
NewZealand which is,bynotice intheGazette ,forthetimebeing approved forthe
purposes ofthissection bytheMinister oftheCrown who, under theauthority ofany
warrant orwiththeauthority ofthePrime Minister, isforthetimebeing responsible
fortheadministration ofthisAct.
22. Cananapplication forlicensing befiledatanytimeoftheyearorarethere specific dates
torespect? Howlongdoesittaketocomplete thewhole licensing procedure? Please specify
incaseofdifferences between individuals andfirms.
Notapplicable tonon-ICANZ members. Applications forICANZ membership canbemade
atanytime. Forthose meeting ICANZ requirements, theprocedures normally taketwotothreemonths
tocomplete.
23. Arethere differences interms oflicensing requirements and/or procedures, according to
theactivities covered bythelicence (audit, insolvency, etc.)? Please specify. What kind
ofdocumentation isnecessary/accepted? Aredocuments issued inother countries acceptable?
Please specify.
Nolicensing requirements needtobemet. Non-ICANZ members whoholdforeign practice
authorisations require Ministry ofJustice approval toperform theaudit ofpublic companies.
24. What happens when thelicensing conditions arenolonger respected bytheindividual or
thefirm?
InthecaseofnonICANZmembersonwhomnosuchconditionsareimposed,stringentconsumer
protective legislation andcommon lawenforcement areinplace todealwithinappropriate activity.
Relevant legislation istheConsumer Guarantees Act1991andFairTrading Act1996. Common law
enforcement would normally ariseunder contract orthetortofnegligence. These legalremedies are
available against allpersons andentities, whether ornotICANZ members.
When there isabreach ofanyrequirements imposed under statute thenthenon-compliance
willbeenforced bythegovernment entity responsible forthelegislation. Inmostcases, thiswillbe
theCommerce Commission.
Where thenon-compliance relates toconditions established under ICANZ Rules, enforcement
willbeundertaken bytheDisciplinary Committee ofICANZ. Amember found guilty bythe
Disciplinary Committee ofabreach oftherules orCode ofEthics maybeexcluded from ICANZ,
suspended foraperiod ofuptofiveyears, fined orcensured.
V. RECOGNITION OFQUALIFICATIONS
25. Arethereanypossibilitiesfortakingaccountofqualificationsacquiredbyforeignprofessionals
inanother country? Arethere bilateral agreements withother countries inthisrespect?
Anysuitably qualified person maypractise. TheNewZealand Qualifications Authority has
aresponsibility tofacilitate therecognition ofoverseas qualifications inNewZealand. FormembershipS/WPPS/W/7/Add.19
Page14
ofICANZ, recognition oftherequirements foradmission, inwhole orinpart,hasbeenextended to
eight overseas jurisdictions, aslisted intheresponse toquestion 26below.
26. Arethere anyautomatic recognition ormutual recognition agreements between your
professional bodies andtheircounterparts inother countries? Ifso,please specify themain
characteristics ofsuchagreements; ifnot,please explain why.
Recognition exists inrespect ofthefollowing jurisdictions:
- TheAustralian Society ofCertified Practising Accountants*
- TheCanadian Institute ofChartered Accountants
- TheChartered Association ofCertified Accountants (UK)*
- TheInstitute ofChartered Accountants inAustralia*
- TheInstitute ofChartered Accountants inEngland andWales*
- TheInstitute ofChartered Accountants ofIreland
- TheInstitute ofChartered Accountants ofScotland*
- TheSouth African Institute ofChartered Accountants
Members oftheabove bodies havetosittwopapers toachieve reciprocal membership with
ICANZ. These areataxpaper andanother onbusiness orpartnership law.
Members ofother foreign bodies havetheirqualifications assessed onacourse bycourse basis.
27. Where possibilities oftaking account offoreign qualifications exist, isafulllocalexamination
oralocaltraining exceeding 12months required? Please specify. Isalocallicence always
necessary topractice aregulated accountancy activity? Please specify when thisisnotthe
case.
ForICANZ fuller localtraining mayberequired, including apassinPCEIandPCEII.This
isassessed onanindividual basis. Membership ofICANZ isnecessary foraCertificate ofPublic
Practice. Itshould benoted thatanysuitably qualified person canusethetermaccountant orauditor
andofferservices butnotasamember ofICANZ. Thatperson cannot however carry outstatutory
audits.
28. Whataretheaccreditation/licensingrequirementsimposedonforeignprofessionalsauthorised
topractice intheirhome country? Maycertain (regulated) activities becarried outonthe
basis ofaforeign licence?
Apart fromtheabove answers which cover ICANZ policy, regulatory audits cannot becarried
outbyforeign professionals unless approved bytheMinister ofJustice. Once theexaminations above
havebeenpassed theprofessional canapply forapublic practice certificate andoperate asaNZmember
inpractice does.
*These fivebodies have alsoreceived approval aspertheprocedure referred tointheresponse toquestion
28.Further, theAmerican Institute ofCertified Public Accountants hasreceived approval under theprocedure
referred tointheresponse toquestion 28.S/WPPS/W/7/Add.19
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VI. REGULATIONS GOVERNING THE ESTABLISHMENT OFACOMMERCIAL
PRESENCE
29. Arethere anyrestrictions ontheform under which onecanestablish (partnership,
incorporation, other)? Please specify.
Incorporation isnotpermitted. Fundamental Rule60prohibits trading inacorporate formor
having abeneficial interest inacompany which carries onthebusiness ofaccounting (i.e.owned by
non-members). Practitioners mustpractise inthemember 'sownname orthatofhispartners orformer
partners.
30. Arethere restrictions onforeign direct investment andownership, including restrictions
applying tonotlocally qualified individuals orfirms? Please specify.
Withregardtonon-ICANZmembers,therearenorestrictionsonforeigninvestmentorownership
specifictoaccountancy,althoughthegeneralrequirementslistedinNewZealand’sScheduleofhorizontal
commitments under theGeneral Agreement onTrade inServices would apply where relevant. Only
ICANZ members mayform achartered accountancy firm, however, andICANZ members mustbe
ordinarily resident inNewZealand.
31. Isthere arequirement ofaminimum number orpercentage oflocal directors, managers
orstaff(please specify)?
There isnorestriction onthenumber ofpartners orthenumber orratioofstaffemployed.
Ascorporate trading isnotpermitted thequestion ofDirectors doesnotapply.
32. Arethererestrictionsontheabilityoflocallyestablishedfirmstodevelopinternationalrelations
(membershipofaninternationalnetwork,associationwithforeignfirms,etc.)?Pleasespecify.
No.ForICANZ members afirmmaysetupaliaison withanyreputable overseas firmor
firms, although theagency agreement needs tobeapproved bytheICANZ Council.
33. Istheuseofinternational orforeign names restricted forfirms?
No.Afirmmayadopt aninternational name. Most ofthelarger firms haveoverseas names, e.g.
KPMG.
VII. REGULATIONSGOVERNINGTHEENTRYANDTEMPORARYSTAYOFNATURAL
PERSONS FOR THE PURPOSE OFSUPPLYING ACCOUNTANCY SERVICES
34. Istheentry andstayofprofessionals subject tolabour market testsoranyother restrictions?
Please specify.
Theentry andstayofprofessionals issubject tolabour market testsandtoother normal
immigration requirements. Intracorporate transferees arenotsubject tolabour market testsbutare
otherwise subject tonormal immigration requirements.
Many firms comprising ICANZ members exchange staffforthepurpose ofexperience and
personal development. However, thisprogramme isforstaffmembers and/or study leave andnot
foroffering services other thanunder thesupervision ofNZpartners.S/WPPS/W/7/Add.19
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35. Isthere anyprocedure facilitating thetemporary entry andstayofprofessionals tosupply
accountancy services? Please explain.
Seeanswer toquestion 34above regarding intracorporate transferees, whoenterunder aSpecial
Categories ofWork Visas/Permits policy.
Work donebyprofessionals visiting ICANZ member firms maybedonebywayofconsultancy
orsecondment buttheNZfirmtakes responsibility fortheoutputs andwould render thefeesinthe
firmname.
36. Arethereanyrestrictions onhiring oflocalprofessionals byforeign firms andprofessionals?
Please explain.
No.Quite often overseas firms willseekthename ofICANZ members whomayspecialise inaudit,
insolvency orsome other discipline.
VIII. NATIONALITY/RESIDENCY REQUIREMENTS
37. Isacondition ofnationality/citizenship imposed topractice certain activities, tostartan
education, toobtain alicence, tobecome member ofaprofessional body, etc.? Please specify.
No.Tobecome amember ofICANZ, persons donothavetochange theirnationality ifthey
comply withtherequirements ofentry inrespect ofexamination andtheAdmissions policy ofthetime.
38. Isacondition ofestablishment, prior residency orresidency imposed topractice certain
activities, toobtain alicence, tobecome member ofaprofessional body, etc.? Please specify
theconditions andthedefinition ofestablishment, residency, etc.when relevant. Isitpossible
tohaveaprofessional establishment inmore thanonecountry?
There arenogeneral restrictions. Some accountancy activities mayberestricted toholders
ofaCertificate ofPublic Practice, whomust, interalia,beordinarily resident inNewZealand.
Certain statutes, suchastheCompanies Act,require thatanaccounting activity becarried out
byaholder ofaCertificate ofPublic Practice. TheCompanies Actrequires thataudits ofpublic
companies becarried outbyaholder ofaCertificate ofPublic Practice orbyanofficer oftheAudit
Department authorised tobeanauditor, orbyamember fromanassociation ofaccountants fromoutside
NewZealand approved under theCompanies Act.
Ifthequestion relating tohaving aprofessional establishment inmore thanonecountry relates
tohaving separate accounting practices indifferent countries theanswer isnoformembers ofICANZ.
Amember ’sCertificate ofPublic Practice relates onlytopractising inNewZealand.