ACT No. VIII of 2016 AN ACT to amend the Accountancy Profession Act, Cap. 281.

I assent.

M ARIE L OUISE

(L.S.)

C OLEIRO P RECA

President

26th January, 2016

ACT No. VIII of 2016

AN ACT to amend the Accountancy Profession Act, Cap. 281.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

(1) The short title of this Act is the Accountancy

Profession (Amendment) Act, 2016, and this Act shall be read and

construed as one with the Accountancy Profession Act, hereinafter

referred to as "the principal Act".

(2) This Act shall come into force on 1st February, 2016.

Article 2 of the principal Act shall be amended as follows

(a)

the definition "chain of command" shall be deleted;

(b) the definition "firm" shall be substituted by the

" "firm" means, unless otherwise specified in

a directive issued or regulation made under this

Act, an audit firm or an accountancy firm;";

(c) the definition "principal" shall be substituted by the

" "principal" means every member of the ad-

ministrative or management body of a firm, and

any individual who is authorised to sign a report on

behalf of a firm; and in the case of an audit firm,

shall include any individual responsible for leading

the engagement

Provided that any individual carrying out the

role of an engagement quality control reviewer on a

statutory audit, and who is not authorised to sign a

report on behalf of the firm in any capacity, is not

deemed a principal

Provided further that a warrant holder or a

holder of a practising certificate who acts as a sole

practitioner, may not engage a principal to act on

his behalf;".

Sub-paragraph (i) of paragraph (c) of sub-article (2) of Amendment of

article 3 of the

article 3 of the principal Act shall be substituted by the following

principal Act.

"(i) successfully completed the course leading to the

award of the professional accountancy degree organized by the

University of Malta; or".

Immediately after article 5 of the principal Act, there shall Addition of new

article to the

be added the following new article

principal Act.

" Duty to

Every warrant holder shall give to

the Board such information as the Board may

information.

reasonably require or as may be prescribed,

and shall give notice to the Board of any

relevant change in any information previously

given to it within fifteen days after the date on

which the change occurs.".

5. Article 6 of the principal Act shall be amended as follows

Amendment of

article 6 of the

principal Act.

(a) sub-article (1) thereof shall be substituted by the

"(1) There shall be a Board, to be known as

the Accountancy Board, consisting of a Chairman

and six other members, all of whom shall be non-

practitioners and who are knowledgeable in the

areas relevant to statutory audit and accounting,

who shall be appointed by the Minister in

accordance with the provisions of this Act and shall

hold office for such term not exceeding three years,

and under such conditions as may be set out in their

respective letter of appointment

Provided that on the expiration of the term for

which a person is appointed under this sub-article,

he shall be eligible for re-appointment.";

(b) sub-article (2) thereof shall be substituted by the

"(2)

The Board shall consist of

(a)

a chairman of recognised standing and

experience in the accountancy and auditing

profession;

(b)

a member from a list of two nominated

by the University of Malta from among the

teaching staff of the Faculty or Faculties in which

teaching of and research in the field of accountancy

and auditing is organised;

(c)

a senior official of the Ministry

responsible for finance;

(d)

two members from a list of four

nominated by a recognised accountancy body; and

(e)

two other members."; and

(c) in sub-article (3) thereof, for the words "to form a

quorum shall be six" there shall be substituted the words "to

form a quorum shall be four".

Immediately after article 6 of the principal Act, there shall

be added the following new article

" Powers of the

(1) The Board shall engage two

practitioners in a permanent role to assist it in

the proper discharge of its duties. The two

practitioners shall be appointed by the Board

for a one-year term and chosen from a panel

of six, nominated by a recognised

accountancy body. In the fulfilment of their

duties, the practitioners shall not be involved

in any decision-making of the Board. The

practitioners shall leave the room each time a

vote is taken or there is dissension among

board members. The practitioners shall be

required to desist from their work when any

possible conflict of interest arises. A

practitioner who has served for a one-year

term shall only be eligible for re-appointment

after three years have elapsed from his term of

duty.

(2) The Board shall be independent of

statutory auditors and audit firms.

(3) The Board shall act in a transparent

manner; this shall include the publication of

annual work programmes and activity reports.

(4) The system of public oversight

shall be adequately funded and shall have

adequate resources to initiate and conduct

investigations. The funding of the public

oversight system shall be secure and free from

any undue influence by statutory auditors or

audit firms.".

Article 7 of the principal Act shall be amended as follows

Amendment of

article 7 of the

principal Act.

(a)

paragraphs (j) and (k) of sub-article (1) thereof shall

be re-numbered as paragraphs (k) and (l) respectively;

(b) immediately after paragraph (i) of sub-article (1)

thereof, there shall be added the following paragraph

"(j) to inform any authority that it deems

appropriate of any sanctions or restrictions

imposed by it or any other matters that the Board

considers necessary to protect the public interest,

on any warrant holder and holders of a practising

certificate, audit firms and accounting firms;"; and

(c)

in paragraph (c) of sub-article (4) thereof, for the

words "and third-country audit entities." there shall be

substituted the words "and third-country audit entities;", and

immediately thereafter there shall be added the following new

paragraphs

"(d) suspended, revoked and withdrawn

warrants and practising certificates;

(e)

suspended, revoked and withdrawn

firm registrations;

(f)

defaulter warrant holders and holders

of a practising certificate;

(g)

defaulter audit and accountancy firms;

and

(h)

warrant holders and holders of a

practising certificate who have obtained an

exemption from Continued Professional Education

in terms of Directive 1 and are temporarily not in

practice.".

Passed by the House of Representatives at Sitting No. 347 of the

20th January, 2016.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives

€0.54