MRA with ICAS Signed

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Since 1995, the NASBA/AICPA International Qualifications Appraisal Board has been talking about the desirability of forging a mutual recognition agreement (MRA) with the professional body in Scotland. Happily, a mutual recognition agreement (MRA) with the Institute of Chartered Accountants of Scotland was signed on February 27 by ICAS Chief Executive Officer Anton Colella, AICPA CEO Barry Melancon and NASBA CEO Ken Bishop. The agreement is being sent to the State Boards with the recommendation that they adopt it for application in their jurisdictions. It can be found on www.nasba.org.

NASBA Chair Theodore Long thanked IQAB volunteers and staff who have worked with ICAS, NASBA and AICPA leadership to develop this agreement. President Bishop stated: “It is remarkable that it has taken decades to reach this historic agreement positively impacting the accounting professions of the United States and Scotland. I applaud the tremendous effort and perseverance of the staff and volunteers of the respective organizations to finalize this crucial agreement. We appreciate the participation and support of the UK’s FRC [Financial Reporting Council] in this endeavor. The relationships developed during this process will serve us well as we work together on future agreements.”

ICAS CEO Colella, who spoke at NASBA’s 2017 Annual Meeting, noted this agreement “comes at a pivotal point for the UK. It not only creates new opportunities in the world of transatlantic trade, but also reinforces the high standing in which we hold our American colleagues, and the expertise they value in us.”

Under the terms of the agreement, a professional who holds a baccalaureate, has completed the ICAS CA Qualification Program and has two years of relevant practical work experience after becoming a chartered accountant can take the US International Qualification Examination (IQEX) to apply to a State Board to become a U.S. CPA. For the U.S. CPA, the agreement also calls for two years of post-qualification practical work experience to earn the Chartered Accountant designation, but that may be earned in the United States, unlike what some other designations require. Then to have the ability to sign an audit report for the equivalent of a public company in the United Kingdom, the individual will need to become a “responsible individual,” which requires working for a period in the UK.

“We recognize there are still gaps to be filled before this agreement is renewed in five years,” NASBA/AICPA International Qualifications Appraisal Board Chair Sharon Jensen (MN) said. “Policy changes are anticipated in the United Kingdom that should help us bridge these gaps.” The MRA states:

“Under the UK Companies Act 2006, ICAS has the status of Recognised Supervisory Body (RSB), allowing ICAS to award Responsible Individual (RI) status to holders of the CA designation who also hold the UK Audit Qualification and a current PC.

“Within the term of this agreement:
“1- ICAS undertakes to seek a determination from the FRC to grant ICAS a dispensation to recognize practical audit experience obtained in the US towards the above noted practical audit experience requirements for the UK Audit Qualification.
“2- ICAS will work with the FRC to facilitate the recognition of US CPAs under the UK Companies Act during the negotiations on the UK’s departure from the European Union.
“3- ICAS will report an annual update to the IQAB on progress in these matters.”

This is the first new MRA to be established via IQAB in several years. Others are currently being studied.