MUTUAL RECOGNITION OF PROFESSIONAL TITLES IN THE CONTEXT OF FREE TRADE AGREEMENTS

Transcription

1 MUTUAL RECOGNITION OF PROFESSIONAL TITLES IN THE CONTEXT OF FREE TRADE AGREEMENTS Presented to CReCER Regional Conference on Accounting and Accountability for Regional Economic Growth San Salvador June 11-13, 13, 2008

2 Dr. Kay Carnes, CPA Member, U.S. International Qualifications Appraisal Board Associate Dean, Coordinator of Accounting Programs School of Business Administration Gonzaga University

3 What is a Mutual Recognition Agreement (MRA)? A reciprocal agreement between governments or non-governmental professional bodies that indicates acceptance of the equivalence, compatibility or acceptability of the other jurisdiction s s regulatory standards for a particular group of professionals.

4 Authority Trade in services language in NAFTA GATS CAFTA

5 PURPOSE To facilitate international reciprocity for professional accountants by recognizing accounting credentials issued by the accounting professions of other countries; One who has proven competence in one jurisdiction should be capable of licensing in another

6 How is reciprocity defined? MRAs are only negotiated where similar provisions will be granted by both sides. MRAs pertain only to those accountants who are entitled to issue reports upon financial statements.

7 Benefits of Recognition Increases market access for professional service providers Facilitates mutual learning Elevates professional standards Helps economies to exchange regulatory experiences Improves quality and uniformity of domestic regulatory measures

8 What MRAs are in place? U.S. IQAB has effected MRAs with the following: Under GATS: The Institute of Chartered Accountants in Australia The Certified Practicing Accountants of Australia The Institute of Chartered Accountants in Ireland Under NAFTA: (tripartite agreement renewed April 17, 2008) The Canadian Institute of Chartered Accountants The Instituto Mexicano de Contadores Publicos

9 Appraisals are in progress or have been considered from several other countries including the United Kingdom, the Philippines, Hong Kong, India, New Zealand, and Saudi Arabia.

10 U.S International Qualifications Membership Appraisal Board (IQAB) (Established early 1990s) NASBA represents state boards of accountancy AICPA represents the accounting practitioner Role: Reviews accounting qualifications of other countries Negotiates reciprocity agreements with foreign accounting organizations Makes reciprocity recommendations to state licensing boards

11 APPRAISAL GUIDELINES U.S. IQAB has established a process for conducting appraisals using criteria comparable to those which U.S. CPAs must meet to become certified. (4 E s) E Cultural, business and economic environment Education requirements Method and scope of professional examination(s) Practical experience

12 When appraising an applicant country s examination process, U S IQAB takes into account the body of knowledge required of accountants of other countries. Sufficient accounting similarities should exist in order for qualification for reciprocal practice. Increasing use of International Standards is bring this closer.

13 What is the International Qualifications Examination (IQEX)? An examination that evaluates the professional competence, from a U.S. perspective, of accountants from foreign jurisdictions determined by U.S. IQAB to have education, examination, and experience standards substantially equivalent to those of U.S. CPAs IQEX tests reciprocity applicants on their knowledge of U.S. professional standards, taxation, and business law.

14 Why Recognition Is Important? In a global economy, international reciprocity in professional licensure facilitates the flow of professional services across international borders.

15 Who enters into MRAs? GOVERNMENTS INDUSTRY or TRADE ASSOCIATIONS

16 U.S. IQAB Q & A