History of the Certified Public Accountants’ profession
According to the International Federation of Accountants, the services provided during the practice of their profession are related to the audit of the finances and management of any company and organization, public or private. Certified Public Accountants must possess thorough and documented knowledge, continuous training and education. Certified Public Accountants must practice their profession with complete independence, transparency and sense of responsibility. These qualifications help ensure the smooth realization of their audits and the reliability of their conclusions, always in accordance with the International Audit Standards and in the framework of the applicable legislation in each country in which they provide their services.
The Certified Public Accountants profession was introduced in Great Britain. Until the mid-19th century, accountants in England and Wales sufficed to retaining accounting books for the purchases and sales of their, entrepreneur, customers. However, the establishment of the “limited company” and the large scale construction and infrastructure projects in “Victorian England”, led to an increasing demand for Qualified Accountants, who could respond effectively to the increased complexity of accounting transactions related with assets depreciation, inventory valuation and the corporate legislation.
This trend led to the established of many Professional Associations and the union of some of these associations led to the establishment of the Institute of Chartered Accountants of England and Wales – ICAEW in London, in 1880.
History of the Certified Public Accountant profession in Greece
In our country, the history of the profession of the Certified Public Accountant is split in three time periods: the period before the introduction of the profession (1920-1956), the period of the Certified Public Accountants Organization operation and the period from 1993 to this day, when the Institute of Certified Public Accountants of Greece was established, according to the status in force in other EU countries.
The 1920 – 1956 period
During this time, audits of public limited companies’ financial statements were performed “typically” by auditors, limited to signing the reports already compiled by the companies’ Boards of Directors. The cause behind this limited role of auditors was the fact that these auditors were not professionals, since, according to the law at that time (cod. L. 2190/1920), no official education was required and anyone practicing any profession could become an auditor.
The 1957 -1992 period
In an effort to put an end to the arbitrariness of audits, the Organization of Certified Public Accountants was established (L.D. 3329/1955), starting its operation in November 1956. The Institute was vested with the audit of the financial statements of public limited companies, initially for the bigger ones and later including also the SMEs. The law indicatively stated the following:
- The appointment of a Certified Public Accountant as an employee performing a public function, not a civil servant
- The prohibition of the Certified Public Accountant’s involvement in his/her appointment as an auditor and in any relationship including financial interests, except for the Supervisory Board, which took responsibility for the admission of new members, the determination of their fixed fees, the determination of fees for any audits etc.
- The introduction of strict provisions prohibiting practicing the Certified Public Accountant profession simultaneously with any other profession and strict prerequisites with regard to the integrity and indisputable virtue to be held as essential qualifications by any Certified Public Accountant.
By this law, the Certified Public Accountant’s profession was governed by absolute independence and transparency.
The period from 1993 to this day
In 1992, the prevailing view argued that the Certified Public Accountant profession should be organized according to the standards of other countries in the European Union. Presidential Decree 226/1992 indicatively determined the following:
- The establishment of the Certified Public Accountants Organization
- The Institute’s bodies: General Assembly, Supervisory Board, Technical Board, Disciplinary Board.
- The registration of members serving at the Institute of Certified Public Accountants of Greece and their necessary qualifications
- The members’ admission levels
- Level promotion by special examinations.
The Hellenic Accounting and Auditing Standards Oversight Board (ELTE) was established in 2003 to audit the quality of obligatory accounting audits performed by Certified Public Accountants. In 2008, a respective law harmonized the Greek legislation related to the profession with the provisions of Community Directive 2006/43/EC of the European Parliament. This law governed the prerequisites for the granting of the license to practice the profession, the performance of examinations, the retention of a public registry of Certified Public Accountants, compliance with the principles of the Code of Professional Ethics of the International Organization (IFAC), compliance with the International Audit Standards, and disciplinary and civil liability.