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The Accountancy Profession (Amendment) Act, 2003 (Bill No 12)

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. (1) The short title of this Act is the Accountancy Profession
(Amendment) Act, 2003.
(2) This Act shall be read and construed as one with the Accountancy Profession Act, hereinafter referred to as “the principal Act”, and shall come into force on such date as the Minister responsible for finance may by notice in the Gazette establish, and different dates may be so established from different provisions or purposes thereof.
2. In subarticle (1) of article 2 of the principal Act>
(a) for the definition “ “accountant” and “auditor” ” there shall be substituted the following definition
“ “accountant” includes an individual or a partnership of accountants<”< and
(b) for the definition “prescribed” there shall be substituted the following>

Short title and commencement. Cap 281.

Amendment of article 2 of the principal Act.

C 892

Amendment of article 3 of the principal Act.

“ “prescribed” means prescribed by regulations under this
Act or by directives issued in terms of such regulations.”.
3. Article 3 of the principal Act shall be amended as follows> (a) for subarticle (1) thereof there shall be substituted the
following>
“ (1) No person shall practise the profession of accountant unless he is the holder of a warrant issued under article 4 of this Act.”<
(b) subarticle (2) thereof shall be deleted and subarticles (3) to (7) thereof shall be renumbered as subarticles (2) to (6) respectively<
(c) in subarticle (2) thereof as renumbered>
(i) for the words “under either of the articles aforesaid”
there shall be substituted the words “under article 4”< (ii) paragraph (a) therein shall be deleted< and
(iii) paragraphs (b) to (e) therein shall be renumbered as paragraphs (a) to (d) respectively<
(d) in subarticle (3) thereof as renumbered, for the words “auditor” wherever it appears, there shall be substituted the word “accountant”<
(e) in subarticle (4) thereof as renumbered>
(i) for the words “one hundred liri” therre shall be substituted the words “five hundred liri”<
(ii) for the words “five hundred liri” there shall be substitutted the words “two thousand five hundred liri”< and
(iii) for the words “ten liri” there shall be substitutted the words “fifty liri”< and
(f) in subarticle (5) thereof as renumbered, for the words “one thousand liri”, there shall be substituted the words “five thousand liri”.
4. For articles 4 and 5 of the principal Act there shall be substituted the following>
C 893

Substitution of articles 4 and 5 of the principal Act.

“Warrant to practise as accountant

Designation of

Warrant holders.

4. (1) A warrant to practise the profession of accountant shall be issued by the Minister on the recommendation of the Board to any person who satisfies the requirements of subarticle 3 (2).
(2) A person holding a warrant issued in terms of this article may in addition hold one or more certificates issued by the Board (hereinafter in this Act also referred to as “a practising certificate”) to practise in such fields of the profession of accountant, including auditing, as may be prescribed by the Minister, acting on the recommendation of the Board, and may not practise in such fields unless he holds the relative certificate.
(3) The Minister acting on the recommendation of the Board may make regulations prescribing the qualifications required for the issue of certificates in terms of subarticle (2) as well as to regulate their suspension or withdrawal.
5. (1) The holder of a warrant issued under article 4 shall be entitled to use the designation “Certified Public Accountant” as well as the abbreviation “CPA”
(2) Any person who, not being the holder of a warrant referred to in subarticle (1), assumes the designation or abbreviations therein indicated or in any other manner indicates that he is entitled to practise the profession of accountant in Malta, shall be guilty of an offence and shall be liable on conviction to a fine (multa) not exceeding one thousand liri and in respect of a second or subsequent conviction to imprisonment for a term not exceeding three months or to both such imprisonment and the said fine (multa) not exceeding one thousand liri.”.
5. Article 6 the principal Act shall be amended as follows>
(a) for subarticle (2) thereof there shall be substituted the following>
“(2) The chairman and two of the other six members shall be persons of recognised standing and experience in business matters or in industrial relations or in the public

Amendment of article 6 of the

principal Act.

C 894

Amendment of article

7 of the principal

Act.

service< the other four members shall be holders of a warrant issued under article 4 and shall be persons of experience in academic or professional matters. Three of these other four members shall be appointed by the Minister, one after consulting the University of Malta and from among a list of not les than two persons nominated by the said university from among the teaching staff of the Faculty or Faculties in which Teaching of and research in the field of accountancy is organised, and the other two members after consulting the association or associations, if any, for the time being recognised as approved accountancy bodies, and from a list of not less than four persons nominated by such associations to represent them.”<
(b) immediately after subarticle (5) thereof, there shall be added the following subarticle>
“(6) In order to carry out its functions the Board shall make use of such funds as the Minister may from time to time make available to it as well as such funds as it may under regulations made under this Act collect as fees or otherwise.”.
6. Article 7 of the principal Act shall be amended as follows> (a) for subarticle (1) thereof there shall be substituted the
following>
“(1) The Board shall regulate the accountancy profession in the public interest and shall have the functions>-
(a) to consider applications for the issue of warrants under article 4 and to make its recommendations thereon to the Minister<
(b) to deal with cases of professional misconduct and other disciplinary proceedings in respect of certified public accountants including cases leading to the suspension or withdrawal of any warrant or practising certificate issued under this Act<
(c) to advise, or make recommendations or otherwise express its views to the Minsiter on any matter on which the Minister is to consult with the Board or on which the Board is to make recommendations to the Minister or on which the views of the Board are sought by the Minister<
(d) such other functions as are or may be assigned to it by this or any other law or as may be delegated to it by the Minister.”<
(b) in subarticle (2) thereof the words “paragraph (c) or (d)
of” shall be deleted<
(c) in subarticle (3) thereof for the words from “such list shall include” to the words “of their respective partners” there shall be substituted the following “such list shall include such details in respect of warrant holders and of partnerships of warrant holders as may be prescribed.”<
(d) immediately after sub-article (3) thereof there shall be added the following sub-articles (4) and (5)>
“(4) The Board shall exercise its functions under paragraph (b) of subarticle (1) through Disciplinary Committees appointed in respect of each particular proceeding and which shall in each case be composed of five members appointed by the Board as to two from a list of not less than ten persons submitted to the said Board each year by approved accountancy bodies and as to the remaining three members, at least one shall be person holding a warrant under article 4 who has practised his profession for such period as may be prescribed. The Board shall appoint one of the said members being a warrant holder or a person who had been a warrant holder to be the chairman of the Board.
(5) The Board may with the agreement of the Minister delegate, under such terms and conditions as it may deem appropriate and subject to its overall supervision or control, any of its functions, other than those under paragraph (b) of subarticle (1) or those under article 4, to an approved accountancy body.”.
7. Article 8 of the principal Act shall be amended as follows> (a) for the words “after consulting the Board” there shall
be substituted the words “on the recommendation of the Board”<
(b) for paragraph (b) therein, there shall be substituted the following>
“(b) the professional conduct of accountants, codes of ethics, standards of competency and integrity and
C 895

Amendment of article 8 of the principal Act.

C 896

Amendment of article 9 of the principal Act

independence to be kept by the profession, quality assurance as well as mandatory continued professional education<”<
(c) in paragraph (c) therein immediately after the words
“issue of” there shall be inserted the words “guidelines”<
(d) for paragraphs (i) and (j) therein, there shall be substituted the following>
“(i) the procedures to be followed in cases of professional misconduct or other disciplinary proceedings<
(j) the manner in which experience for the purposes of paragraph (d) of subarticle (2) of article 3 or which may be required to obtain practising certificates under article 4, and the persons who may supervise such practice and experience<
(k) the provision of such information as may be required from warrant holders by the Board in order to enable it to carry out any of its functions under this Act<
(l) the procedure of the Board< and
(m) the punishments, penalties and other consequences and effects to which a person may become liable or may take place in the event of any contravention or non-compliance with any provision of any regulations or directive issued under or pursuant to this article< so however that no punishment so prescribed may exceed a fine (multa) of ten thousand liri, or imprisonment for a term of one year with or without such fine, or in the case of a continuing offence a fine (multa) of fifty liri for each day on which the offence continues, whether or not in addition to the punishment aforesaid.”.
8. Article 9 of the principal Act shall be amended as follows> (a) in subarticle (1) thereof
(i) for the words “after consulting the Board” there shall be substituted the words “on the recommendation of the Board”<
(ii) for the words “if he is satisfied” there shall be substituted the words “if the Board is satisfied”< and
(iii) for the words “all citizens of Malta” there shall be substituted the words “all persons”< and
(b) in subarticle (2) thereof>
(i) for the words “the Minister may in granting” there shall be substituted the words “the Minister may, on the recommendation of the Board, in granting”< and
(ii) for the words “after consulting the Board” there shall be substituted the words “on the recommendation of the Board”.
9. Article 10 of the principal Act shall be amended as follows> (a) in subarticle (1) thereof>
(i) for the words “two or more certified public accountants”, there shall be substituted the words “two or more persons”<
(ii) the words fron “or two or more certified” to the words “both auditors and accountants” shall be deleted<
(iii) the words from “or, as the case may be” to the words “of auditors”)” shall be deleted<
(iv) for the words “ the objects of the partnership.”, there shall be substituted the words “ the objects of the partnership>”< and
(v) immediately at the end thereof there shall be added the following proviso<
“Provided that where the practice by a warrant holder of a field of the profession of accountant requires the holding of a certificate under article 4 (2), such a partnership may only practise in such field under such conditions as may be prescribed>
Provided further that where a partnership may exercise in any such field it may indicate such fact in or together with the partnership name.”<
C 897

Amendment of article 10 of the principal Act.

C 898
(b) subarticles (3) to (7) shall be renumbered as subarticles
(4) to (8) respectively<
(c) for subarticle (2) there shall be substituted the following subarticles (2) and (3)>
“(2) No person may be a partner in a partnership of accountant unless>
4< or
(a) he holds a warrant issued under article
(b) he holds a degree obtained after a course of instruction having a duration of at least three years full time or its equivalent, at the University of Malta or at an other institution recognised by the Board for the purpose, or otherwise satisfies the Board that he holds comparable qualifications, and in each case subjects himself to such rules applicable to accountants as may be prescribed.
(3) In a partnership of accountants, persons who are qualified as provided in paragraph (a) of subarticle (2) shall>
(a) comprise not less than sixty percentum of the partners<
(b) constitute more than fifty percentum of the partnership’s administrative or management body< and
(c) hold more than fifty percentum of the voting rights in the partnership>
Provided that in a partnership of accountants which is authorised to practise in the field of auditing with respect to paragraph (b) and (c) above the reference to persons qualified in terms of paragraph (a) of sub-article (2) were a reference to such persons who also hold such certificate as may be prescribed under article 4 (2) to practise in the field of auditing.”<
(d) in subarticle (4) thereof as renumbered, the words “ or as certifed public accountants and auditors, or both as the case may require” shall be deleted, and for the words from “one of the designations” to the words “or “CPAAs” ” there shall be substituted the words “to
use the designation of certified public accountants and the abbreviation “CPAs”, as well as where applicable, to bring to the notice of the public the fact that it may practise in any field of the profession of accountant for which a certificate may be required under article 4 (2).”<
(e) in paragraph (a) in subarticle (6) as renumbered for the words “any act or thing that may be done” there shall e substituted the words “without prejudice to any restrictions on any partners or any special responsibility on any partners that may be prescribed with respect to partnerships of accountants which may practise in a field of the profession of accountant where the holding of a certificate may be required under article 4 (2), any act or thing that may be done”< and
(f) in subarticle (7) as renumbered<
(i) for the words “or “certifed public accountants and auditors or their abbreviation “CPA’s” of “CPAAs” “ shall be substituted by the words “or its abbreviation “CPAs” and, or, bringing to the notice of the public the holding of any particular certificate”<
(ii) for the words “a partnership of accountants or of auditors” there shall be substituted the words “of such a partnership”<
(iii) for the words “one hundred liri” there shall be substituted the words “one thousand liri”<
(iv) for the words “five hundred liri” there shall be substituted the words “five thousand liri”<
(v) for the words “ten liri” there shall be substituted the words “one hundred liri”.
10. Article 11 of the principal Act shall be amended as follows> (a) in subarticle (1) thereof>
(i) the words “or as auditor” and “or as auditors” shall be deleted> and
C 899

Amendment of article 11 of the principal Act.

C 900

Substitution of article 12 of the principal Act.

(ii) for the words “ two or more such persons” there shall be subsituted the words “two or more persons”<
(b) in paragraph (a) of subarticle (3) thereof, the words “or of auditors”, “or auditor” and “or auditor, as the case may be” shall be deleted<
(c) in paragraph (c) of subarticle (3) the words “or the warrant of auditor” and “or auditors” shall be deleted and for the word “professions” wherever it appears” there shall be substituted the word “profession”<
(d) in subarticle (4) for the words “insurance policy” there shall be substituted the words “insurance policy, and shall declare to the Board that such level of insurance cover amounts to not less than such minimum level as may be prescribed”<
(e) in subarticle (5) thereof, for the words “five hundred liri” and “fifty liri” there shall be substituted respectively the words “two thousand and five hundred liri” and “two hundred and fifty liri”< and
(f) in subarticle (6) thereof the words “or as auditor” shall be deleted, and for the words “five thousand liri” there shall be substituted the words “twenty five thousand liri”.
11. For the article 12 of the principal Act, there shall be substituted the following>

“Prohibited agreements.

12. Any agreement or other arrangement, as may be prescribed by the Minister, purporting to exempt an accountant generally or an accountant who holds a certificate as is refered to in subarticle 4 (2), from any liability, responsibility or duty relative to the practise of the profession of accountant generally or the practice in any field where a certificate as aforesaid may be required, or except under a policy of insurance made out under article 11, to identify him against any such liability or responsibility, shall be null and void.”.

Repeal of article 13 of the principal Act

Amendment of article 14 of the principal Act

12. Article 13 of the pincipal Act shall be repealed.
13. Article 14 of the prinicpal Act shall be amended as follows> (a) immediately after the word “warrant”, wherever it
appears, there shall be inserted the words “or practising certificate”<
(b) in subarticle (1) thereof>
(i) immediately after the words “the Minister” there shall be inserted the words “ on the recommendation of the Board”<
(ii) in paragraph (a) therein for the words “ the Board” there shall be substituted the words “the Disciplinary Committee appointed under subarticle 7 (4)”< and
(iii) immediately after the word “fraud” in subparagraph (b) (ii) therein, there shall be added the words “or of any crime punishable by a term of unprisonment exceeding one year”<
(c) in subarticle (2) thereof>
(i) in paragraph (a) therein immediately after the word “partnership” there shall be inserted the words “, addressed to the Board”< and
(ii) in paragraph (b) therein for the words “whenever the Minister” there shall be substituted the words “whenever the Board”<
(d) in subarticle (3) thereof for the words “the Board” wherever they appear, there shall be substituted the words “ the said Disciplinary Board”<
(e) in subarticle (4) thereof, for the words “the Minister after consulting the Board” there shall be substituted the words “the Minister, on the recommendation of the Board”< and
(f) in subarticle (5) thereof>
(i) the words “or section 5” shall be deleted< and
(ii) for the words “as he may deem” there shall be subsituted the word “ as he may, on the recommendation of the Board, deem”.
14. Article 15 of the principal Act shall be amended as follows> (a) Sub-article (2) thereof shall be substituted by the
following>
C 901

Amendment of article 15 of the principal Act.

C 902
“(2) For the purposes of subarticle 5 (2) and of subarticle 10 (7), the use on any card, letter head, sign, board, plate, advertisement or other written, printed or engraved device, instrument or document, of the words “certified public accountant” or its abbreviation “CPA”, whether in its singular or plural form, in relation to a name, shall be sufficient evidence of the knowledge of such use by the person in relation to whose name the said words or abbreviations are used, unless such person proves that the use was made without his knowledge and that upon becoming aware of the use he took adequate steps to stop it.”<
(b) paragraph (a) of subarticle (3) thereof shall be substituted by the following>
“(a) a person shall not be deemed to exercise the profession of accountant if he acts simply as an employee of, or assistant to, a certified public accountant or a partnership of accountants, and does not issue any accounting or financial statement over his name<”<
(c) in paragraph (b) of subarticle (3) thereof, the words “or to act as auditor” shall be deleted< and
(d) immediately following subarticle (3) thereof, the following new subarticle (4) shall be inserted>
“(4) The conduct by the Board of proceedings for professional misconduct and other disciplinary proceedings in terms of article 7 of this Act shall be without prejudice to any proceedings which may be taken against the person concerned under the provisions of the Criminal Code or of any other law and any proceedings so taken shall be without prejudice to any procedings that may be taken by the Board.”.

Objects and Reasons

The object of the Bill is to reform the accountancy profession in line with modern trends abroad.
C 903

Ippubblikat mid-Dipartiment ta’ l-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press

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