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ACCA Applied Knowledge · Business and Technology · The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession

Which of the following best describes the difference between a professional body and a statutory regulator in the accountancy sector?

A professional body derives its authority from membership and its own charter or rules, whereas a statutory regulator derives its authority from legislation. This means a statutory regulator's powers can extend beyond members, unlike those of a professional body.

  1. AA professional body can only regulate audit firms, while a statutory regulator regulates individuals
  2. BA professional body is funded by the government, while a statutory regulator is funded by members
  3. CA professional body derives authority from membership and its charter or rules, while a statutory regulator derives authority from legislationCorrect
  4. DThere is no difference as both have identical legal powers over non-members

Explanation

Professional bodies rely on membership and their own rules, so their powers apply to members and students. Statutory regulators are given powers by law and can apply them more widely, for example to anyone carrying out regulated activities. The other options misstate funding and scope.

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