The ATOL Reporting Accountants (ARA) Scheme came into effect for all specific ATOL reports on or after 1 April 2016.
ACCA members who act for ATOL holders need to ensure they are aware of the new regulations.
We have provided a recap of the scheme and details of the requirements to register as an ARA. There is also a summary at the end of this article of other recent changes in ATOL reporting that may affect ACCA members with ATOL holder clients.
Recap of the scheme
The ATOL Reporting Accountants' scheme was developed by the CAA in order to help improve the standard of ATOL reporting and to provide assurance that financial information which is submitted on behalf of ATOL holders is accurate. The scheme is designed to ensure that designated accountants of participating bodies are sufficiently knowledgeable about both the industry and specific requirements of ATOL to provide the required assurance needed by the CAA.
A number of professional accountancy bodies (ICAEW, ICAS, AAT, ACCA, IFA) are able to designate their members as ARAs subject to meeting certain requirements.
Note that this is for specific ATOL reports. So for instance where the accounts also require an audit, the ARA does not also need to be the auditor so current audit arrangements do not necessarily need to be altered. Similarly an accountant who helps the company with non-ATOL reporting could also be different to the ARA.
Two steps to becoming an ARA with ACCA
In order to become an ARA, ACCA members must register and complete the training required by CAA/ATOL. The training is completed via an online ATOL training module. Once the module has been completed the accountant can print the certificate online to provide to their professional accountancy body. The CAA will also provide all results of the training to the relevant professional accountancy bodies direct. To register, email CAA with your full name, the name of your professional accountancy body and your registration number with it. You will then receive login details to do the training for an 'ATOL Reporting Accountant'.
have taken and passed a professional examination covering assurance work as approved by the CAA. For ACCA members this is F8 Audit and Assurance or P7 Advanced Audit and Assurance or previous equivalents.
The accountant’s details will then be entered on to the ATOL Reporting Accountants list which is regularly updated. Deadlines ACCA members need to ensure that they are registered and licensed in good time to make the relevant ATOL reports. The first deadline may well be the new Annual Accountants’ Report (AAR) that must be signed-off by an ATOL Reporting Accountant (ARA). The new report came into effect on 1 April 2016.
ATOL holders will be required to provide the new AAR prior to their next ATOL renewal in either September 2016 or March 2017. Note that ATOL is emphasising that it will no longer accept the old style of AAR or any reports that are not signed-off by an ARA.
Other recent reporting changes New financial tests In 2014, the CAA consulted on proposals to extend a risk-based approach to the assessment of all ATOL holders. Based on analysis produced for the CAA by a credit rating agency, a new financial assessment for Standard ATOLs with licensable revenue under £20m and Small Business ATOLs (SBAs) was developed. An announcement was made on this in March. ATOL holders with £20m or more will continue to be subject to a more in-depth risk-based assessment and franchise member ATOL holders with 1,000 licensable passengers or fewer will not usually be financially assessed by the CAA.
The new assessment comes into effect on 1 June 2016. It reflects industry best practice in risk assessment by looking at a range of financial ratios to measure the strength of a business's financial resilience. The extent of the financial assessment depends on the size and type of licence held.
The financial criteria are set out in a new document with further information and FAQs available on the CAA website.
ATOL holders will be expected to meet the new criteria for the first time at their ATOL renewal in either September 2016 or March 2017:
Small business ATOL holders will have an ATOL limit of £1m licensable revenue as well as 500 passengers
The minimum ordinary share capital for incorporated businesses applying for a first ATOL (ie a new applicant), whether a Standard or an SBA, will be £30,000
The minimum bond for new applicants will increase to £50,000, reducing over the first 4 years of a licence. A revised ATOL bonding policy will be published on 1 June 2016.