BACKGROUND NOTE ON ACTION PLANS

Transcription

1 BACKGROUND NOTE ON ACTION PLANS Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment Questionnaire. They form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of the accountancy profession around the world. Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and will be subject to periodic review and update. Refer to responses to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self- Assessment Questionnaire provide background information on each member and associate their environment and existing processes. These responses may be viewed at: Use of Information Please refer to the Disclaimer published on the Compliance Program website. ACTION PLAN IFAC Member/Associate: Approved by Governing Body: National Council, Approved: June 9, 2011 Published: July 8, 2011

2 GLOSSARY ARB Accountants Registration Board CPAPNG Certified Practising Accountants, Papua New Guinea IAASB International Auditing and Assurance Standards Board IAESB International Accounting Education Standards Board IASB International Accounting Standards Board IES International Education Standard IESBA International Ethics Standards Board for Accountants IFAC International Federation of Accountants IFRS International Financial Reporting Standards IPSAS International Public Sector Accounting Standards IPSASB International Public Sector Accounting Standards Board ISA International Standard on Auditing ISQC1 International Standard on Quality Control 1 SMO Statement of Membership Obligation Page 2 of 13

3 SMO 1 Quality Assurance Continue to use best endeavors to promote the need for the introduction of a QA process as a means to monitor members compliance with auditing standards. In Papua New Guinea, the responsibility for quality assurance of all accountants, auditors and liquidators rests with the Accountants Registration Board (ARB) in accordance with the Accountants Act, The Accountants Registration Board controls the registration of Accountants in Employment, Public Accountants, Company Auditors and Liquidators and makes the rules for the regulation and prescription to the practice of accountancy and the procedures to be adopted by the various categories of accountants. The Board makes the rules: a. prescribing the minimum qualifications (including experience) for registration in the categories of registration; b. prescribing the accounting and auditing standards as fixed by the Board to be adopted by all accountants in Papua New Guinea; c. determining a recommended scale or scales of fees, costs and charges in relation to accounting practice; and d. setting out the code of professional ethics by which all Accountants in Employment, Registered Pubic Accountants, Registered Company Auditors and Registered Liquidators are to be bound. In making these rules, the Board is required to consider any recommendations made to it by or any association recognized by the Board as representing accountants, auditors and liquidators in PNG. Ensure ongoing development and promulgation of ethical and professional standards # Start Actions Completion Responsibility 1. Maintain a Register of Members Ex, Membership Officer 2. Q Raise awareness of SMO1 by using best endeavors to promote to the Accountants Registration Board the implementation of the International Standard on Quality Control (ISQC1) and ISA 220 and the need for the establishment of a quality review program for public practitioners. Q Joint ARB & CPAPNG Committee Joint funding arrangement or seek Government funding 3. Continue to advocate to ASB, the need for the introduction of a QA process as a means to monitor ASB & CPA PNG Secretary ASB & Exec Page 3 of 13

4 members compliance with auditing standards. Maintaining Processes 4. Run seminars on the practical application of selected Ex Dir Academic & User-pay auditing standards. 5. Publicise in the website a list of auditing standards Joint IFAC website and CPAPNG inhouse Q and regulations to ensure that members have access to Q CPAPNG/ IT facilities information that assist them to keep abreast of the latest compliance requirements. ARB Committee 6. Q Work in collaboration with the ARB to issue an Audit Manual and Toolkit for auditors in Papua New Q JCPAPNG & ARB Comm CPAPNG & ARB staff and inhouse resources Guinea. 7. Q Run workshops on the Audit Manual and Toolkit. Q JCPAPNG & ARB Comm 8. Q In collaboration with ARB, develop and issue guidelines to members on auditing. Q JCPAPNG & ARB Comm Seek Government funding to drive this Use best endeavors to influence changes to the Accountants Act seeking to include requirements for certification as a Public Practitioner and the establishment of a Quality Assurance Program to be conducted by. Q JCPAPNG & ARB Comm CPAPNG in-house staff and resources Review of s Compliance Information 10. Q Perform periodic review of s responses to the IFAC Compliance Self Assessment questionnaires and update any sections relevant to SMO1 as necessary, informing IFAC compliance staff, in order for them to publish updated information. National Council and CPAPNG in-house staff and resources/ Council Page 4 of 13

5 SMO 2 International Education Standards for Professional Accountants and Other IAESB Guidance Continue to work towards full compliance with SMO2 Section 67 of the Accountants Act requires employers to register prospective employees with prior to commencement of work assignments. To register with, the aspiring applicant (whether local or expatriate) must have completed a diploma or degree from an approved tertiary institution, listed on the website. Fresh graduates are registered as Registered Graduates and streamed either as Accounting Technicians or Certified Practising Accountants upon completion of the Professional Program which entails the study and passing of the following suite of subjects: Accounting Technician Competency (Pre-requisite to other subjects) Financial Accounting I Financial Accounting II or [Financial Reporting] Management Accounting or [Strategic Management Accounting] Knowledge Management Auditing or [Assurance Services] Taxation Law and Practice Business Law Professionalism and Professional Ethics After three years of joining, an incumbent of an approved position who has not completed the CPA examinations may elect to become an Accounting Technician by passing the Accounting Technician Competency Examination. CPAs and Accounting Technicians are required to complete a minimum of 20 structured hours and 20 unstructured hours of Continuing Professional Education annually to maintain membership of. Continue to review and assess educational entry requirements to ensure compliance with IES # Start Actions Completion 1. Carry out policy dialogue on the SMO2 requirements Q with the universities and institutes in Papua New Guinea offering accounting programs to ensure that the program of studies offered are consistent with IES and IAESB pronouncements and requirements. Responsibility Council CPAPNG in-house staff and resources to host workshops Page 5 of 13

6 2. Develop a Core Competency Framework for entry into the Accounting Profession for the guidance of tertiary institutions in the development of curricula. Professional Education Program Structure 3. Continue to review the professional education program structure to ensure compliance with IES requirements. 4. Continue dialogue with CPA Australia on the provision of modules for the professional education program. Continuing Professional Education 5. Continue to provide an annual CPE program to assist members to fulfill their CPE obligations. 6. Put in place a process of random audit to ensure compliance with CPE requirements. Review of s Compliance Information 7. Q Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO2 as necessary. Once updated inform IFAC Compliance Staff to republish updated information. Q Council & OHE Council Council National Council and CPAPNG in-house staff and resources to host workshops, seek gov t funding CPAPNG in-house staff and resources resources s & Volunteers from practicing firms Council CPAPNG in-house staff and resources/ Council Page 6 of 13

7 SMO 3 International Standards, Related Practice Statements and Other Papers Issued by the IAASB Continue to use best endeavors to assist with the adoption and implementation of IAASB Pronouncements in Papua New Guinea The Accounting Standards Board ( ASB )of Papua New Guinea is a regulatory body corporate established under the Companies Act 1997 (Part IX, Division 5) with the functions: to develop, approve, amend and revoke financial reporting standards for the purpose of the Act; to make determinations on the application of any approved financial reporting standards; and to give directions as to the accounting policies that has authoritative support within the accounting profession in Papua New Guinea. To approve and accept the international standards on auditing (ISAs). Directions issued by the ASB as to accounting policies that have authoritative support within the accounting profession are to be termed ASB Directives and policy statements, and form part of generally accepted accounting practice ( GAAP ) in Papua New Guinea. The ASB is administratively housed within in the Business Registrations and Regulation Division ( BRRD ) of the Investment Promotion Authority of Papua New Guinea and is managed by the ASB Secretariat under the Chairmanship of the Registrar of Companies. It operates as a unit or section in the division and has established close and mutual working relations with other important stakeholders and entities which pursue similar interests. The key stakeholders include the Certified Practising Accountants Papua New Guinea ( ), Accountants Registration Board ( ARB ), Auditor-General s Office, accounting practising firms, law firms and so on. The board plays important statutory roles through setting, approval, enforcing and/or revocation of accounting standards and accounting policies (GAAP) that has authoritative support in the country pursuant to the Sections 205, 206 & 207 of the Companies Act 1997 (the Act ). The adoption or approval of international standards on auditing ( ISAs ) is decided by the board which also approves IASs, IFRSs and any other relevant statements issued by the IASB that form part of GAAP. All financial statements in Papua New Guinea must be audited in accordance with the ISAs. Maintaining Processes # Start Actions Completion 1. Continue to notify members of IAASB Standards and Q Pronouncements and maintain links in the Responsibility Exec CPAPNG & CPAPNG Council Page 7 of 13

8 website to the IASB site and to the standards. 2. Influence the ASB to issue interpretations and guidance on relevant standards in the PNG context. 3. Conduct CPE training for Auditors on ISAs, including clarified ISAs. Q stakeholders Exec CPAPNG Exec CPAPNG CPAPNG Council / Secretary ASB Secretariat CPAPNG Council, Auditor General & Practitioners Review of s Compliance Information 4. Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO3 as necessary. Once updated inform IFAC Compliance Staff to republish updated information Council Page 8 of 13

9 SMO 4 IESBA Code of Ethics for Professional Accountants Adopt the revised version of the IESBA Code of Ethics and support its implementation has fully adopted the 2006 version of the IESBA Code of Ethics for Professional Accountants as the standard to guide the conduct of accountants in Papua New Guinea. In areas not covered by the IESBA Code of Ethics, the Council of may if it deems necessary, develop additional ethical requirements on matters of relevance in Papua New Guinea. All members of are required to comply with the Code of Ethics adopted. Apparent failure to do so may result in investigation into the member s conduct by the Accountants Statutory Committee in accordance with the Accountants Act 1996 and amendments. Maintain Processes # Start Actions Completion 1. Q Review the IESBA Revised Code of Ethics for Professional Q Accountants which comes into effect on 1 January 2011 and use best endeavors to adopt this version as s Code of Ethics. 2. Q Use IFAC template to compare the revised requirements with Q the requirements of the version currently in force and advise members accordingly. 3. Q Make the Revised Code of Ethics for Professional Accountants Q readily accessible to members by circulating copies and by publication in the website. 4. Schedule regular seminars and workshops to inform members of the Code of Ethics and their obligations under it. Responsibility Council Council Council Council Review of s Compliance Information 5. Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO4 as necessary. Once updated inform IFAC Compliance Staff to republish updated information. Council Page 9 of 13

10 SMO 5 International Public Sector Accounting Standards and Other IPSASB Guidance Promote ongoing adoption of IPSAS and other guidance issued by the IPSASB The government of Papua New Guinea has adopted the Cash Basis IPSA and at this point in time there are no plans yet to adopt full accrual budgeting and accounting in the PNG Public Sector. Maintain ongoing processes # Start Actions Completion 1. Q Recommend to the Minister of Finance adherence to Q timely and accurate reporting in accordance with Mandatory Part 1 of IPSAS on Financial Reporting Under Cash Basis of Accounting. 2 Q Use best endeavors to initiate dialogue with Policy Q makers to create awareness of the activities of IPSASB, including and promotion of the IPSAS Standards. Review of s Compliance Information 3 Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO5 as necessary. Once updated inform IFAC Compliance Staff to republish updated information. Responsibility CPAPNG Council & Finance Department, Donors CPAPNG Council & Finance Department, Donors Council Page 10 of 13

11 SMO 6 Investigation and Discipline Use best endeavors to ensure ongoing compliance with SMO 6 and maintenance of an effective and just investigation and discipline system The Accountants Act 1996 delegates the functions of investigation and discipline of accountants to the Accountants Statutory Committee comprising the Chair of s Membership, Ethics and Discipline Committee, no fewer than three practicing Accountants with qualifications specified in the Accountants Registration and Practice Rules, an academic and a lawyer in private practice, all appointed by the ARB. The role of the Membership, Ethics and Disciplinary Committee is to approve membership applications, deal with membership issues and recommend to the Accountants Statutory Committee any ethical and disciplinary actions. Members in breach of our rules when brought to the attention of this Committee are asked to respond to such within 14 days. After their response or where there is no response the Committee evaluates the response/matter and if the matter is severe the member is referred to the Accountants Statutory Committee that commences the disciplinary process. Disciplinary matters involving members that are before the Courts of Law are not deliberated until the outcome of the legal proceedings are known. To date a good number disciplinary cases have been referred to the Accountants Statutory Committee that terminated their membership but the members concerned have appealed the decision to remain. Failure to comply with ethical requirements or inability to justify behavior which is not in alignment with the Code of Ethics may constitute professional misconduct that could result in disciplinary action. Maintain ongoing processes # Start Actions Completion 1. Use best endeavors to guide members in respect to their membership obligations in upholding ethical and professional conduct at all times. Responsibility CPAPNG Membership Ethics & Disciplinary Committee 2. Use best endeavors to ensure that proper and effective disciplinary mechanisms are put in place to guide the Membership, Ethics and Disciplinary and the Accountants Statutory Committee in upholding ethical and professional conduct by members. CPAPNG Membership Ethics & Disciplinary Committee & Accountants Statutory Committee Page 11 of 13

12 3. Use best endeavors to monitor and support the Accountants Statutory Committee to reinforce the requirements of SMO6 and maintain a record of cases heard by the Committee. 4. Q Consult the requirement of SMO6 and consider ways in which CPAPNG can implement a disciplinary mechanism for its own members that is compliant with these requirements and serves as an example of the international standard. 5. Q Consider how CPAPNG can assist with awareness-raising around the investigation and disciplinary process of the Accountants Statutory Committee. Q Q CPAPNG Membership Ethics & Disciplinary Committee & Accountants Statutory Committee CPAPNG Council & ARB Council Review of s Compliance Information 6. Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO6 as necessary. Once updated inform IFAC Compliance Staff to republish updated information. Council Page 12 of 13

13 SMO 7 International Financial Reporting Standards Assist with ongoing adoption and implementation of IFRS The Companies Act 1997 gives responsibility for setting accounting standards to the Accounting Standards Board (ASB). CPAPNG is represented on the ASB and has adopted IFRS as standards required to be followed by its members in conducting audits of financial statements. The full suite of IFRS has been adopted in Papua New Guinea. PNG has also announced its intention to adopt. IFRS for SMEs with effect from 1 January New Development # Start Actions Completion Responsibility 1. Q Conduct IFRS for SMEs workshops and seminars for members. Q Maintaining Processes 2. Use best endeavors to continuously inform members of developments in IFRS through mail and via the CPAPNG website. 3. Use best endeavors to inform the stakeholders of the IFRS compliance requirements highlighting the benefits of compliance. 4. Continue to support ongoing adoption and implementation of IFRS by highlighting their relevance and the importance of their application in financial reporting through seminars, workshops and CPD sessions. Continue to purchase and distribute the IFRSs annually from IASB for inclusion in the financial reporting papers. Review of s Compliance Information 5. Perform periodic review of s response to the IFAC Compliance Self-Assessment questionnaires and update sections relevant to SMO7 as necessary. Once updated inform IFAC Compliance Staff to republish updated information. CPAPNG Council/ ASB CPAPNG Council/ASB CPAPNG Council/ASB CPAPNG Council/ASB Council Page 13 of 13