Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Association of Accountants and Auditors of Armenia

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Republic of Armenia


    2. Name of member body:
      Association of Accountants and Auditors of Armenia

      Or please specify name:



    3. Individual responsible for preparation:
      Hovhannes Harutyunyan, Executive Director


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      /



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      n/a



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Civil Code of Republic of Armenia (and laws)
      b). the Enacting body: Parliament of Republic of Armenia
      c). date the Act or Code came into force: 01 / 1999


    25. How can IFAC obtain a copy of the Act or Code?
      www.parliament.am


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Civil Code of RA includes only general basic requirements which are detailed further in Laws. The Civil Code mentions financial reporting mandatory requirement only for Joint Stock companies. Again, Law on Joint Stock companies requires JSC to prepare and publish audited financial reports (Law on Joint Stock companies, Chapter 13, Article 94, and Article 96). However, Law on Accounting mandatory requires “all legal entities, branches and representative offices of foreign organizations that have obtained state registration” to maintain accounting records (Law on Accounting, Chapter 2, Article 5, §2) and prepare and submit annual statutory financial statements, that is, balance sheet, income statement, statement of changes in equity, cash flow statement and notes to financial statements (Law on Accounting, Chapter 4, Article 20). Financial statements are prepared on the basis of accounting standards (Law on Accounting, Chapter 4, Article 21). Accounting standards adopted are international accounting standards.
      Private companies See above
      Governmental
      Not-for-profit
      Other (please describe) Joint Stock Company See listed entities above
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Listed entities must prepare and submit not only audited annual financial statements, but also quarterly financial statements to the registrar (Securities Market Regulation Law, Chapter 4, Article 31, §2) and shareholders (Securities Market Regulation Law, Chapter 4, Article 31, §3).
      Private companies
      Governmental
      Not-for-profit
      Other (please describe) Joint Stock Company A statutory requirement for the entity to be audited exists only for Joint Stock companies (Civil Code, Article 115, §5). Law of RA on Auditing requires that “auditing is implemented in the order defined by the statutory legal acts on auditing” (Law on Auditing, Chapter 2, Article 6, §2). According to the Law, “Auditing standards are statutory legal acts corresponding to international standards of auditing” (Law on Auditing, Chapter 2, Article 6, §11).
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): According to the Law on Joint Stock companies, Annual General Meeting of shareholders appoints the auditors to the company (Law on Joint Stock companies, Chapter 10, Article 67, §1, Chapter 12, Article 12, §2).
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The Civil Code, Law on Joint Stock companies and Securities Market Regulation Law regulate matters in this area.

    2. the Enacting body(ies)

      The Parliament of RA is enacting body.

    3. the latest amendment date?

      Law on Joint Stock companies has been adopted at 25/09/2001 and latest amendment is made at 01/07/2004. Securities Market Regulation Law has been adopted at 06/07/2000 and latest amendment is made at 25/10/2004.


    35. How can IFAC obtain a copy of the Legal authority?
      Armenian versions of laws are available in www.parliament.am


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Statutory auditors are appointed at the AGM (Law on Joint Stock companies, Chapter 10, Article 67, §1, Chapter 12, Article 12, §2).
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Law on Auditing 08/2004 Ministry of Finance*
      Other (please describe) Private companies Law on Auditing 08/2004 Ministry of Finance*
      Other (please describe) Not-for-profit organizations Law on Auditing 08/2004 Ministry of Finance*
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Armenian version of Law on Auditing is available at www.parliament.am.

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Ministry of Finance*)


    44. For Ministry of Finance*, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government minsitry

      b. Name of standards



    45. How many voting members does the standard-setting body have?
      The questions relating to the voting members is not applicable to the government.


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      n/a


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      n/a


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      n/a

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      To the Government of RA


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      n/a

    2. accessibility of meetings (i.e., public or private)

      n/a

    3. approval process for final standards (i.e., majority required to approve final standards)

      n/a

    4. other relevant due process activities

      n/a


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Normative Act 02/2004 Association of Accountants and Auditors of Armenia
      Professional Accountants in Business Normative Act 02/2004 Association of Accountants and Auditors of Armenia
      Professional Accountants in the Public Sector Normative Act 02/2004 Association of Accountants and Auditors of Armenia
      Other (please describe) Auditors 08/2004 MFE and Association of Accountants and Auditors of Armenia

      a. How can IFAC obtain copies of these documents?

      The Armenian version of the document is available from www.aaaa.am

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Association of Accountants and Auditors of Armenia)


    56. For Association of Accountants and Auditors of Armenia, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The Association of Accountants and Auditors of Armenia is a professional organization and a non-governmental organization.

      b. Name of standards

      Code of Ethics for professionals

      Adopted by the AAAA Code of Ethics is 100% translation of IFAC Code of Ethics.


    57. How many voting members does the standard-setting body have?
      600


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members of the AAAA.


    61. What is the term of appointment for members?
      2 Year(s)


    62. For how many years has the standard-setting body been in existence?
      6 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Not separately allocated from the overall budget.

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?
      To the members of the AAAA.


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      AAAA Technical Department develops draft standards (in the case of ethics, has translated IFAC Code of Ethics in 2000 and amended Section 8 in 2004). The mentioned draft was discussed in the regular meetings of the Committee of Membership and professional ethics of the AAAA. The Committee has 5 members. However, any member of the AAAA can be present and participate in discussions. After the approval of the Committee the Code of Ethics has been also approved by the Council of the AAAA.

    2. accessibility of meetings (i.e., public or private)

      According to the AAAA rules, any member of the AAAA can be present and participate in discussions.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The standard is approved finally by the Council of the AAAA.

    4. other relevant due process activities

      Not applicable.


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      6 Day(s)


    Section 6B -- Standard-Setting (MFE and Association of Accountants and Auditors of Armenia)


    56. For MFE and Association of Accountants and Auditors of Armenia, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      With respect to the Association of Accountants and Auditors of Armenia, refer to response above.

      For the Ministry of Finance and Economy, this is a government ministry.


      b. Name of standards

      Ministry and Finance and Economy specific ethics requirements for auditors.


    57. How many voting members does the standard-setting body have?
      Not applicable


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Employees of MFE


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      n/a

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      n/a



    64. To what entity is the standard-setting body accountable?
      Government of Republic of Armenia


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      In 2001 the Government of RA has issued Resolution N324, according to which 34 International Standards on Auditing (ISAs) are approved as statutory legal acts.

      AAAA Technical Department develops draft standards (in the case of ethics, has translated IFAC Code of Ethics in 2000 and amended Section 8 in 2004). The mentioned draft was discussed in the regular meetings of the Committee of Membership and professional ethics of the AAAA. The Committee has 5 members. However, any member of the AAAA can be present and participate in discussions. After the approval of the Committee the Code of Ethics has been also approved by the Council of the AAAA.


    2. accessibility of meetings (i.e., public or private)

      According to the AAAA rules, any member of the AAAA can be present and participate in discussions.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The standard is approved finally by the Council of the AAAA

    4. other relevant due process activities

      n/a


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.



    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Professional examinations
      AAAA Certification Scheme consists of seven papers split into three levels:

      Level Paper No Name
      Awarded Certification
      I 1 Preparing Financial Statements

      2 Financial Information for Management
      Certified Bookkeeper
      II 3 Armenian Corporate and Business Law

      4 Business Taxation in Armenia

      5 Financial Management and Control

      6 Financial Reporting
      Certified Accountant
      III 7 Audit and Internal Review
      Certified Auditor
      Practical experience
      3 years of professional experience is mandatory requirement to obtain AAAA membership. Professional experience is considered work in the area of financial and managerial accounting, financial management, audit, consulting, tax for certified accountants and 3 years of professional experience in the area of audit for certified auditors.
      Final qualifying examination
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Accounting and Auditing Methodology Department of the Ministry of Finance
      Education and Certification Committee of the AAAA

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      The process of development of education requirements in the AAAA is as following. The contents of the Certification program, syllabuses of papers, examination procedures, admittance criteria, end all other relevant issues are developed in Education and Certification Department of the AAAA on the basis of IFAC standards and best international practices. The draft documents are passed to Education and Certification Committee of the AAAA and after open discussions are approved. After approval of the Committee, the document must be approved by the Council of the AAAA to become a normative act for all the members.

    2. How many voting members does the relevant body(ies) have

      Education and Certification Committee of the AAAA has 10 voting members

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Accounting and Auditing Methodology Department of the Ministry of Finance has employees.

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe) As mentioned above, the education requirements set by the Ministry of Finance are legally based. the education requirements set by the AAAA are normative acts for the AAAA members.

    72 a. How can IFAC obtain copies of these documents?
      General education requirements for auditors set by the Ministry of Finance are included in the Law on Auditing (Law on Auditing, Chapter 4, Article 21, 22).

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Ministry of Finance and Economy of RA.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      To practice as a Chief Accountant of companies for which the Law mandates publishing of accounts, the individual must have a license issued by the Ministry of Finance and Economy of RA on the basis of examinations developed and held by the Ministry of Finance and Economy of RA.

      To be admitted to the Ministry of Finance and Economy examinations, the candidate should have higher education in economy or higher education in any area and at least 18 months of professional experience. Professional experience is considered to be a work in area of accounting, finance, tax, audit, macro economy and other (methodology, consulting, lecturer, etc.).

      To practice as an Auditor the individual must have a license issued by the Ministry of Finance and Economy of RA on the basis of examinations developed and held by the Ministry of Finance and/or professional institute (Law on Auditing, Chapter 4, Article 21, 22) on the basis of certification examinations.

      To be admitted to the Ministry of Finance and Economy examinations, the candidate should have higher education in economy and at least 3 year professional experience or higher education in any area and at least 5 year professional experience. (Law on Auditing, Chapter 4, Article 23). Professional experience is considered to be a work in area of accounting, finance, tax, audit, macro economy and other (methodology, consulting, lecturer, etc.).


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      Ministry of Finance and Economy of RA


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      No additional licensing requirements for auditors of listed entities exist.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Law on Accounting 12/2004 Ministry of Finance and Economy
      Ministry/department Law on Accounting 12/2004 Ministry of Finance and Economy
      Statutory authority/agency Law on Accounting 12/2004 Ministry of Finance and Economy
      Profit entity owned by government Law on Accounting 12/2004 Ministry of Finance and Economy
      State governments Law on Accounting 12/2004 Ministry of Finance and Economy
      Local governments Law on Accounting 12/2004 Ministry of Finance and Economy
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Armenian versions of all laws are in www.parliament.am

      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Ministry of Finance and Economy)


    83. For Ministry of Finance and Economy, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government

      b. Name of standards

      Accounting


    84. How many voting members does the standard-setting body have?
      n/a


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      They are full time employees of the Ministry of Finance and Economy


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government of RA


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      n/a

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      n/a



    91. To what entity is the standard-setting body accountable?
      To the Government


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      n/a

    2. accessibility of meetings (i.e., public or private)

      n/a

    3. approval process for final standards (i.e., majority required to approve final standards)

      n/a

    4. other relevant due process activities

      n/a


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Law on accounting 12/2004 Ministry of Finance and Economy
      Other (please describe) Other entities Law on accounting 12/2004 Ministry of Finance and Economy
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?



      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Ministry of Finance and Economy)


    95. For Ministry of Finance and Economy, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government

      b. Name of standards

      Accounting


    96. How many voting members does the standard-setting body have?
      n/a


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government appoints the employees of Accounting and Auditing Methodology Department.


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      n/a

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      n/a



    103. To what entity is the standard-setting body accountable?
      To the Government


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      n/a

    2. accessibility of meetings (i.e., public or private)

      n/a

    3. approval process for final standards (i.e., majority required to approve final standards)

      n/a

    4. other relevant due process activities

      n/a


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Law of RA on Securities Market Regulation


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      n/a

    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The Securities Commission has the procedures of reviewing and monitoring the compliance of financial statements. If the reviewing body comes to the conclusion of possible non-compliance the case is transferred to the Meeting of the Commission which made the final decision. The system of penalties is set for the companies which fail to comply.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      ARMENIAN STOCK EXCHANGE (ARMEX)



    Section 10B -- Stock Exchange
    ARMENIAN STOCK EXCHANGE (ARMEX) Details


    110. For ARMENIAN STOCK EXCHANGE (ARMEX), is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      ARMEX has its own financial statements reviewing unit. In the case of non-compliance the case is transferred to the Securities Commission which makes final decision.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      The system of penalties is set by the Securities Commission

    3. How enforcement actions are administered.

      Though the system of penalties is formally set it does not work in practice due to underdevelopment of Armenian securities market at the moment.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      The number of laws regulate the banks (Law on the Central Bank, Law on Banking, Law on Bank Bankruptcy, Bank Secrecy). Central Bank of Armenia ensures normal functioning of the banking sector and financial institutions. The accounting requirements for regulatory reporting are defined in normative acts (www.cba.am). General purpose external financial reporting is determined by the Law on Banking. According to the Law, the banks must prepare and publish as well as submit to the Central Bank of Armenia annual audited and quarterly financial statements (Law on Banking, Chapter 6, Article 55, 58).


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      The Central Bank of Armenia monitors and controls accounting and auditing standards applied to banks.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Auditors to the bank are appointed by the bank and agreed by the Central Bank of Armenia. The requirements to the auditors are to be independent licensed auditors.

    2. accounting and auditing standard-setting

      n/a

    3. review of financial statements prepared by listed entities

      No special requirements apart mentioned in the Law on Securities Market Regulation

    4. enforcement of accounting, reporting and auditing requirements

      The Central Bank of Armenia should control and exercise disciplinary procedures in the case of breach of requirements (Law on Central Bank of Armenia).



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      Central Bank of Armenia


    116. What is the source of Legal authority of the regulatory authority(ies)?
      The source of legal authority is the Law of RA on Crediting Organizations.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      Crediting organizations (crediting societies, savings societies, leasing, factoring companies) must prepare and publish audited annual and quarterly financial statements

    2. accounting and auditing standard-setting

      n/a

    3. review of financial statements prepared by listed entities

      No special requirements apart of all other listed entities

    4. enforcement of accounting, reporting and auditing requirements

      No special requirements apart of all other listed entities



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      According to the Law of RA on Insurance Companies, this is “licensed state body”. Effectively this function in Armenia is fulfilled by the Ministry of Finance and Economy of RA.


    119. What is the source of Legal authority of the regulatory authority(ies)?
      The source is the Law of RA on Insurance Companies


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The Law of RA on insurance companies states that audited annual and quarterly financial statements should be prepared, submitted to the “licensed state body” and published.

    2. accounting and auditing standard-setting

      n/a

    3. review of financial statements prepared by listed listed entities

      n/a

    4. enforcement of accounting, reporting and auditing requirements

      n/a



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      n/a


    122. What is the source of Legal authority of each regulatory authority?
      n/a


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      n/a

    2. accounting and auditing standard-setting

      n/a

    3. review of financial statements prepared by listed listed entities

      n/a

    4. enforcement of accounting, reporting and auditing requirements

      n/a



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.



    125. Under what authority does the organization conduct the program of quality assurance review?
      The AAAA can only carry out QC site visits on a voluntary basis. However under the terms of membership, members are required to submit required annual QC documentation.
      However the AAAA has been active in attempting to encourage within Armenia the development of QC activity, under the auspices of a public oversight body, in line with the requirements of the EU 8th Directive.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      No site visits are at present carried out but will be introduced in the near future.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain) Refer to Q129 for explanation.


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.



    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      9


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Council of the AAAA


    134. What is the term of appointment for members?
      2 Year(s)


    135. For how many years has the body been in existence?
      Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      To the members of the AAAA


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      6 Day(s)



     

     

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