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.

    Institute of Certified Public Accountants of Kenya

     

    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:

      KENYA


    2. Name of member body:
      Institute of Certified Public Accountants of Kenya

      Or please specify name:



    3. Individual responsible for preparation:
      John Nyanjua Njenga


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

      01 / 1981



    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.):
      Eastern Central and Southern African Federation of Accountants(ECSAFA)



    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: The Companies Act, Chapter 486 of the Laws of Kenya
      b). the Enacting body: Kenya Parliament
      c). date the Act or Code came into force: 01 /


    25. How can IFAC obtain a copy of the Act or Code?
      Hard copies available for sale at Government Printers Nairobi. They do not contain subsequent amendments. The Institute can source copies for IFAC upon request. Soft copies can be purchased from www.lawafrica.com, a private enterprise initiative. This contains up to date amendments.


    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 Financial statements must be prepared in accordance with International Accounting Standards.
      Private companies Financial statements must be prepared in accordance with International Accounting Standards.
      Governmental
      Not-for-profit
      Other (please describe)
      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 Financial statements must be audited in accordance with International Standards on Auditing.
      Private companies Financial statements must be audited in accordance with International Standards on Auditing.
      Governmental
      Not-for-profit
      Other (please describe)
      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: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      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:
      The existing auditors are deemed to be re-appointed unless the shareholders move a motion at the AGM for replacement.



    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

      Capital Markets Authority Act and The Capital Markets (Securities) (public Offers, Listing and Disclosures) Regulations, 2002

    2. the Enacting body(ies)

      Kenya Parliament and Capital Markets Authority respectively

    3. the latest amendment date?

      3rd May 2002


    35. How can IFAC obtain a copy of the Legal authority?
      Hard copies are available for sale at the Government Printers in Nairobi. The Institute can source copies for IFAC upon request.


    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:
      Listed entities must prepare Interim Reports, have an Audit Committee and comply with rules on corporate governance which require their finance and accounting departments to be headed by a member of the Institute of Certified Public Accountants of Kenya (ICPAK).


    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:
      Prohibition against interlocking chairmanship, directorship, Chief Finance Officers, heads of Accounting Department must be members of ICPAK. and requirement for directors other than Managing Director to retire by rotation every 3 years.


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      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: 1 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:
      The existing auditors are deemed to be re-appointed unless the shareholders move a motion at the AGM for replacement.



    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 Accountants Act 01/2002 International Standards on Auditing
      Other (please describe) Other entities Accountants Act 01/2002 International Standards on Auditing
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Hard copies available for sale. The Institute can source copies for IFAC upon request.

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (International Standards on Auditing)


    44. For International Standards on Auditing, 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

      A statutory body in which all Certified Public Accountants in the Country are members.

      Note: Proposed changes to the Accountants Act have not been finalized. It is under discussion by a Task Force that will recommend publication into a Bill for debate and adoption by Parliament. The draft may be obtained from ICPAK's website.


      b. Name of standards

      International Standards on Auditing.

      ICPAK has established ISAs and IASs as the applicable standards as part of the objectives and in exercise of its powers under the Act.


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


    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: The Fourteen volunteers are assisted by a permanent member of staff.


    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.)?


    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?
      26 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)

      N/A



    52. To what entity is the standard-setting body accountable?
      N/A


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

      The Committee participates in standard setting by presenting discussion papers and subsequently commenting to Exposure Drafts.

    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

      Individual ISAs and IASs are adopted as published with no additions or subtractions.

      With regards to question 54, the Committee meets bimonthly or more frequently in case of need.


    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 The Accountants Act, Chapter 531 of the Laws of Kenya 01/2002 Institute of Certified Public Accountants of Kenya
      Professional Accountants in Business The Accountants Act, Chapter 531 of the Laws of Kenya 01/2002 Institute of Certified Public Accountants of Kenya
      Professional Accountants in the Public Sector The Accountants Act, Chapter 531 of the Laws of Kenya 01/2002 Institute of Certified Public Accountants of Kenya
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Hard copies available for sale from the Government Printers. ICPAK can source copies for IFAC upon request.

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Institute of Certified Public Accountants of Kenya)


    56. For Institute of Certified Public Accountants of Kenya, 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

      Statutory body whose membership comprises all Certified accountants in the country.

      b. Name of standards

      ICPAK has adopted the IFAC code of Ethics for Professional Accountants.


    57. How many voting members does the standard-setting body have?
      Refer responses to questions 45 to 54 with regards to the Professional Standards Committee


    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: N/A


    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.)?
      N/A


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


    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)

      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?
      N/A


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

      Refer responses to question 54 for this question.

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



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



    4. other relevant due process activities



    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:
      Formal education starts in Primary School in class 1 and proceeds up to class 8 over an 8 year period. A national examination is administered by the Government and candidates proceed to Secondary Schools. This is for a period of 4 years and another national examination is administered. A candidate who attains a mean grade of C+ at this stage and a grade of C+ in Mathematics and English qualifies to start the Certified Public Accountant course. It comprises 18 subjects split into 6 sections. Two sections can be taken at a time and a progression rule applies.


    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.

      The Registration of Accountants Board. Before certification as an Accountant, one must pass all the 18 subjects of the Certified Public Accountants examination.


    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
      Ordinary Level qualification. Mean Grade of C+
      Professional examinations
      18 subjects of the Certified Public Accountants course.
      Practical experience
      Only necessary when a member wishes to practice public accountancy. A mandatory 3 years audit experience.
      Final qualifying examination
      The Final Qualifying Examination exists within the present KASNEB set up. It entails a set of Six Papers in the last part of the examination series.

      It forms a basis for issuance of a Final Accountancy Examination Certificate which is necessary for registration.
      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.
      Kenya Accountants and Secretaries National Examinations Board (KASNEB)

    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.

      KASNEB sets and administers the examination. The Board comprises Fourteen members appointed, Five by Government Ministries, one by the Director of Personnel Management, one by the Kenya Institute of Administration, one by a local university, one by the Federation of employers, one by the Attorney General, two by ICPAK and two by the Institute of Public Secretaries.

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

      Fourteen

    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:

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

      26 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)

    72 a. How can IFAC obtain copies of these documents?
      Contact ICPAK.

    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 Registration of Accountants Board.


    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)
      Refer response to question 69 for additional information.


    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): Maintain good ethical standing.


    80. What entity grants the license?
      The Registration of Accountants Board


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      N/A



    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 Public Audit Act 12/2003 Kenya National Audit Office
      Ministry/department Public Audit Act 12/2003 Kenya National Audit Office
      Statutory authority/agency Public Audit Act 12/2003 Kenya National Audit Office
      Profit entity owned by government Public Audit Act 12/2003 Kenya National Audit Office
      State governments Public Audit Act 12/2003 Kenya National Audit Office
      Local governments Public Audit Act 12/2003 Kenya National Audit Office
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Hard Copy available for sale at the Government Printers in Nairobi. ICPAK can secure copies for IFAC upon request.

      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Kenya National Audit Office)


    83. For Kenya National Audit Office, 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 Department headed by a Council comprising of the Controller and Auditor General, Chairman the Public Accounts Committee of Parliament, Chairman Public Service Commission, Chairman the Public Investments Committee of Parliament, The Attorney General or his nominee and a practising member of ICPAK.

      b. Name of standards

      Generally accepted accounting practices.

      The Standards are not currently based on IPSASs and are not defined by a body of standards as the Kenya National Audit Commission (KNAC) is in the process of formulating and defining them.


    84. How many voting members does the standard-setting body have?
      Six


    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.)?
      Geographical representation for the leaders of the Parliamentary Committees and best person for the job for the others.


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


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


    89. For how many years has the standard-setting body been in existence?
      1 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)

      1,200,000

      Please enter the exchange rate used to calculate this number.

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

      78.246



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


    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)

      None

    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 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 Accountants Act 01/2002 Institute of Certified Public Accountants of Kenya
      Other (please describe) Other entities Accountants Act 01/2002 Institute of Certified Public Accountants of Kenya
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      N/A

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Institute of Certified Public Accountants of Kenya)


    95. For Institute of Certified Public Accountants of Kenya, 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

      A statutory body in which all Certified Public Accountants in the Country are members.

      b. Name of standards

      International Accounting Standards.
      ICPAK has adopted International Accounting Standards.

      Refer Section 5 for remaining answers relating to this section.


    96. How many voting members does the standard-setting body have?
      Refer Section 5 for remaining answers relating to this section.


    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.)?


    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)

      Please enter the exchange rate used to calculate this number.

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



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


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

      Refer Section 5 for remaining answers relating to this section.

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



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



    4. other relevant due process activities



    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:
      Capital Markets Authority.


    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:
      Ensuring the rules on disclosure and continuing obligations are complied with. The Capital Markets (Securities) (Public Offers, Listing and Disclosures) regulations, 2002 are established pursuant to powers vested in the organisation by the Capital Markets Authority Act.


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

      No role as this is exercised by the Institute of Certified Public Accountants of Kenya, the member body.

    2. accounting and auditing standard-setting

      Except for specific regulations on minimum contents of accounts and periods of accounting for listed companies, the regulatory authority has no role as this is exercised by the Institute of Certified Public Accountants of Kenya, the member body.

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

      Selects, on a discretionary basis based on risk factors, the published accounts of listed entities to ensure compliance.



    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
      Nairobi Stock Exchange



    Section 10B -- Stock Exchange
    Nairobi Stock Exchange Details


    110. For Nairobi Stock Exchange, 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.

      The Capital Markets Authority performs the task as described in Section 10 A.

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

      Suspension of the entity from the stock exchange.

    3. How enforcement actions are administered.

      Fines may be imposed as well as suspensions.



    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:
      Central Bank of Kenya. The Banking Act and the Central Bank Act set out minimum disclosure requirements whose compliance is verified by the a Department of the Central Bank.


    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:
      No specific requirements on accounting and auditing standards. Emphasis is put on statutory requirements and the enforcement of accounting and auditing standards is left to ICPAK, the member body. Banks are however required to publish in the local dailies the half and full year results.


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

      The authority in consultation with the Institute of Certified Public Accountants, the member body, compiles a list of authorised auditors who must be in good standing with the member body.

    2. accounting and auditing standard-setting

      This is left to the mechanisms of the member body which has adopted International Accounting Standards and International Standards on Auditing.

    3. review of financial statements prepared by listed entities

      An inspection department routinely verifies compliance with statutory requirements.

    4. enforcement of accounting, reporting and auditing requirements

      An inspection department routinely verifies compliance with statutory requirements from periodical reports and published accounts filed with the organisation.



    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 Kenya


    116. What is the source of Legal authority of the regulatory authority(ies)?
      The Building Societies Act, Chapter 489 of the Laws of Kenya.


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

      Compiles a list of authorised auditors in consultation with the member body.

    2. accounting and auditing standard-setting

      The Statute establishes minimum disclosure and classification rules which are to be adhered to in addition to International Accounting Standards and International Standards on Auditing.

    3. review of financial statements prepared by listed entities

      The organisation conducts routine checks of published accounts.

    4. enforcement of accounting, reporting and auditing requirements

      Requires periodical filing of audited accounts which are routinely inspected.



    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.
      Commissioner of Insurance.


    119. What is the source of Legal authority of the regulatory authority(ies)?
      The Insurance Act, Chapter 487 of the Laws of Kenya.


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

      maintains an annual list of authorised auditors who must be in good standing with the member body.

    2. accounting and auditing standard-setting

      Sets out a mandatory minimum disclosure as well as classification and valuation criteria which is applied along with the requirements of International Accounting Standards and International Standards on Auditing.

    3. review of financial statements prepared by listed listed entities

      Routine inspection of periodical statutory reports and published accounts for compliance with the mandatory rules.

    4. enforcement of accounting, reporting and auditing requirements

      Emphasis placed on compliance with mandatory rules on classification, valuation and treatment of statutory items. Other aspects of quality left to the member body.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      The Ministry of Cooperative Development.


    122. What is the source of Legal authority of each regulatory authority?
      Cooperative Societies Act, 1997


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

      In consultation with the member body, compiles an annual list of auditors authorised to audit cooperative societies.

    2. accounting and auditing standard-setting

      Sets out the minimum disclosure requirements in the preparation of accounts of cooperative societies.

    3. review of financial statements prepared by listed listed entities

      Periodic inspection of the affairs of a cooperative society by representatives of the Ministry.

    4. enforcement of accounting, reporting and auditing requirements

      Checks for compliance at the point where annual reports are filed with the Registrar of Cooperatives.



    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.

      The Institute of Certified Public Accountants is in the process of implementing a quality review programme and the pilot reviews are currently underway. The programme becomes compulsory for all practising members 01/01/2005.



    125. Under what authority does the organization conduct the program of quality assurance review?
      Accountants Act, Chapter 531 of the Laws of Kenya and the By-laws.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?




    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)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Secretariat of the Institute of certified Public Accountants investigates, the Disciplinary Committee decides upon hearing the member under investigation and the Registration of Accountants Board punishes where more than a reprimand is recommended.


    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?
      5


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


    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.)?
      Academic and best persons for the job.


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


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


    135. For how many years has the body been in existence?
      26 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)

      7,300

      Please enter the exchange rate used to calculate this number.

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

      78.246 (specify currency)



    137. To what entity is the body accountable?
      The Council of the member body.


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



     

     

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