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.

    The Institute of Chartered Accountants of Nepal

     

    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:

      Nepal


    2. Name of member body:
      The Institute of Chartered Accountants of Nepal

      Or please specify name:



    3. Individual responsible for preparation:
      Mr.Purushottam Lal Shrestha


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

      11 / 2003



    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.):
      The South Asian Federation of Accountants (SAFA)
      The Confederation of Asia and Pacific Accountants (CAPA)
      International Federation of Accountants (IFAC):Associate Member



    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: Company Act 1997
      b). the Enacting body: Parliament
      c). date the Act or Code came into force: 03 / 1997


    25. How can IFAC obtain a copy of the Act or Code?
      A hard copy will be sent to IFAC


    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 Preparation of Balance Sheet, Profit & Loss A/C and Cash Flow Statement is mandatory for Companies covered under the Company Act 1997. Currently, there is no provision for complying with Accounting Standards but accounts are required to be maintained according to generally accepted accounting principles. However, financial institutions have to comply with the directives of the Central Bank ( Nepal Rastra Bank) and comply with the financial statement format prescribed by NRB. Further, commercial banks have to prepare their financial statements in accordance with International Accounting Standards.
      Private companies See above for listed entities
      Governmental
      Not-for-profit
      Other (please describe) Financial Institutions See above for listed entities
      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 It is mandatory for every company to get its accounts audited. Currently, there is no provision in the Company Act that makes it mandatory to comply with auditing standards since it was only in 2003 that the Auditing Standards Board of Nepal came into existence.
      Private companies See above for listed entities
      Governmental
      Not-for-profit
      Other (please describe) Financial Institutions See above for listed entities
      Other (please describe) Financial Institutions


    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): In case of failure to appoint auditor by AGM, the compnay registrar appoints the auditor
      Audit committee   Other (please specify): in case of Public enterprises the office of Auditor General appoints the auditor
      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:
      Even though the Company Act has no provision for The rotation of auditors, notification issued by the Central Bank (Nepal Rastra Bank) requires rotation of auditors of financial institutions every three years.



    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

    2. the Enacting body(ies)

      Parliament and Nepal Rastra Bank (Central Bank) which issues directives.

    3. the latest amendment date?

      Securities Exchange Act 1983 (01/1997)


    35. How can IFAC obtain a copy of the Legal authority?
      Hard copies will be sent to IFAC


    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:
      Separate reporting has to be done to concerned regulating authorities


    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:
      In the case of financial institutions, the auditor has to prepare a separate Long Form Audit Report to be submitted to the Central Bank (Nepal Rastra Bank).


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): In case of failure to appoint auditor by AGM, Company Registrar appointments auditor on the request of Company
      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:
      Even though the Company Act has no provision for the rotation of auditors, notification issued by the Central Bank (Nepal Rastra Bank) requires rotation of auditors of financial institutions every three years.



    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 Nepal Chartered Accountants Act 1997 07/2002 Auditing Standards Board
      Other (please describe) Audit Act 1991 Office of Auditor General
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Hard copies will be sent to IFAC

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Auditing Standards Board)


    44. For Auditing Standards Board, 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

      AuSB constiututed by His Majesty's Government under the Nepal Chartered Accountants Act 1997.

      b. Name of standards

      Nepal Standards on Auditing (NSA)


    45. How many voting members does the standard-setting body have?
      7


    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.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government appoints five professional members on the recommendation of ICAN; and representatives are nominated by the Ministry of Finance and the Office of Auditor General.


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


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

      16,700.00

      Please enter the exchange rate used to calculate this number.

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

      1 USD = 72 NRs (Nepalese Rupees)



    52. To what entity is the standard-setting body accountable?
      To his Majesty's Government


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



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

      The Board meets within itself, there is however, no meetings held with any other person or body, either publicly or privately. The Board can invite experts in case of need.

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



    4. other relevant due process activities



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


    Section 5B -- Standard-Setting (Office of Auditor General)


    44. For Office of Auditor General, 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 Constitution of Nepal provides for the Office of Auditor General

      b. Name of standards

      Government Auditing Standards.

      The Standards are based on standards issued by the International Organization of Supreme Audit Institutions.


    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:


    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.)?


    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)

      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?


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



    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



    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 Chartered Accountants Act of 1997 07/2002 The Institute of Chartered Accountants of Nepal
      Professional Accountants in Business The Chartered Accountants Act 1997 07/2002 The Institute of Chartered Accountants of Nepal
      Professional Accountants in the Public Sector The Chartered Accountants Act 1997 07/2002 The Institute of Chartered Accountants of Nepal
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      A hard copy will be sent to IFAC

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (The Institute of Chartered Accountants of Nepal)


    56. For The Institute of Chartered Accountants of Nepal, 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

      Autonoumous body established through a special Act of Parliament

      b. Name of standards

      Code of Ethics


    57. How many voting members does the standard-setting body have?
      17


    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.)?
      Under the Chartered Accountants Act 1997, the Council of ICAN consists of 17 members of which fourteen are elected members from amongst the members of ICAN. Other 3 members, are nominated by the Ministry of Finance HMG. A seven member Professional Development Committee is constituted by the Council of ICAN. On the recommendation of the Committee, the Council promulgates the Code of Ethics.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The members of the Professional Development Committee is appointed by the Council of ICAN


    61. What is the term of appointment for members?
      1 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)

      NA

      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 Council of the Institute of Chartered Accountants of Nepal


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

      The Code of Ethics issued by ICAN are based on the Code of Ethics developed by IFAC.

      The Professional Development Committee deliberates on the interpretation of the existing standards and new standards, if required, are recommended to the Council of ICAN. The Code of Ethics formulated by the Committee are based on the Code of Ethics issued by IFAC.


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

      Professional Development Committee meets with its members. Experts may be invited where need is felt by the Committee.

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

      Professional Development Committee recommends the Council for approval.

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 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:
      From standard 1 to 10 is called Secondary Leverl. 10+2 is called Higher Secondary: after 10+2 is a Four year graduation and then a 2 year Masters level.


    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.

      ICAN is the authority to regulate the accounting profession in Nepal. With regard to auditing, one needs to be a member of ICAN and obtain practicing certificate from ICAN and obtain practicing certificate from ICAN. To obtain license for auditing and to become a member of ICAN, one needs to have completed Chartered Accountancy Course. However, for accoutnign functions no such certificate or membership from ICAN is required.


    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
      To gain admission inot the CA course, one needs to have completed al least 3 years of graduation and secured the prescribed percentage. In case one has not completed graduation but has passed 10+2, one has to qualify an additional examination called, the Foundation.
      Professional examinations
      The Professional Examination, also called Intermdiate, is held after a year of study into the Chartered Accountancy Course/
      Practical experience
      A student has to undergo compulsory 3 years of Practical training under the guidance of a Practicing Chartered Accountant.
      Final qualifying examination
      A student having passed the Professional Exam (Intermediate) along with 2 year study and completion of the requisite practical training is eligible for Final qualifying examination.
      Other (please describe)
      A new rule is being drafted by ICAN to make CPE compulsory for its members.


    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.
      ICAN

    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.

      Education Committee formed by the ICAN. The Committee makes regular research and study on the basis of which it recommends modification and revision in the education system. The CA curriculum is based on the International Education Guidles prescribed by IFAC.

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

      13

    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?

      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?
      A hard copy will be sent to IFAC

    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?
      ICAN through the Chartered Accountants Act 1997.


    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)
      Note: A new rule is being drafted by ICAN to make CPE compulsory for its members.


    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?
      ICAN


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      Nepal Rastra Bank (Central Bank) calls for empanelment of auditor for audit of financial Institutions.



    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 There are no separate public sector accounting standards
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      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 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
      Other (please describe) All Enterprises whether listed or not ICAN 1997 07/2002 Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      A hard copy will be sent to IFAC

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Accounting Standards Board)


    95. For Accounting Standards Board, 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

      ASB constituted by His Majesty's Government under the Nepal Chartered Accountants Act 1997

      b. Name of standards

      Nepal Accounting Standards


    96. How many voting members does the standard-setting body have?
      13


    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.)?
      The Chartered Accountants Act 1997 provides for thirteen member standard setting body, amongst which seven professional members (including chairperson) are nominated by the Gov't on the recommendation of ICAN council. Other representatives are from the Ministry of Finance, Office of Auditor General, Office of the Comptroller General, Company Registrar Office, Dept. of Inland Revenue & Securities Board.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Govt appoints 7 professional members, rest 6 are reps from concerned authorities.


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


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

      1 USD = 72 NRs



    103. To what entity is the standard-setting body accountable?
      His Majesty's Government


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

      The Accounting Standards developed by the Accounting Standards Board of Nepal are based on International Accounting Standards, with minimum modifications to suit local practices.

      *Identification of broad areas by ASB for formulating Accounting Standards
      *Constitution of ad-hoc technical committee by ASB for preparing preliminary drafts of proposed Accounting Standards (which are based on IAS)
      Consideration of preliminary draft prepared by technical committee by ASB and revision, if any of draft on basis of deliberation of ASB
      *Finalization of ED of proosed Accounting Standard, on the basis of draft prepared by the Technical committee and the comments fo the ASB
      *Issuance of ED inviting public comments.


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

      The Board meets within itself, there is however, no meetings held with any other person or body, either publicly or privately. It however sometimes experts from outside.

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

      * Consideration of comments received on ED and finalization of Accounting Standard by the Board
      * The Standards formulated by ASB is thereafter submitted to Council of ICAN for its consideration and approval
      * Consideration of Accoutning Standard by Council of ICAN, and if found necessary, modification of draft in consultation with ASB.
      * The Accounting Standard, so approved by the Council is issed for mandatory compliance under the authority of Council


    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      24 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:
      Securities Board


    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:
      The Secutiries Baord presently does not directly share responsibility for monitoring and enforcing compliance with accounting or audting requirements. Although, a new Act is underway to include the function of checking the practices of auditing and accounting requriements with regard to listed companies by the Board.

      Legal authority: Securities Exchange Act 1983


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

      The Securities Board presently does not directly share responsibility for monitoring and enforcing compliance with accoutnign or auditing requriements. Although, a new Act is underway to include the function of checking the practices of auditing and accounting requirements with regard to listed companies by the Board.

      Legal authority: Securities Exchange Act 1983


    2. accounting and auditing standard-setting

      The Chairperson of the Board is the representative member in the Accounting Standards Board of Nepal.

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

      As notified in point no. 107, the Board is in the process of including such functions in the future act.



    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
      Nepal Stock Exchange



    Section 10B -- Stock Exchange
    Nepal Stock Exchange Details


    110. For Nepal 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 Securities and Exchange Act 1983 empowers the stock exchange to issue various by-laws for the prupose of ensuring orderly and fair transactions of securities.

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



    3. How enforcement actions are administered.




    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:
      Nepal Rastra Bank (Central Bank). There is one type of reporting which has to be done in accordance with the format prescribed by the Nepal Rastra Bank (NRB). Directive 4 issued by NRB prescribes International Accounting Standards to Banks.


    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:
      To audit a financial institution, an auditor must be empanelled with Nepal Rastra Bank. An auditor has to prepare to a separate Long Form Audit Report to be submitted to the Central Bank (NRB). The Central bank (NRB) has an Inspection and Supervision Department to monitor financial aspects of financial institutions. The Department regularly inspects and oversees the compliance with NRB Directives. The Central Bank is responsible for the oversight of all non-banking institutions, which includes finance companies, development banks, co-operatives dealing like banks. However, insurance companies are not included within its ambit. All answers in point in 10D also apply to point 10 E.


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

      Does nto regulate the audit profession

    2. accounting and auditing standard-setting

      NRB can issue directives regarding compliance with standards. The present directive provides for the compliance of IAS by commercial banks.

    3. review of financial statements prepared by listed entities



    4. enforcement of accounting, reporting and auditing requirements




    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.


    116. What is the source of Legal authority of the regulatory authority(ies)?


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



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed entities



    4. enforcement of accounting, reporting and auditing requirements




    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.
      Insurance Board


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Insurance act 1999. The Insurance Baord was constitutued under the Insurance act to regulate and monitor the activities of insurance companies.


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

      Does not regulate the audit profession. ICAN is responsible for the regulation of audit profession

    2. accounting and auditing standard-setting

      The Insurance Board undertakes off site review of financial statements of Insurance companies

    3. review of financial statements prepared by listed listed entities

      The Insurance Baord undertakes off site review of financila statements of Insurance Companies

    4. enforcement of accounting, reporting and auditing requirements

      The Insurance baord enforces matters not consistent with the Insurance Act, directives of, Insurance Board and reporting requirements.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Company Registrar, Cooperative Development board, Inland Revenue Department


    122. What is the source of Legal authority of each regulatory authority?
      Company Registrar - Company Act 1997; Cooperative Development Board - Cooperative Act 1991; Inland revenue Department- Income Tax Act 200 and VAT Act 1996


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

      The above mentioned authorities do not regulate the audit profession

    2. accounting and auditing standard-setting

      The Accounting Standards Board and Auditing Standards Board of Nepal are responsible for setting standards.

    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    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?


    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.
      Disciplianry Committee formed by ICAN


    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?
      7


    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.)?
      The Chartered Accountants act 1997 provides for 7 members Disciplianry Committee which is a standing committee


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      In the 7 member committee, four members are designated by the Council form amongst the members of ICAN, and one person nominated by the Auditor General1


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


    135. For how many years has the body been in existence?
      2 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 Council of ICAN


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



     

     

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