Institute of Certified Public Accountants of Kenya

ICPAK has direct responsibility for the establishment and implementation of a quality assurance (QA) review system and has been conducting QA reviews since January 2006. Therefore, it focuses on supporting members in understanding the QA review process and reviewing the QA framework to continuously be in line with SMO 1 requirements.

The institute developed an audit manual and a model audit file to assist members’ compliance with international standards. The model audit file provides an illustrated example of an audit file should look. Additionally, the institute has developed a self-review tool and manual to assist small- and medium-sized practices.

In addition to supporting materials, ICPAK organizes continuous sensitization workshops and trainings on the QA system for firms and members, prepares and publishes an annual report on QA findings for members and other regulators, and provides members with updates on the QA system via journals and online platforms.

ICPAK has subsequently rolled out online quality reviews and compliance checks due to the impact of Covid 19. ICPAK continued to conduct QA reviews virtually. In 2020, the institute conducted twenty-eight (28) QA reviews virtually in Nairobi region and another 37 compliance checks virtually during the year. In 2022, 68 firms were reviewed with 107 financial statements audit files selected and reviewed in this period. Of the 68, 95% were first time reviews. In 2023, the target is to review a total of 250 firms.

With the change to new quality management standards, an ISQM implementation checklist has been developed to assess the level of compliance for all firms in scope.

Current Status: Sustain

ICPAK shares responsibility for the education and training of professional accountants with the Kenya Accountants and Secretaries National Examinations Board (KASNEB) and focuses on collaborating with KASNEB to strengthen initial professional development and, independently, establishes and monitors continuing professional development (CPD) requirements.

Both ICPAK and the KASNEB state that KASNEB curriculum and examinations are in line with IES requirements. In 2021-2022, ICPACK jointly with KASNEB, undertook a comprehensive review of the structure and content of the professional education program. ICPAK and KASNEB will conduct this review every three years to ensure that it adequately covers all facets of the accountancy profession including emerging issues. The revised CPA syllabus, which was implemented from 1 July 2022 featured the following, among others:

(a)Incorporation of the changes in IFRSs, ISAs, IPSASs and Ethics Standards.

(b)Introduction of a mandatory workshop on ethics and emerging issues pre-qualification.

(c)Introduction of a practical paper on data analytics

(d)Enhancement of the practical experience requirement as part of the pre-qualification requirements

(e)Adoption of computer-based examinations at the ATD Level.

Beginning in 2018, ICPAK also endeavored to strengthen its practical experience requirements to be line with IES 5 and subsequently developed the Trainee Accountant Practical Experience Framework (TAPEF) through the World Bank Institutional Development Fund. ICPAK undertook several initiatives related to this, including meeting with the KASNEB, Federation of Kenya Employers, and the government; and studying other PAOs’ practical experience programs. ICPAK organized a stakeholders’ forum to discuss the impact of the practical experience program and implementation challenges. It also runs work simulations workshops for trainees who do not have opportunities to obtain the necessary work experience. ICPAK is planning to implement the new practical experience on pilot basis with 68 trainee accountants and 44 supervisors/mentors. After a successful pilot of the TAPEF, ICPAK intends to establish:

•Accreditation of practical experience supervisors and firms.

•Formal requirement for employer signs off to ensure suitability of practical experience provided are in place.

•Automation of TAPEF log for TAs and their supervisors.

In addition, ICPAK has enhanced its CPD requirements which are in line with the latest IES. ICPAK audits CPD fulfillment and recognizes highest CPD achievers on an annual basis. ICPAK is developing e-learning courses for the delivery of its CPD courses. ICPAK has introduced certifications, videos, and other virtual modes of CPD implementation. The online CPD platform is expected to be fully rolled out in January 2024.

Current Status: Sustain

ICPAK has adopted ISA as issued by the IAASB without modifications and including effective dates as per its mandate under the Accountants Act of 1978 as amended in 2008. Accordingly, ICPAK now focuses on implementation of the standards.

ICPAK continuously works to raise member awareness and knowledge of the standards. As part of these efforts, ICPAK is undertaking a number of initiatives including: (i) notifying members of new and revised standards and related guidance materials through emails, newsletters, and its journal; (ii) reviewing IAASB Exposure Drafts and discussion papers in order to incorporate them in to continuing professional development (CPD) programs, (iii) providing individual feedback on compliance with standards on auditors’ reporting and responding to queries on the application of the standards, and (iv) holding forums, workshops, and trainings on the standards.

Moreover, ICPAK has indicated a specific focus on assisting small- and medium-sized practices and small- and medium-sized entities apply relevant standards. The institute has developed an audit manual, a model audit file, and self-review tool for these purposes. Now ICPAK is also supporting SMPs as related to ISQM 1 and 2.

Lastly, ICPAK circulates IAASB Exposure Drafts to members for comments which are then submitted to the IAASB. ICPAK recently submitted a comment on IAASB’s proposed standard for LCEs.

Current Status: Sustain

ICPAK first adopted the 2009 IESBA Code of Ethics as the ICPAK Code of Ethics and has continuously updated it to incorporate new and revised requirements issued by the IESBA. Accordingly, ICPAK reports that its members adhere to the latest version of the IESBA Code. In the case of one modification that has been made, ICPAK reports it is more stringent that the requirements in the IESBA Code.

ICPAK also works to ensure the effective implementation of the Code of Ethics and has highlighted that its overall approach encompasses not only responding to breaches of the code but also educating the business community and key stakeholders on the requirements of the Code of Ethics for Accountants. To this end, ICPAK prepares an annual schedule of lectures on the Code of Ethics that it gives in different regions of the country throughout February and March. In 2022 and 2023, the CPD calendar includes various trainings on ethical requirements based on both the local laws and regulations and IESBA Code. The institute reports to annually review its CPD programming to consider any pronouncements issued by the IESBA on topics such as addressing conflict of interest, fraud, and responding to non-compliance with laws and regulations.

Current Status: Sustain

The Public Sector Accounting Standards Board (PSASB) is responsible for adopting public sector accounting standards in Kenya. The Board adopted IPSAS as issued by IPSASB for use by all public sector entities. Currently, public sector entities are using IPSAS with no modifications on a partial accrual-basis. ICPAK uses its best endeavors to support its activities in the adoption and implementation of IPSAS.

Members of the PSASB must be members of ICPAK and through this representation, ICPAK was able to promote the adoption of IPSAS and provide technical assistance throughout the subsequent implementation process.

ICPAK continues to work with the PSASB to strengthen IPSAS implementation. ICPAK has helped the PSASB develop financial reporting templates that are in line with IPSAS for public sector entities. Additionally, the institute has developed a work program to build the technical capacity of finance staff in the public sector–many of whom are ICPAK members–by providing training materials and synthesis reports on the gaps in compliance with the financial reporting templates.

In 2015, the institute introduced an IPSAS compliance category in its Financial Reporting Awards (FiRe) ceremony to encourage and monitor levels of compliance with the implementation of IPSAS.

ICPAK reports that it informs both its members and key stakeholders in the public sector about developments to IPSAS and activities of the IPSASB through its e-newsletter. ICPAK also trains members on IPSAS by including IPSAS content in its continuing professional development programs and ICPAK states that it collaborates with the PSASB to develop the content of these training programs. Additionally, the institute has established a mechanism to consult members on Exposure Drafts issued by the IPSASB and then submit comments. In 2022, the Institute constituted a Public Sector Sub Committee whose mandate was to advise on areas relating to implementation of standards in public sector reporting and providing feedback on specific Kenyan issues for inclusion to the new standards developed by IPSASB.

Current Status: Sustain

In line with its mandate under the Accountants Act of 1978 and the 2008 amendments, ICPAK has established an independent Disciplinary Committee to sanction members while its Registration and Quality Assurance Committee undertakes investigations of complaints. ICPAK is focused on addressing all requirements outlined in the SMO 6 requirements.

In particular, ICPAK is working to establish an Appeals Committee to hear appeals from the Disciplinary Committee as per amendments to the Accountants Act 2008 and establish a separate Investigations Committee. Currently, appeals are made to the Disciplinary Committee through ICPAK’s Council or by seeking judicial action through the high court. However, to implement these initiatives, further revisions to the Accountants Act are required and ICPAK indicates it has already submitted such proposals to the Parliament.

To support its members, ICPAK organizes annual workshops on ethical requirements and the I&D process. Additionally, through its annual reviews of the I&D system, ICPAK has identified that greater follow-up is needed on suspended members to ensure re-training and re-admission upon successful completion of the disciplinary action and that there is low awareness on the I&D process for accountants amongst the public. ICPAK has endeavored to address these respective issues by developing an additional training and carrying out public awareness campaigns. It also notes that amendments to the Accountants Act will help deal with identified gaps.

Enforcement mechanisms that meet the SMO 6 benchmark can help further public trust and confidence in the accountancy profession. Per SMO 6, a separate committee tasked with carrying out investigations and reviewing evidence should be in place to refer matters to a disciplinary committee / tribunal. Those on the investigation committee must also be independent of the subject and individuals under investigation. Additionally, for an appeals function to be independent, the appeals process must include individuals that are not involved in the original findings or decision. As feasible, ICPAK is encouraged to address these gaps and provide updates on the status of proposed legislative amendments.

Current Status: Execute

ICPAK has direct responsibility for adopting accounting standards and has adopted IFRS and IFRS for small- and medium-sized entities (SMEs) for application in Kenya.

In addition to its standard-setting responsibilities, the institute is also focused on supporting members’ implementation and compliance with IFRS. ICPAK conducts workshops for its members on an annual basis on IFRS and IFRS for SMEs. In addition, ICPAK has introduced surveys for each training it conducts on IFRS and IFRS for SMEs to understand the challenges its members are facing in the implementation of the standards. It then prepares guidance material to address these challenges. Furthermore, the institute reviews annual reports for compliance with standards and provides feedback for the participating entities. ICPAK also encourages compliance with the standards with its annual Excellence in Financial Reporting Award (FiRe).

Lastly, ICPAK participates in the international standard-setting process by circulating IASB Exposure Drafts to its members and other stakeholders for their input and submitting comments. In cases where Exposure Drafts propose significant changes to existing IFRS, ICPAK states it holds fora to receive members’ comments. Recently, ICPAK participated in the consultation and revision process for the IFRS for SMEs.

Current Status: Sustain