Saudi Organization for Certified Public Accountants
Member | Established: 1992 | Member since 1993
The Saudi Organization for Certified Public Accountants (SOCPA) has regulatory authority over several aspects of the accountancy profession, subject to oversight by the Ministry of Commerce & Industry. It is responsible for: (i) determining accounting, auditing, and ethical standards; (ii) developing and administering a quality assurance review system; and (iii) overseeing the professional examinations of CPAs. The CPA designation is protected under the law, and all Certified Public Accountants must be members of SOCPA. In addition, to practice CPAs are obliged to enroll in the Registry of CPAs that is kept by the Ministry of Commerce & Industry. The Ministry of Higher Education has the authority to determine the requirements to be met for earning the accounting degree that is a key initial professional development component, whereas SOCPA is in charge of stipulating and enforcing continuous professional development requirements. Investigation and discipline of members of the profession is the responsibility of a committee established by the Ministry of Commerce and includes a SOCPA representative.
Statements of Membership Obligations (SMOs)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
The SOCPA has direct responsibility for the establishment of a mandatory quality assurance (QA) review system for all audits of financial statements. It has established such a system, which is in line with SMO 1 requirements. The SOCPA Board has approved ISQC 1without any modification, making it effective for audits related to accounting periods beginning on or after January 1, 2017.
The institute supports its members with implementation of quality control standards by issuing guidelines and a quality control manual. It is working with other foreign institutes, such as the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Pakistan, to improve its current QA review processes and procedures. The Ministry of Commerce & Industry has appointed external consultants to review SOCPA’s current QA system and recommend improvements in line with the international requirements and best practices.
SOCPA is encouraged to include in its SMO Action Plan additional activities and plans to support members and firms with the implementation of quality control standards.
SOCPA is in charge of professional examinations, continuing professional development (CPD), and approves CPA offices that can offer training to candidates wishing to fulfill the requirements for certification. The Ministry of Education and universities control the curricula for the accounting degree, which is required for entry into the profession.
SOCPA engages in policy dialogue with the bodies responsible for the initial professional development (IPD) programs to promote the incorporation of IES requirements. It sent all IES to the Ministry of Higher Education to recommend alignment of current university requirements with the standards. SOCPA reports that its Education Committee monitors new and revised standards promulgated by the IAESB with the intention of updating education and examination requirements.
SOCPA has an arrangement with the Stock Exchange that encourages all professional accountants in listed companies to participate in SOCPA training courses.
The institute signed a contract with the Institute of Chartered Accountants of England and Whales to provide free access to its SMPs for the Institute of Chartered Accountants of England Wales portal, which provides online information and knowledge on international accounting, auditing, and ethical standards through its service known as “International Accounting, Auditing & Ethics”.
SOCPA is encouraged to review the IPD and CPD requirements for professional accountants in Saudi Arabia, identify the gaps that exist between current IPD and CPD requirements and revised IES along with the specific activities that will be used to close the identified gaps.
SOCPA, the designated auditing standard setter, approved convergence with ISA in 2012. Since then, SOCPA has been reviewing and endorsing all the standards after public comments were considered and incorporated. SOCPA reports that ISA will become effective in 2017. To support ISA implementation, SOCPA is currently developing examination and training material based on the standards.
SOCPA is encouraged to establish a system to monitor the activities of the IAASB and to provide updates to members on new and revised IAASB pronouncements. It is also encouraged to participate in the international standard-setting process by providing comments on Exposure Drafts and other IAASB pronouncements.
SOCPA has direct responsibility for developing ethical standards for its members. SOCPA reports that its Code of Ethics and independence requirements are more stringent than those of the IESBA Code of Ethics and that it has no plans to make a transition to the IESBA Code. It is unclear if SOCPA has compared its Code to a 2009 or later version of the IESBA Code, and whether there is an ongoing process to ensure that new and revised IESBA pronouncements are incorporated into SOCPA’s ethical requirements.
SOCPA reports that it assists members in complying with the prescribed ethical standards by ensuring that they have access to rules and regulations via the web and print media, and by publishing reports on disciplinary hearings. SOCPA also helps member by delivering training on ethics-related topics in continuing professional development programs. SOCPA has signed a contract with the Institute of Chartered Accountants of England and Whales (ICAEW) to provide free access to its SMPs for the ICAEW portal, which provides online information and knowledge on international accounting, auditing, and ethical standards.
SOCPA is encouraged to indicate in its SMO Action Plan the version of the IESBA Code of Ethics against which it has compared its ethical requirements. It is also encouraged to demonstrate it has ongoing mechanisms and plans in place to consider new and revised pronouncements from the IESBA. In addition, SOCPA is encouraged to participate in the international standard-setting process by providing comments on Exposure Drafts and other IESBA pronouncements.
Although SOCPA has no responsibility for the adoption of public sector accounting standards, it reports that it participates in the government-led implementation committee that is responsible for enhancing public sector accounting, developing standards, and overseeing implementation. No further information has been provided.
If deemed pertinent and necessary, SOCPA is encouraged to consider the development of an action plan with specific activities and a timeframe for completion to promote convergence with IPSAS. SOCPA may also consider exploring ways in which it could partner with stakeholders that share responsibility for public sector accounting to provide learning opportunities on the standards.
SOCPA shares responsibility with the Ministry of Commerce & Industry for monitoring and enforcing its members’ compliance with applicable standards and regulations.
SOCPA has conducted a comparison of its system with the main SMO 6 requirements, which has been included in its SMO Action Plan. In addition to the separation of the investigation and disciplinary processes, there is no process for an independent review of complaints that were not followed up, nor are the results of proceedings made public. The institute is exploring how current laws can be amended to improve the I&D system, especially with respect to the separation of the investigation and disciplinary processes.
SOCPA is encouraged to include plans to address missing SMO 6 requirements in its SMO Action Plan. SOCPA is also encouraged to showcase the activities that it conducts to raise members’ and the public’s awareness of the system’s requirements.
SOCPA, with direct responsibility for the adoption of private sector accounting standards, made a formal decision to adopt IFRS. SOCPA’s IFRS convergence process is underway and it reports that the majority of the standards were reviewed, subjected to public consultations, and endorsed for application by listed entities in 2017. SOCPA is planning to launch an IFRS Certificate course in Arabic by the end of 2016. To support the implementation of IFRS, SOCPA reports that it regularly conducts IFRS training sessions in Arabic and English, publishes guidance specifically related to first-time adoption challenges, and participates in sessions to raise IFRS awareness carried out by firms and other organizations.
SOCPA is encouraged to include activities in its SMO Action Plan to collaborate with accountancy education providers to ensure that initial professional development and continuing professional development curricula, syllabi and programs incorporate standard-related topics. Also, it is encouraged to consider putting in place a variety of mechanisms to disseminate updates on new and revised standards. SOCPA is also encouraged to participate in the international standard-setting process by providing comments on Exposure Drafts and other pronouncements issued by the IASB.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.