Barbados

Member Organizations

Member Organization Associate Other PAOs

  Institute of Chartered Accountants of Barbados

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    In Barbados, the Companies Act Chapter 308 of 1982 addresses financial reporting requirements. The Act requires all listed companies and all private companies with annual sales and assets above set amounts (from January 2014, BDS 4 million/USD 2 million) to prepare financial statements and have them audited annually by an auditor who holds a practicing certificate from the Institute of Chartered Accountants of Barbados (ICAB).

    The Companies Act does not specify accounting or auditing standards to be applied but rather Section 5 of the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 establishes ICAB as the official accounting and auditing standard-setter in Barbados. ICAB has fully adopted IFRS and IFRS for SMEs as issued by the IAASB, including effective dates, as the national accounting standards since 2007 and 2010, respectively. Listed companies and companies that otherwise have public accountability, such as banks or similar financial institutions, credit unions, insurance companies, and mutual funds that take third party risks or funds, are required to use full IFRS while all other companies may use either IFRS or IFRS for SMEs.

    All companies that fall under the regulation of both the Central Bank of Barbados in accordance with the Financial Institutions Act 1997 and the Financial Services Commission (FSC) in accordance with the FSC Act 2010 must use IFRS and be audited by a licensed ICAB auditor. These companies include: commercial banks, trust companies, finance companies, merchant banks, non-banking financial services, insurance companies, credit unions, and all public companies, both listed and non-listed.

    ICAB has adopted ISA and all other pronouncements of the IAASB without modification (ISREs, ISAEs, ISRSs and ISQCs) as the applicable auditing standards for the annual audits of the abovementioned companies.

  • Regulation of Accountancy Profession

    In Barbados, the Institute of Chartered Accountants of Barbados (ICAB) is the standard-setter and regulator for the accountancy profession. It was established by the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 and its membership includes Chartered Accountants along with students pursuing professional accounting qualifications.

    According to the legislation, ICAB is responsible for: (i) the adoption of accounting and auditing standards in the jurisdiction; (ii) establishing ethical requirements for its members; (iii) licensing and regulation of auditors in Barbados, including the establishment of a quality assurance review system; (iv) prescribing admission requirements; (v) establishing continuing professional development requirements for its members; (vi) the investigation and discipline of its members; and (vii) maintaining a public registry of its practicing members.

    Membership of the institute is mandatory in order to practice auditing. Individuals wishing to enter into public practice must fulfill the following requirements: be a local resident, be registered as a Chartered Accountant of ICAB by being a member of one of the professional accountancy organizations (PAO) listed below, demonstrate proof of monitored practical experience before, during, and after qualification, and receive a practicing certificate from the institute. The institute issues two types of practicing certificates: general and specialty. A general practicing certificate is issued to qualified members who intend to engage in all areas of public practice while specialty practicing certificates are granted to members who engage in public practice but are restricted to taxation and consulting based on their practical experience. Accordingly, only ICAB members with a general practicing certificate may conduct audits.

    ICAB does not administer its own accounting education and certification program and therefore, relies on foreign institutions for prequalification training. It does have an agreement in place since 1982 with the Association of Chartered Certified Accountants (ACCA) for a joint examination scheme. Candidates for ICAB’s membership as a Chartered Accountant must be members of one of the following PAOs: the Association of Chartered Certified Accountants, the Institute of Chartered Accountants in England & Wales, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants of Ireland, the Chartered Institute of Management Accountants in England, the Chartered Professional Accountants of Canada, the Canadian Institute of Chartered Accountants, the Certified General Accountants Association of Canada, the Society of Management Accountants of Canada, the Institute of Certified Public Accountants of the United States of America, the Institute of Chartered Accountants of Australia, the Institute of Chartered Accountants of New Zealand, and any other body of accountants that may from time to time be so recognized by ICAB’s Council. These named PAOs require aspiring members to complete a professional accountancy education program, a practical experience requirement, and pass final examinations that are developed in line with the IES.

    Lastly, students enrolled in any of the abovementioned accountancy organizations are required to register as a student of ICAB. In order to register as a student, individuals must have been recommended for registration by a member of ICAB or by someone of official standing approved by the Council, not be less than 18 years of age, and have passed examinations accepted by the institute indicating a satisfactory standard of general education.

  • Audit Oversight Arrangements

    The auditing profession is self-regulated and there is no independent audit oversight authority.

    Auditors in Barbados are regulated by the Institute of Chartered Accountants of Barbados (ICAB), a corporate body established by the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974. Membership of the institute is mandatory in order to practice auditing.

    After acquiring membership of ICAB as a Chartered Accountant by fulfilling educational, practical experience, and examination requirements, ICAB members must satisfy additional requirements in order to publicly practice. These include: being a local resident, demonstrating proof of monitored practical experience before, during, and after qualification, and receiving a practicing certificate from the institute. The institute issues two types of practicing certificates: general and specialty. A general practicing certificate is issued to qualified members who intend to engage in all areas of public practice while specialty practicing certificates are granted to members who engage in public practice but are restricted to taxation and consulting based on their practical experience. Accordingly, only ICAB members with a general practicing certificate may conduct audits.

    According to its founding legislation, ICAB is responsible for the following: (i) the adoption of auditing standards for the jurisdiction; (ii) establishing ethical requirements for its members; (iii) licensing and regulation of auditors in Barbados, including the establishment of a quality assurance review system; (iv) prescribing admission requirements; (v) establishing continuing professional development requirements for its members; (vi) the investigation and discipline of its members; and (vii) maintaining a public registry of its practicing members.

  • Professional Accountancy Organizations

    In Barbados, the Institute of Chartered Accountants of Barbados (ICAB) is the only professional membership organization representing Chartered Accountants along with students pursuing professional accounting qualifications. It is a corporate body established by the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974. Membership of the institute is mandatory for to practice auditing.

    According to the legislation, ICAB is responsible for the following: (i) the adoption of accounting and auditing standards for the jurisdiction; (ii) establishing ethical requirements for its members; (iii) licensing and regulation of auditors in Barbados, including the establishment of a quality assurance review system; (iv) prescribing admission requirements; (v) establishing continuing professional development requirements for its members; (vi) the investigation and discipline of its members; and (vii) maintaining a public registry of its practicing members.

    In addition to being a member of IFAC, ICAB is also a member of the Institute of Chartered Accountants of the Caribbean.

  • Projects or Other Information

    In June 2015, the World Bank published its Report on the Observance of Standards and Codes (ROSC) on the accounting and auditing practices in the Caribbean. Barbados was included in the review which included an assessment of the accounting, financial reporting, and auditing practices in the public and private sectors in Barbados together with policy recommendations to enhance the quality of financial reporting. The ROSC issued recommendations at a regional, national, and professional accountancy organization level. Specific recommendations for Barbados in both the short and long term included: (i) defining public interest entities and small- and medium-sized entities and establishing an appropriate differential financial reporting framework for these companies; (ii) building up the Institute of Chartered Accountants of Barbados (ICAB)’s financial and infrastructure capacity; (iii) strengthening monitoring and disciplining of state-owned enterprises that may be late in meeting reporting requirements; (iv) strengthening regulators’ capacity to monitor and enforce compliance with financial reporting requirements of entities for which they are responsible; (v) ensuring IPSAS adoption and implementation; (vi) strengthening ICAB’s technical capacity to support its members with international financial reporting and auditing standards; (vii) consider reviewing interim financial reports of listed companies; and (viii) consider creating an e-repository of audit reports for greater ease of access.

Adoption of International Standards

  • Quality Assurance

    The Institute of Chartered Accountants of Barbados (ICAB) is responsible for the regulation of auditors in Barbados which includes the responsibility of establishing a mandatory quality assurance (QA) review system for all audits as well as adopting ISA and all other IAASB pronouncements, including ISQC 1.

    ICAB established its QA review program in January 2009 as part of a tripartite agreement between ICAB, the Association of Chartered Certified Accountants (ACCA), and the Institute of Chartered Accountants of the Caribbean. Under the most recent agreement, which became effective on January 1, 2016 and expires on December 31, 2021, ACCA’s team of Practice Reviewers carry out the QA reviews on behalf of ICAB. All practicing members who perform audit services are covered by the reviews. The QA review cycle is six years with audits of public interest entities reviewed every three years and auditors with unsatisfactory reports may be reviewed on a shorter cycle.

    ICAB indicates that the scope and design of the QA review system as developed by the ACCA is in line with SMO 1 requirements.

    Current Status: Adopted

  • International Education Standards

    Section 5 of the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 requires the Institute of Chartered Accountants of Barbados (ICAB) to set rules and regulations for the accountancy profession. Accordingly, ICAB’s Student Regulations establish initial professional development (IPD) requirements while its Continuing Professional Development (CPD) Regulations establish CPD requirements.

    ICAB relies on foreign institutes to provide prequalification training and has an agreement with the Association of Chartered Certified Accountants (ACCA) for a joint examination scheme. Candidates for ICAB membership must be members of one of the following professional accountancy organizations: the ACCA, the Institute of Chartered Accountants in England & Wales, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants of Ireland, the Chartered Institute of Management Accountants in England, the Chartered Professional Accountants of Canada, the Canadian Institute of Chartered Accountants, the Certified General Accountants Association of Canada, the Society of Management Accountants of Canada, the Institute of Certified Public Accountants of the United States of America, the Institute of Chartered Accountants of Australia, the Institute of Chartered Accountants of New Zealand, and any other body of accountants that may from time to time be so recognized by ICAB’s Council. All of the listed PAOs require their aspiring members to complete a professional accountancy education program, a practical experience requirement, and to pass final examinations, which are reported to be in line with the IES.

    However, ICAB has not established a local tax and business legislation exam as a final assessment for its members and therefore, its IPD requirements are not fully in line with the IES requirements.

    ICAB reports that it adopted new CPD requirements in May 2014 that are line with the revised IES.

    Current Status: Partially Adopted

  • International Standards on Auditing

    In accordance with Section 5 of the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974, the Institute of Chartered Accountants of Barbados (ICAB) is responsible for adopting auditing standards. Through direct reference, ICAB has adopted ISA as the applicable auditing standards in Barbados as well as all other pronouncements as issued by the IAASB without modifications and including effective dates.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Institute of Chartered Accountants of Barbados (ICAB) is responsible for establishing ethical requirements for its members in accordance with the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 and its By-Laws.

    ICAB reports that it amended its By-Laws in 2014 to define its Code of Ethics as the Code of Ethics for Professional Accountants as issued by the IESBA. As such, ICAB’s members are required to adhere to the currently effective version of the IESBA Code.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Financial Management Act 2007 specifies IPSAS as the applicable public sector accounting standards in Barbados and the Barbados government has subsequently adopted accrual-based IPSAS as the standards for government and public sector accounting.

    Current Status: Adopted

  • Investigation and Discipline

    In accordance with the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 and the Institute of Chartered Accountants of Barbados (ICAB)’s By-Laws, ICAB is responsible for establishing an investigative and disciplinary (I&D) system for its members.

    In May 2016, the ICAB states that it approved new Disciplinary Regulations which establish I&D procedures in line with the SMO 6 requirements. ICAB has created Investigations, Discipline, and Appeals Committees to carry out its I&D functions. The Investigations Committee is responsible for investigating complaints while the Disciplinary Committee is responsible for conducting hearings and imposing sanctions. ICAB has also amended its By-Laws as part of the drafting process for the new Disciplinary Regulations in order to ensure the independence of the Committees.

    Current Status: Adopted

  • International Financial Reporting Standards

    The Companies Act outlines financial reporting requirements but does not specify accounting or auditing standards to be applied. Section 5 of the Institute of Chartered Accountants of Barbados (Incorporation) Act 1974 establishes the Institute of Chartered Accountants of Barbados (ICAB) as the official accounting and auditing standard-setter in Barbados. ICAB has fully adopted IFRS and IFRS for SMEs as issued by the IAASB, including effective dates, as the national accounting standards since 2007 and 2010, respectively. Listed companies and companies that otherwise have public accountability are required to use full IFRS while all other companies may use either IFRS or IFRS for SMEs.

    All companies that fall under the regulation of both the Central Bank of Barbados in accordance with the Financial Institutions Act 1997 and the Financial Services Commission (FSC) in accordance with the FSC Act 2010 must use IFRS. These companies include: commercial banks, trust companies, finance companies, merchant banks, non-banking financial services, insurance companies, self-regulatory organizations and all public companies, both listed and non-listed.

    Current Status: Adopted

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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.

Methodology

Methodology
Last updated: 03/2017
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