Kazakhstan

Member Organizations

Member Organization Associate Other PAOs

  Chamber of Auditors of the Republic of Kazakhstan
  Chamber of Professional Accountants of the Republic of Kazakhstan

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The corporate financial reporting framework in the Republic of Kazakhstan is outlined in the Law on Audit Activity of 1998 (with subsequent amendments), the Law on Accounting and Financial Reporting of 1995 (with subsequent amendments), and regulations issued by the National Bank of Kazakhstan (NBK) as well as the Kazakhstan Stock Exchange.

    The Law on Accounting and Financial Reporting and the Law on Audit Activity grant authority to the Ministry of Finance to determine state’s policy in the area of accounting and auditing, respectively, and to adopt relevant regulatory acts with input from the Consultative Board, which is comprised of members drawn from government agencies, state-owned enterprises, professional accounting and auditing organizations as well as business and academia.

    The Law on Accounting and Financial Reporting requires the use of IFRS for the preparation of financial statements of all large entities and listed companies, banks, insurance companies and other non-bank financial institutions. Small- and medium-sized entities must use Kazakhstan National Financial Reporting Standards (KNFRS) 2, while micro entities are required to use KNFRS 1. Regulatory bodies such as the NBK have authority to issue additional accounting requirements that are not provided for in the standards.

    The Law on Audit Activity stipulates mandatory audits for all joint stock companies, banks, insurance companies, other financial institutions, and entities from specific sectors of the economy. The Law requires audits to be conducted in accordance with ISA as issued by the IAASB and published in the Russian and Kazak languages.

  • Regulation of Accountancy Profession

    The accountancy profession in Kazakhstan is regulated at the state level by the Ministry of Finance and by the profession through professional auditing and accounting organizations accredited by the Ministry of Finance either under the Law on Audit Activity (for auditors and audit firms) or the Law on Accounting and Financial Reporting (for the accounting profession).

    Regulation of Auditors

    The Law on Audit Activity of 1998 authorizes the Ministry to regulate the auditing profession; specifies the types of services that audit firms may offer; requires all auditors and audit firms to be members of a professional auditing organization in order to conduct auditing activities; determines responsibilities of a professional auditing organization; establishes the initial professional development (IPD) and continuous professional development (CPD) requirements as well as auditing, ethical, and other professional standards to be applied by the profession.

    Under the Law, the Ministry of Finance is responsible for overseeing the activities of the accredited auditing organizations (two organizations as of 2017) and accrediting them; maintaining a registry of professional auditing and accounting organizations as well as that of auditors and audit firms; establishing licensing requirements as well as licensing auditors; overseeing implementation of the IPD and CPD requirements; and defining through law accounting, auditing, and ethical standards.

    Under Article 21 of the Law on Audit Activity, audit companies are required to be members of an accredited auditing organization that unites auditors and audit organizations and is accredited by the Ministry of Finance.

    Accredited auditing organizations—the Chamber of Auditors of the Republic of Kazakhstan (CoA RK) and the Collegium of Auditors of the Republic of Kazakhstan—are responsible for (i) conducting quality assurance reviews of their members; (ii) certification of auditors; (iii) provision of CPD programs for auditors; (iv) adopting a Code of Ethics for their members; and (v) investigating and disciplining their members.

    In 2016, the new Law on Self-Regulation came into effect, which defines the principles of self-regulation as well as rights and responsibilities of self-regulatory organizations. The CoA RK reports that as of 2017 professional organizations and the Ministry of Finance are in the process of defining the timeframe and the strategy to transition to self-regulation of audit activity in the Republic of Kazakhstan. As part of the discussion, an establishment of a public oversight body responsible for the implementation of quality assurance of audit firms carrying out audit of public interest companies as well as the establishment of a unified certification authority for auditors is being considered.

    Further to the requirements in the Law on Audit Activity, the Order of Minister of Finance on Qualification Requirements to Audit Firms Permitted to Conduct Statutory Audit of Financial Organization as well as regulations prepared by the National Bank of Kazakhstan and the Kazakhstan Stock Exchange lay down additional criteria for firms that are allowed to conduct audits of banks and listed companies.

    Regulation of Accountants

    In accordance with the Law on Accounting and Financial Reporting of 1995, the Ministry of Finance has overall responsibility for the regulation of the accounting profession. The Law establishes basic rules and procedures for financial reporting and the applicable accounting standards; requires all accounting firms, but not individual accountants, to belong to a professional accounting organization accredited by the Ministry of Finance; and authorizes accredited certification organizations to certify accountants.

    Under the Law, the Ministry of Finance is responsible for overseeing the activities of the accredited accounting organizations (five organizations as of 2017) and accredited certification organizations; establishing and overseeing implementation of the IPD and CPD requirements; and defining through law accounting and other professional standards, among other functions.

    Accredited accounting organizations must participate in the activities of the Consultative Body of the Ministry of Finance, implement IPD and CPD rules established by the Ministry of Finance, and enforce compliance with the ethical standards.

  • Audit Oversight Arrangements

    There is no independent audit oversight arrangement in the Republic of Kazakhstan. The Chamber of Auditors of the Republic of Kazakhstan indicates in its 2017 SMO Action Plan that the establishment of a public oversight body responsible for the implementation of quality assurance (QA) of audit firms carrying out audit of public interest companies as well as the establishment of a unified certification authority for auditors is being considered as part of the implementation of the Law on Self-Regulation that came into effect in 2016.

    As of 2017, the Ministry of Finance has overall responsibility for the regulation of the auditing profession under the Law on Audit Activity of 1998. The Law specifies the types of services that audit firms may offer; requires all auditors and audit firms to be members of a professional auditing organization in order to conduct auditing activities; determines responsibilities of a professional auditing organization; establishes the initial professional development (IPD) and continuous professional development (CPD) requirements as well as auditing, ethical, and other professional standards to be applied by the profession.

    Under the Law, the Ministry of Finance is responsible for overseeing the activities of the accredited auditing organizations (two organizations as of 2017) and accrediting them; maintaining a registry of the accredited professional organizations as well as that of auditors and audit firms; overseeing implementation of the IPD and CPD requirements; and defining accounting, auditing, and ethical standards.

    Accredited auditing organizations are responsible for (i) conducting QA reviews of their members; (ii) certification of auditors; (iii) provision of CPD programs for auditors; (iv) adopting a Code of Ethics for their members; and (v) investigating and disciplining their members.

    In addition, audit firms providing services to the national companies, financial institutions and companies traded on the Kazakhstan Stock Exchange are subject to additional qualification requirements. For example, the Listed Companies’ Audit Requirements require auditors to hold international certificates from renowned international institutes.

  • Professional Accountancy Organizations

    The Chamber of Auditors of the Republic of Kazakhstan (CoA RK)

    The CoA RK, which was established in 1993, is one of the two accredited professional auditing organizations in Kazakhstan. It received accreditation as a professional organization of auditors in 2008. The Chamber is a not-for-profit organization comprised of audit firms (associate members) and auditors (full members). Membership in the chamber is mandatory to practice auditing. The CoA RK’s mandate includes protecting the interest of the auditing profession, managing the education and training of auditors, strengthening audit quality through the operation of a quality assurance review system, instituting a Code of Ethics for its members, and establishing an investigative and disciplinary system. It is a Member of IFAC and a member of the Eurasian Council of Certified Accountants and Auditors (ECCAA).

    The Chamber of Professional Accountants of the Republic of Kazakhstan (CPA RK)

    The CPA RK was established in 2011 after the reorganization of the Chamber of Professional Accountants and Auditors and obtained its accreditation as a professional organization of accountants in March of the same year. Its members are accounting firms and individual accountants. The Chamber’s functions include promoting the interests of the accounting profession, determining educational and training requirements, establishing and fostering compliance with a Code of Ethics, and investigating and disciplining members for professional misconduct and non-compliance with the Chamber’s rules and regulations. The CPA RK is an Associate of IFAC and a member of the ECCAA.

    The Collegium of Auditors of the Republic of Kazakhstan

    The Collegium of Auditors of the Republic of Kazakhstan, one of the two accredited professional auditing organization in Kazakhstan, was founded in 2007 and is a not-for-profit organization comprised of individual auditors and audit firms. In the same year, it was accredited by the Ministry of Finance as a professional audit organization.

  • Projects or Other Information

    In 2016, the new Law on Self-Regulation came into effect, which defines the principles of self-regulation as well as rights and responsibilities of self-regulatory organizations. The Chamber of Auditors of the Republic of Kazakhstan reports that as of 2017 professional organizations and the Ministry of Finance are in the process of defining the timeframe and the strategy to transition to self-regulation of audit activity in the Republic of Kazakhstan. As part of the discussion, the establishment of a public oversight body responsible for the implementation of quality control of audit firms carrying out audit of public interest companies as well as the establishment of a unified certification authority for auditors are being considered.

Adoption of International Standards

  • Quality Assurance

    The Law on Audit Activity of 1998 stipulates that audit firms are subject to mandatory quality assurance (QA) reviews. The Law specifies that the reviews must be conducted by professional auditing organizations accredited and overseen by the Ministry of Finance in accordance with their internal rules and regulations.

    The Chamber of Auditors of the Republic of Kazakhstan (CoA RK), one of the two accredited organizations of auditors, reports that it established a QA review system in 2007 and conducts inspections of audit firms at least once every three years. According to the self-assessment conducted by CoA RK in 2017, the system complies with most of the requirements of SMO 1 (revised 2012). Information on the QA review system operated by the Collegium of Auditors of the Republic of Kazakhstan, which is not an IFAC member organization, is not available.

    The establishment of a public oversight body responsible for the implementation of QA review system of audit firms carrying out audit of public interest companies is being considered as part of the implementation of the Law on Self-Regulation that came into effect in 2016.

    Current Status: Partially Adopted

  • International Education Standards

    In the Republic of Kazakhstan, the initial professional development (IPD) and continuous professional development (CPD) requirements for professional accountants are established both in law and regulations and are implemented by the accredited professional organization sunder the oversight of the Ministry of Finance as well as by universities.

    The Law on Audit Activity and the Order of the Minister of Finance on Setting the Rules of Attestation of Candidates to the Audit License outline educational requirements for auditors. The Ministry of Finance, professional auditing organizations through their independent Qualification Commission, and universities implement the IPD and CPD requirements under the oversight of the Ministry of Finance.

    Educational requirements for accountants are established in the Law on Accounting and Financial Reporting and the Order by the Ministry of Finance on Qualification Requirements to Professional Accountants. Authorized professional accounting organizations, certification organizations, and universities implement the requirements established in the law under the oversight of the Ministry of Finance.

    Although some of the requirements of IES, such as practical experience requirements and continuing education, are in place for both accountants and auditors, the extent of alignment of professional education with the requirements of IES needs to be clarified.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Law on Audit Activity of 1998 as subsequently amended requires application of ISA as issued by the IAASB and published in the Russian and Kazak languages. Under the Law, the Ministry is responsible for translation of ISA into Kazak language, while the Chamber of Auditors of the Republic of Kazakhstan ensures availability of the Russian translation. As of 2017, the 2015 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is being applied. No plans to adopt the 2016 Handbook, which contains the revised Auditor Reporting standards, have been indicated.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    The Law on Audit Activity of 1998 and the Law on Accounting and Financial Reporting of 1995 require the accredited professional organizations to establish a Code of Ethics for their members under the oversight of the Ministry of Finance.

    Both IFAC member organizations in Kazakhstan—the Chamber of Professional Accountants of the Republic of Kazakhstan and the Chamber of Auditors of the Republic of Kazakhstan (CoA RK)—adopted the 2010 IESBA Code of Ethics for application by their members. The CoA RK reports that is working to update its Code to bring it in line with 2015 IESBA Code.

    It is not clear whether other accredited professional organizations in the jurisdiction, which regulate auditors and accountants, have adopted the IESBA Code for application by their members.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Ministry of Finance is responsible for determining public sector accounting standards with advice from the Consultative Board. The Ministry adopted accrual-basis IPSAS as national standards for application by all public entities effective January 1, 2013, and has translated the 2014 Handbook of International Public Sector Accounting Pronouncements into Kazakh in accordance with IFAC Translation Policy.

    Current Status: Adopted

  • Investigation and Discipline

    The Law on Audit Activity and the Law on Accounting and Financial Reporting establishes the authority of accredited auditing and accounting organizations to investigate and discipline (I&D) their members for non-compliance with applicable standards, ethical requirements, and for breach of professional conduct.

    In line with the requirement, both IFAC member organizations in Kazakhstan—the Chamber of Professional Accountants of the Republic of Kazakhstan (CPA RK) and the Chamber of Auditors of the Republic of Kazakhstan (CoA RK)—report to have established I&D mechanisms. The CPA RK adopted I&D rules and rules are being implemented through an operational I&D system. The CoA RK reports to have established a Committee on Disputes, which reviews requests and complaints by third parties on the actions of its members. The CoA RK in its 2017 SMO Action Plan indicates that the I&D system that it operates fully complies with SMO 6.

    Information on I&D processes of other accredited auditing and accounting organizations is not available.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Law on Accounting and Financial Reporting grants the authority to the Ministry of Finance to determine state’s policy in the area of accounting and to adopt relevant through legislative acts applicable accounting standards that must be applied in the preparation of financial statements in the Republic of Kazakhstan.

    Under the Law, all large entities and listed companies, banks, insurance companies and other non-bank financial institutions are required to apply IFRS as issued by the IASB and translated into the Kazakh and the Russian languages. The due process for the promulgation of IFRS, however, needs to be clarified.

    Small- and medium-sized entities (SMEs) are required to use Kazakhstan National Financial Reporting Standards (KNFRS) 2, which are based on IFRS for SMEs. Micro entities use KNFRS 1, based on national tax rules, to prepare simplified financial statements.

    Current Status: Adopted

Disclaimer

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: 06/2017
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