Namibia

Member Organizations

Member Organization Associate Other PAOs

  Institute of Chartered Accountants of Namibia

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The Companies Act 2004 governs the corporate financial reporting, accounting, and auditing requirements in Namibia. The Act prescribes the preparation of financial statements for all companies in accordance with the Statements of General Accepted Accounting Practice (GAAP) accepted and applied by the Institute of Chartered Accountants of Namibia (ICAN). In accordance with the Act, ICAN determines what constitutes General Accepted Accounting Practice in Namibia.

    Since 2005, ICAN reports that its Council has adopted all IFRS and all pronouncements as issued by the IASB, including the effective date. Prior to 2005, ICAN adopted the South African GAAP, as issued by the South African Accounting Practices Board and harmonized with the IFRS as issued by the IASB, as the Namibian GAAP. All listed entities on the Namibian Stock Exchange, subsidiaries of foreign holding companies, and public-interest entities (PIEs) are required to apply full IFRS. In February 2010, ICAN adopted IFRS for SMEs. Companies that are not required to apply full IFRS may use IFRS for SMEs.

    According to the Companies Act 2004, all companies must have their accounts audited, with the exception of interim financial statements, by auditors who are Chartered Accountants of ICAN and registered the Public Accountants’ and Auditors’ Board (PAAB). Neither the Companies Act 2004 nor the Public Accountants’ and Auditors’ Act 1951 prescribe auditing standards to be applied in Namibia. The PAAB is legally responsible for adopting auditing standards but due to a lack of resources did not become operational until 2012. As such, in practice, the auditing standards issued by ICAN have been applied. In 2005, ICAN decided to adopt all ISA and pronouncements as issued by the IAASB. All IAASB pronouncements are adopted without modification, including effective dates. Prior to 2005, ICAN had adopted the South African Auditing Standards, which were in line with the auditing standards issued by the IAASB, as the Namibian Auditing Standards. In 2014, the PAAB officially delegated the responsibility of issuing guidance and standards related to audit and assurance services to ICAN, providing the adopted standards with legal backing.

    Banks and other financial institutions are subject to the supervision of the Bank of Namibia (BoN). The Banking Institutions Act 1998 stipulates the banks must prepare their financial statements as prescribed in the Companies Act 2004. Banking institutions must have their accounts audited annually by an auditor registered with the PAAB and approved by the BoN.

  • Regulation of Accountancy Profession

    The Institute of Chartered Accountants of Namibia (ICAN) was formally constituted on 20 October 1990. Membership of the institute is comprised of Chartered Accountants (CA(Nam). Membership in the institute is mandatory in order to use the CA(Nam) designation. If any ICAN member wishes to offer audit services to the public, they must register with the Public Accountants’ and Auditors’ Board (PAAB).

    The objectives and responsibilities of ICAN are to: (i) promote the common interest of persons carrying on the accounting profession throughout Namibia; (ii) adopt and promulgate accounting and auditing standards in the jurisdiction; (iii) implement initial professional development requirements of the PAAB; (iv) conduct all professional examinations; (v) maintain and publish a register of all members (vi) establish continuing professional development and ethical requirements for its members; (vii) establish an investigative and disciplinary system for its members; and (viii) support the PAAB in the implementation of the quality assurance (QA) review system for registered auditors. However, due to limited capacity, ICAN relies heavily on its partnership with South African Institute of Chartered Accountants (SAICA) to execute many of its responsibilities.

    ICAN uses SAICA’s education and training requirements as a model in regards to its membership requirements. Candidates for ICAN membership as Chartered Accountants must have a university degree, a Certificate in Theory of Accounting (a one-year post graduate course focused on accounting, auditing, tax, and financial management from an accredited university), complete a professional auditing program delivered by an accredited provider, complete practical experience requirements with a PAAB-accredited training office, and pass ICAN’s qualifying examinations, which are SAICA’s qualifying examinations. SAICA assists with the accreditation of Namibian tertiary education institutions and marks and assesses the examinations on behalf of ICAN. The PAAB also adopted SAICA’s Training Regulations as the Namibian Training Regulations, stipulating that trainee accountants must obtain and present evidence of their competency in four core subject areas, Namibian income tax, and VAT. Registered training offices must comply with SAICA’s guidelines for accreditation of training offices and office inspection visits.

    Additionally, given ICAN’s partnership and reciprocity agreement with SAICA—soon to be replaced by a Mutual Recognition Agreement (MRA) between ICAN and SAICA—it will also permit members in good standing of other professional bodies that have MRAs with SAICA to apply for ICAN membership.

    The PAAB was established by the Public Accountants’ and Auditors’ Act 1951 as amended in 1994 and has the legal responsibility for monitoring and maintaining the quality of the services provided by registered auditors. In order to publicly provide auditing services, individuals must be a Chartered Accountant of ICAN and then be registered with the PAAB. Under the Act, the PAAB’s functions include to: (i) accredit training offices for the practical training requirement for accountants; (ii) investigate and discipline (I&D) any registered auditor for improper conduct; (iii) establish ethical requirements for auditors; (iv) maintain separate registers for trainee accountants, public accountants, and auditors; (v) establish and implement a QA review system for registered auditors; and (vi) take any actions which it may deem necessary to maintain and enhance the integrity and standards of professional qualifications of accountants and auditors.

    Although the PAAB is the entity responsible for oversight of the audit profession, it only became operational in 2012 after a five-year period with no appointed Board. During this time period, ICAN had assumed the responsibilities of the PAAB in regards to auditing standard-setting, implementing QA reviews, overseeing examinations, and establishing an I&D system. Since 2014, ICAN and the PAAB have established a partnership in which the PAAB is responsible for implementing QA reviews and determining practical experience requirements while ICAN is responsible for conducting examinations and setting auditing standards.

    In addition, the Namibia Financial Institutions Supervisory Authority is responsible for regulating and supervising the non-banking financial sector in Namibia which includes the Namibian Stock Exchange, insurance companies, and pension companies, among others. In accordance with the Namibia Financial Institutions Supervisory Authority Act 3 of 2001, companies must have their accounts audited by an individual registered with the PAAB.

  • Audit Oversight Arrangements

    The Namibian Public Accountants and Auditors Board (PAAB) was established by the Public Accountants’ and Auditors’ Act 1951 and has the legal responsibility for monitoring and maintaining the quality of the services provided by registered auditors. In order to publicly provide auditing services, individuals must be Chartered Accountants of the Institute of Chartered Accountants of Namibia (ICAN) and then be registered with the PAAB. Under the Act, the PAAB’s functions include to: (i) accredit training offices for the practical training requirement for accountants; (ii) investigate and discipline (I&D) any registered auditor for improper conduct; (iii) establish ethical requirements for auditors; (iv) maintain separate registers for trainee accountants, public accountants, and auditors; (v) establish and implement a quality assurance (QA) review system for registered auditors; and (vi) take any actions which it may deem necessary to maintain and enhance the integrity and standards of professional qualifications of accountants and auditors.

    Although the PAAB is the entity responsible for oversight of the audit profession, it only became operational in 2012 following a period of five years during which no Board was appointed. During this period, ICAN had assumed the responsibilities of the PAAB in regards to auditing standard-setting, implementing QA reviews, overseeing examinations, and establishing an I&D system. Since 2014, ICAN and the PAAB have established a partnership role whereby the PAAB is responsible for implementing QA reviews and determining practical experience requirements while ICAN is responsible for conducting examinations and setting auditing standards.

    The PAAB is not a member of the International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    The Institute of Chartered Accountants of Namibia (ICAN) was formally constituted on October 20, 1990 by members of the South African Institute of Chartered Accountants who were residing in Namibia and were members of the South West African Chapter of the Cape Society of Chartered Accountants, originally formed in 1955. Membership of the institute is comprised of Chartered Accountants (CA(Nam). Membership in the institute is mandatory in order to use the CA(Nam) designation. If any ICAN member wishes to offer audit services to the public, they must register with the Public Accountants’ and Auditors’ Board (PAAB).

    The objectives and responsibilities of ICAN are to: (i) promote the common interest of persons carrying on the accounting profession throughout Namibia; (ii) adopt and promulgate accounting and auditing standards in the jurisdiction; (iii) implement initial professional development requirements of the PAAB; (iv) conduct all professional examinations; (v) maintain and publish a register of all members; (vi) establish continuing professional development and ethical requirements for its members; (vii) establish an investigative and disciplinary system for its members; and (viii) support the PAAB in the implementation of the quality assurance (QA) review system for registered auditors. However, due to limited capacity, ICAN relies heavily on its partnership with SAICA to execute many of its responsibilities.

    Since the PAAB has become operational, ICAN and the PAAB have developed a partnership whereby the PAAB is responsible for implementing QA reviews and determining practical experience requirements while ICAN is responsible for conducting examinations and setting auditing standards. ICAN has a representative from the PAAB on its Technical Committee and ICAN representatives are actively involved in the PAAB’s Quality Assurance Committee, Education and Training Committee, among other areas.

    In addition to being a member of IFAC, ICAN is a founding member of the Pan African Federation of Accountants.

  • Projects or Other Information

    Since 2012, the Institute of Chartered Accountants of Namibia has had contracts with two members to provide technical services in the areas of accounting and auditing standards as well as the various education-related initiatives the institute is undertaking. The contracts have helped increase the technical resources available to the institute.

Adoption of International Standards

  • Quality Assurance

    In accordance with the Public Accountants’ and Auditors’ Act 1951, the Public Accountants’ and Auditors’ Board (PAAB) is legally responsible for establishing and implementing a quality assurance (QA) review system. However, the PAAB did not become operational until 2012. From 2010 to 2013, the Institute of Chartered Accountants of Namibia (ICAN) contracted Protect-a-Partner (Pty) Ltd (a South African enterprise specialising in QA Reviews) to carry out firm and engagements reviews under the supervision of ICAN’s Quality Assurance Committee (QAC).

    Beginning in 2014, the PAAB re-assumed legal responsibility for conducting QA reviews as the legal regulator of the audit profession. ICAN provided the PAAB with ICAN’s methodology, all records of all ICAN QA reviews completed (firm and partner) and the planning for scheduled reviews. In 2015, the PAAB had contracted Protect-a-Partner (Pty) Ltd to provide review services to the Board and had established its own QAC.

    ICAN reports that the PAAB-coordinated QA reviews commenced in February 2016 and are planned to continue throughout the year.

    ICAN states that it has adopted ISQC 1 and its QA methodology was developed to be in compliance with SMO 1 requirements. ICAN reports that the PAAB now uses ICAN’s QA methodology and accordingly, the PAAB’s QA review system is aligned with SMO 1 requirements.

    Current Status: Adopted

  • International Education Standards

    The Public Accountants’ and Auditors’ Act 1951 stipulates that the Public Accountants’ and Auditors’ Board (PAAB) is legally responsible for establishing initial professional development (IPD) requirements for professional accountants. In 2014, the PAAB assumed responsibility for determining practical experience requirements for professional accountants while the Institute of Chartered Accountants of Namibia (ICAN) would conduct the qualifying examinations. Both PAAB and ICAN use the South African Institute of Chartered Accountants (SAICA) as a model for its IPD and continuing professional development (CPD) requirements, which incorporate the IES.

    ICAN’s education requirements and qualifying examinations are same as those of SAICA while the PAAB has adopted SAICA’s training model and regulations as Namibian regulations for practical experience requirements, stipulating that that trainee accountants must obtain and present evidence of their competency in four core subjects, Namibian Income Tax, and VAT.

    ICAN established a Training and Education Committee to oversee and monitor compliance with training regulations and membership requirements and established CPD requirements for its members which it indicates are in line with the IES.

    ICAN reports that after consulting with SAICA, it confirms that its training and educational requirements are in line with the revised IES effective as of July 2016.

    Current Status: Adopted

  • International Standards on Auditing

    Under the Public Accountants’ and Auditors’ Act 1951, the Public Accountants’ and Auditors’ Board (PAAB) is responsible for the adoption of auditing standards as the regulator of the auditing profession. From 2007 to 2012 no Board was appointed and from 2012 onwards, the appointed Board has been constrained by a lack of technical resources.

    As such, in practice, the auditing standards adopted by the Institute of Chartered Accountants of Namibia (ICAN) have been applied. In 2005, ICAN decided to adopt all ISA and pronouncements as issued by the IAASB. All IAASB pronouncements are adopted without modification, including effective dates. Prior to 2005, ICAN had adopted the South African Auditing Standards, which were in line with the auditing standards issued by the IAASB, as the Namibian Auditing Standards.

    In 2014, the PAAB officially delegated the responsibility of issuing guidance and standards related to audit and assurance services to ICAN, providing legal backing to the adopted standards.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Public Accountants’ and Auditors’ Act 1951 stipulates that the Public Accountants’ and Auditors’ Board (PAAB) is responsible for establishing ethical requirements for registered auditors. In 2016, representatives of the Institute of Chartered Accountants of Namibia (ICAN) proposed the adoption of the 2015 IESBA Code of Ethics, which was subsequently approved and adopted by the PAAB.

    In August 2016, ICAN’s Council adopted the 2015 IESBA Code for its members, which include all professional accountants in Namibia. ICAN reports that it monitors IESBA pronouncements relating to the Code of Ethics to determine whether updates are required.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    Public sector accounting standards are established by the State Finance Act of 1991 which are cash-basis.

    There is no known timeline for the planned adoption of IPSAS.

    Current Status: Not Adopted

  • Investigation and Discipline

    Under the Public Accountants’ and Auditors’ Act 1951, the Public Accountants’ and Auditors’ Board (PAAB) is authorized to investigate and discipline (I&D) any registered person for improper conduct. The Institute of Chartered Accountants of Namibia (ICAN) reports that as of July 2012, the PAAB has established and operationalized an I&D system for registered auditors. It is unclear if the I&D system is in line with revised SMO 6 requirements; however, ICAN reports that the PAAB is in the process of reviewing its I&D system.

    ICAN has established I&D procedures for its members and reports its I&D system is operational and functioning; however, ICAN notes that with the establishment of the PAAB’s I&D system, complaints have been more frequently filed with the PAAB.

    ICAN states that it revised its I&D procedures in 2012 to address the revised SMO 6 requirements and in 2015, moved its I&D procedures from the Constitution to the By-Laws to permit the Council to amend the procedures as necessary. ICAN has noted that an area requiring improvement is the composition of the Investigation and Disciplinary Committees as they are only comprised of members of the institute. It reports that the Council is reviewing this area.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Companies Act 2004 prescribes the preparation of financial statements for all companies in accordance with the Statements of General Accepted Accounting Practice (GAAP) established by the Institute of Chartered Accountants of Namibia (ICAN).

    Since 2005, ICAN reports that its Council has adopted all IFRS and all pronouncements as issued by the IASB, including the effective date. Prior to 2005, ICAN adopted the South African GAAP, as issued by the South African Accounting Practices Board and harmonized with the IFRS as issued by the IASB, as the Namibian GAAP. All listed entities on the Namibian Stock Exchange, subsidiaries of foreign holding companies, and public-interest entities are required to apply full IFRS. In February 2010, ICAN adopted IFRS for SMEs. Companies that are not required to apply full IFRS may use IFRS for SMEs.

    Banks and other financial institutions are subject to the supervision of the Bank of Namibia. The Banking Institutions Act 1998 stipulates the banks must prepare their financial statements as prescribed in the Companies Act 2004.

    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: 10/2016
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