Uzbekistan

Member Organizations

Member Organization Associate Other PAOs

  Chamber of Auditors of Uzbekistan
  National Association of Accountants and Auditors of Uzbekistan

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Accounting, auditing, and financial reporting requirements in the Republic of Uzbekistan are stipulated in the Law on Accounting of 1996, as amended in 2016, and the Law on Auditing Activity of 1992 as amended in 2018.

    The Law on Accounting establishes basic accounting and bookkeeping requirements for all legal entities in the Republic of Uzbekistan, except for banks and credit institutions, and authorizes the Ministry of Finance of the Republic of Uzbekistan to set accounting standards both for private companies and state-financed organizations. National Accounting Standards adopted by the Ministry are a modified version of IAS as they existed in 2008. Full adoption of IFRS is being considered, although no defined timeline has been established.

    The Central Bank of Uzbekistan (CBU) establishes accounting requirements for banks and credit institutions under the Law on Banks and Banking Activity of 1996. In 2004, the CBU adopted IFRS in existence at the time for application in the financial statements of entities under its supervision. The standards have not been updated to incorporate subsequent changes to IFRS. Prudential reporting rules established by the CBU also fall short of the requirements of IFRS.

    The Law on Auditing Activity of 1992 as amended in 2018 defines the requirements for audit of financial statements of all companies. According to the Law, the following types of entities must have their financial statements audited: (i) banks and other institutions licensed by the CBU; (ii) insurance companies; (iii) all joint-stock companies; (iv) investment and other funds administering monetary investments of the public at large; (v) charities and non-government organizations; (vi) entities where the sole or one of the shareholders is a public sector entity; and (vii) stock exchanges. In addition, any entity may choose to have their financial statements audited.

    Under the Law, the Ministry of Finance has the legal mandate to set and enforce auditing standards. The Uzbek National Standards of Auditing issued by the Ministry are based on ISA in effect as of 2008.

    However, full adoption of ISA has been an objective of the Government of Uzbekistan for the last decade. In 2010, ISA were adopted for application by listed companies effective 2017 through the Decree of the President of the Republic of Uzbekistan No. 1438. The 2013 amendments to the Law on Auditing Activity have further extended the scope of application of ISA by allowing all companies to follow ISA. Finally, on September 19, 2018, the Resolution on Measures for the Further Development of Audit Activities in the Republic of Uzbekistan No. 3946 was adopted which requires all audits to be conducted in accordance with ISA as translated into the Uzbek language and published on the website of the Ministry of Finance effective 2020.

  • Regulation of Accountancy Profession

    Auditors and chief accountants of entities subject to mandatory audit are the only segments of professional accountants regulated in Uzbekistan at the state level.

    The Law on Auditing Activity of 1992 as amended in 2018, outlines the procedures for certification, licensing, and registration of auditors, establishes auditing standards to be applied by the profession, defines rights and obligations of professional organizations of auditors, and authorizes the Ministry of Finance to regulate audit activity, including investigating and disciplining auditors.

    In particular, the Ministry is responsible for: (i) certifying auditors; (ii) establishing requirements for professional educational programs and examinations; (iii) licensing and maintaining registries of licensed auditors and audit firms; (iv) establishing continuing professional development (CPD) requirements for auditors; (v) conducting inspections of audit firms; and (vi) suspending audit firms’ licenses and certificates in case of infringement of law or misconduct.

    As mentioned above, the Ministry is responsible for the certification of auditors and operates its own training and examination programs. Candidates are required to have a University degree in economics, obtain practical experience of no less than three years, complete professional training in the accredited training centers, and pass examinations. Holders of certain qualifications such as ACCA, CGA, CAP/CIPA, etc. are exempt from professional training.

    In accordance with the Law on Auditing Activity, professional organizations of auditors participate in development of educational programs and examination procedures, conducting professional examinations, contribute to the development of relevant laws and regulations, perform mandatory ratings of audit firms and quality assurance reviews of their member audit firms, and investigate and discipline their members. At the time of writing of the report, there is no requirement for auditors to be a member of a PAO, however.

    On September 19, 2018, the Resolution on Measures for the Further Development of Audit Activities in the Republic of Uzbekistan No. 3946 was adopted that will result in several changes to the auditing profession. Effective 2020, the following regulatory changes are expected to be implemented in Uzbekistan: (i) all auditors will be required to use ISA; (ii) the Ministry of Finance will be responsible for conducting QA reviews of audit firms that conduct mandatory audits; (iii) all auditors and audit firms will be required to be members of a PAO; and (iv) audit licensing will be conducted by PAOs. As of 2019, voluntary QA reviews of auditors’ work are conducted by the PAOs.

    As noted above, chief accountants of enterprises that must undergo mandatory audits are also subject to limited regulation by the Ministry of Finance under the Law on Accounting of 1996. The amendments to the Law on Accounting in 2016 introduced initial professional development (IPD) and continuing professional development (CPD) requirements for chief accountants of entities subject to mandatory audit. In order to practice as a chief accountant of such entities, individuals must have a university diploma and obtain practical experience of no less than three (3) years. In addition, chief accountants are required to undergo annual CPD programs of no less than 20 hours per year. The Central Bank of the Republic of Uzbekistan establishes additional requirements for chief accountants who provide services to entities under its supervision.

    Accountancy professionals other than auditors and chief accountants may also choose to join a professional organization of accountants and auditors and be subject to the PAO’s regulation. Both the Law on Auditing Activity and the Law on Accounting provide for the establishment of such professional organizations. Professional organizations offer voluntary certification programs such as CAP/CIPA and the national certification of accountants described below, define IPD requirements for obtaining accounting certifications, establish CPD as well as ethical requirements, investigate and discipline their members, and conduct voluntary quality assurance reviews of their members.

    In 2015, the three main professional organizations of accountants and auditors—the National Association of Accountants and Auditors, the Chamber of Auditors, and the Federation of Accountants of Uzbekistan—introduced a voluntary national certification system of accountants. The Regulation on the Certification of Accountants adopted in 2015 stipulates IPD and CPD requirements for obtaining and maintaining the certification and requires holders of the certification to be a member of a professional organization of accountants and auditors, follow a Code of Ethics, and fulfill mandatory CPD requirements. The certification is not required to provide accounting services.

  • Audit Oversight Arrangements

    As of the date of the assessment, there is no independent audit oversight system in Uzbekistan. Auditors are regulated by the Ministry of Finance under the Law on Auditing Activity of 1992 as amended in 2018, which outlines the procedures for certification, licensing, and registration of auditors, establishes auditing standards to be applied by the profession, defines rights and obligations of professional organizations of auditors, and authorizes the Ministry of Finance to regulate audit activity.

    In particular, the Ministry is responsible for: (i) certifying auditors; (ii) establishing requirements for professional educational programs and examinations; (iii) licensing and maintaining registries of licensed auditors and audit firms; (iv) establishing continuing professional development requirements for auditors; (v) conducting inspections of audit firms; and (vi) suspending audit firms’ licenses and certificates in case of infringement of law or misconduct.

    In accordance with the Law on Auditing Activity, professional organizations of auditors participate in development of educational programs and examination procedures, conduct professional examinations, contribute to the development of relevant laws and regulations, perform mandatory ratings of audit firms, perform voluntary quality assurance reviews of their member audit firms, and investigate and discipline their members.

    On September 19, 2018, the Resolution on Measures for the Further Development of Audit Activities in the Republic of Uzbekistan No. 3946 was adopted which will result in several changes to the auditing profession. Effective 2020, the following regulatory changes are expected to be implemented in Uzbekistan: (i) all auditors will be required to use ISA; (ii) the Ministry of Finance will be responsible for conducting QA reviews of audit firms that conduct mandatory audits; (iii) all auditors and audit firms will be required to be members of professional accountancy organizations (PAOs); and (iv) audit licensing will be conducted by PAOs.

  • Professional Accountancy Organizations

    The Chamber of Auditors (ChAUz)

    ChAUz was formally established on August 9, 2000 by the Ministry of Justice of the Republic of Uzbekistan as a voluntary membership organization with the mission of supporting the development of auditors’ professional expertise and protecting their professional interests. As a professional organization of auditors, the Chamber develops training programs for auditors, provides input to the relevant legislative acts, establishes training centers for auditors, develops guidance materials, conducts quality assurance (QA) reviews of its members, investigates and disciplines its members, holds conferences and seminars on accounting matters, and develops and promotes the Code of Professional Ethics for auditors. ChAUz is an Associate of IFAC.

    The Federation of Accountants of Uzbekistan (FAU)

    FAU, formerly known as the Federation of Accountants, Auditors and Consultants, was established in March 2014 as a voluntary membership organization to unite accountants in business. According to its Charter, its purpose is to assist with the development of the accounting profession and the adoption and implementation of international standards. FAU is not a member of IFAC.

    The National Association of Accountants and Auditors (NAAA Uz)

    NAAA Uz was founded in 1992 as a voluntary membership organization and is one of the oldest professional organizations in the Republic of Uzbekistan, uniting both accountants and auditors. Its mission is to assist with the development of the accountancy profession and the adoption and implementation of international standards. The mandate of NAAA Uz is to provide assistance to its members by carrying out educational and continuing professional development programs, maintaining a QA review program for its member audit firms, investigating and disciplining its members, providing consulting services, and advising the regulator on the accounting and auditing legislation. In addition to being an Associate member of IFAC, the NAAA Uz is an associate member of the Asian-Oceanian Standards Setters Group.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    The Ministry of Finance is legally entrusted under the Law on Auditing Activity of 1992 as amended in 2000 to establish quality control requirements for audit firms in accordance with the Uzbek National Standards of Auditing issued by the Ministry, which are based on ISA in effect as of 2008.

    As of 2019, quality assurance (QA) reviews are required only for audit firms as part of undergoing an annual rating review. Reviews are conducted by professional accountancy organizations (PAOs).

    The National Association of Accountants and Auditors (NAAA Uz) reported in 2019 that the Cabinet of Ministers Resolution No. 274 of 2017 also allows PAOs to carry out QA reviews of all their members (both audit firms and individual auditors) on a voluntary basis. However effective 2020, under the Resolution on Measures for the Further Development of Audit Activities in the Republic of Uzbekistan No. 3946 of 2018, all auditors and audit firms will be required to undergo external quality assurance reviews to be conducted by the Ministry of Finance.

    To fulfill the requirements of the law, professional organizations of auditors, such as NAAA Uz and the Chamber of Auditors, have adopted ISQC 1 and established QA review systems for their respective members. Both organizations report that apart from cooperation with a public oversight board, which has not been established in the jurisdiction so far, their QA review systems comply with the requirements of SMO 1 (revised 2012).

    Current Status: Partially Adopted

  • International Education Standards

    Auditors, chief accountants of certain enterprises, and auditors providing services to entities supervised by the Central Bank of Uzbekistan are subject to specific educational requirements established by the respective authorities. Although IFAC member organizations in the jurisdiction indicate that overall education of professional accountants is aligned with the IES requirements, further information is needed to assess the extent of incorporation of the 2015 IES requirements, which emphasize learning-outcomes approaches.

    The Law on Auditing Activity of 1992 as amended in 2018 authorizes the Ministry of Finance to establish initial professional development (IPD) and continuing professional development (CPD) requirements for auditors. These requirements are implemented by the Ministry, universities, and professional organizations of accountants and auditors. The Ministry is responsible for the certification of auditors and operates its own training and examination programs. Candidates are required to have a University degree in economics, obtain practical experience of no less than three years, complete professional training in the accredited training centers, and pass examinations. Holders of certain qualifications such as ACCA, CGA, CAP/CIPA, etc. are exempt from professional training.

    The Ministry also establishes CPD requirements for auditors, which, according to the Chamber of Auditors (ChAUz), are in line with IES. Compliance with the CPD requirement is verified during quality assurance (QA) reviews by professional accountancy organizations.

    Universities provide the initial educational programming, which does not fulfill the requirements of IES, according to ChAUz.

    Chief accountants of entities that must undergo mandatory audits are subject to a number of IPD requirements established in the Law on Accounting of 1996, as amended in 2016. In order to practice as a chief accountant of such entities, individuals must have a university diploma and obtain practical experience of no less than three (3) years. In addition, chief accountants are required to undergo annual CPD programs of no less than 20 hours per year.

    The Central Bank of the Republic of Uzbekistan also establishes educational requirements for chief accountants who provide services to entities under its supervision. No information regarding the requirements is available.

    Accountancy professionals other than the categories described above may also choose to join professional organization of accountants and auditors and be subject to their educational requirements in order to obtain voluntary certifications such as CAP/CIPA and the national certification of accountant described below. Subsequently, they must fulfill the mandatory CPD requirements set by the organization.

    In 2015, the three main professional organizations of accountants and auditors—the National Association of Accountants and Auditors, the Chamber of Auditors, and the Federation of Accountants of Uzbekistan—introduced a voluntary national certification system of accountants. The Regulation on the Certification of Accountants adopted in 2015 stipulates IPD requirements for obtaining and maintaining the certification and requires holders of the certification to be a member of a professional organization of accountants and auditors, follow a Code of Ethics, and fulfill mandatory CPD requirements. The certification is not required to provide accounting services. The extent of alignment of the educational programming with IES has not been reported.

    Current Status: Partially Adopted

  • International Standards on Auditing

    Under the Law on Auditing Activity of 1992 as amended in 2018, the Ministry of Finance has the legal mandate to set and enforce auditing standards. The Uzbek National Standards on Auditing are based on ISA in effect as of 2008.

    Full adoption of ISA has been an objective of the Government of Uzbekistan for the last decade. In 2010, ISA were adopted for application by listed companies effective 2017 through the Decree of the President of the Republic of Uzbekistan No. 1438. The 2013 amendments to the Law on Auditing Activity have further extended the scope of application of ISA by allowing all companies to follow ISA. Finally, on September 19, 2018, the Resolution on Measures for the Further Development of Audit Activities in the Republic of Uzbekistan No. 3946 was adopted which requires all audits to be conducted in accordance with ISA as translated into the Uzbek language and published on the website of the Ministry of Finance effective 2020.

    The responsibility for the translation of the standards is vested with the National Association of Accountants and Auditors (NAAA Uz), which, as of 2019, has translated the 2013 ISA as part of a World Bank’s project for the Uzbek’s banking sector. According to NAAA Uz, however, in practice the Russian translation of ISA is more widely applied.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    There is no legal requirement for professional accountants in Uzbekistan to abide by a Code of Ethics. In the absence of a legal requirement or a regulation issued by the Ministry of Finance, which regulates the profession, the national professional organizations of accountants and auditors took the lead in introducing ethical requirements for their members who join them on a voluntary basis.

    In 2005, the Chamber of Auditors (ChAUz) and the National Association of Accountants and Auditors adopted a joint Code of Ethics for their members. The Code was later updated to incorporate the requirements of the 2014 IESBA Code of Ethics. Although ChAUz indicated that adoption of the 2017 version of the IESBA Code was under consideration, no further information is available at the time of writing of this report.

    Information on the adoption of the IESBA Code by the Federation of Accountants of Uzbekistan, which is not a member of IFAC, is not available.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Ministry of Finance is responsible for establishing public sector accounting standards. It has adopted a Public Financial Management Reform Strategy with a transition period to the international standards envisioned for 2009–2018. The Budget System Reform Project, a joint initiative between United Nations Development Project and the Ministry of Finance, and a key part of the reform strategy, aims to bring the National Public Sector Accounting Standards (NPSAS) in line with IPSAS. The development of 12 converged NPSAS was announced during roundtable presentations held in 2013–2014. It is not clear whether the standards have been adopted. According to the Chamber of Auditors of Uzbekistan, the Government remains committed to fully adopting IPSAS by 2022.

    Current Status: Not Adopted

  • Investigation and Discipline

    The Law on Auditing Activity of 1992 as amended in 2018 requires auditors to comply with the Law and other applicable legislation of the Republic of Uzbekistan. The Ministry of Finance under the same Law has the authority to suspend audit firms’ licenses and certificates in case of infringement of law or misconduct. It remains to be established whether the procedures operated by the Ministry of Finance comply with the requirements formulated in SMO 6.

    Both IFAC member organizations in the Republic of Uzbekistan—the Chamber of Auditors (ChAUz) and the National Association of Accountants and Auditors (NAAA Uz)—have established I&D systems for their respective members, as authorized by their respective By-Laws. In 2016, the NAAA Uz conducted a self-assessment against the requirements of SMO 6 and reported partial compliance. In 2019, ChAUz also reported partial compliance, with gaps mainly related to the scope of the system; disciplinary process; sanctions; and rights of representation and appeal.

    Information on the Federation of Accountants of Uzbekistan, which is not a member of IFAC, is not available.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Law on Accounting of 1996, as amended, establishes basic accounting and bookkeeping requirements for all legal entities in the Republic of Uzbekistan, except for banks and credit institutions, and authorizes the Ministry of Finance of the Republic of Uzbekistan to set accounting standards both for private companies and state-financed organizations. National Accounting Standards adopted by the Ministry represent a modified version of IAS as they existed in 2008. Full adoption of IFRS is being considered, although no defined timeline has been established.

    The Central Bank of Uzbekistan (CBU) establishes accounting requirements for banks and credit institutions under the Law on Banks and Banking Activity of 1996. In 2004, the CBU adopted IFRS in existence at the time for application in the financial statements of entities under its supervision. The standards have not been updated to incorporate subsequent changes to IFRS. Prudential reporting rules established by the CBU also fall short of the requirements of IFRS.

    Through a Presidential Degree issued in 2018, listed companies are permitted, and in 2022 will be required, to use IFRS. However, the due process for their adoption and application in the jurisdiction is not clear.

    IFRS (2013 edition) were translated into Uzbek by the National Association of Accountants and Auditors of Uzbekistan. However, as of the date of the assessment, the Ministry of Finance and the CBU have not yet adopted the translated IFRS, although they have recommended the use of that translation. Accountants and auditors in Uzbekistan regularly refer to the Russian translation of IFRS.

    Current Status: Not 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: 09/2019
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