Cayman Islands Institute of Professional Accountants

CIIPA is empowered by the Accountants Act of 2020 and Accountants (Quality Assurance) Regulations to operate its own quality assurance review system (QARS), established in line with SMO 1 requirements, for all audits. CIIPA successfully promoted the legislative approval of its Accountants (Quality Assurance) Regulations to specify the powers of the QARS and the adoption of ISQC 1 as the applicable quality control standard in the Cayman Islands and ISA and US GAAS as the applicable auditing standards. This was updated in 2023 to adopt ISQM1&2. Additionally, in 2016, CIIPA and the Auditors Oversight Authority (AOA)—the national authority responsible for supervising auditors and firms of listed companies—developed a Memorandum of Understanding (MoU) to clarify the role of CIIPA and the AOA in this area. The MoU stipulates that CIIPA can continue carrying out QA reviews for all audits provided that there is an information exchange in the scheduling of visits and for firms that are AOA-registered. The MoU was executed in February 2017 and is now effective with the goal of permitting for more cooperation. In the event of deficiencies, CIIPA would delay undertaking an investigation if the AOA is already or planning to investigate the case. The institute would subsequently determine its appropriate next steps.

CIIPA also engages with the Cayman Islands Monetary Authority (CIMA) for more cooperation regarding QA reviews and the licensing process to ensure that all public practice firms are licensed and subject to reviews.

Aside from proactively engaging with the AOA and CIMA, CIIPA has also been enhancing its own QA review system. CIIPA’s first QA reviews commenced in July 2013 with the assistance of the Institute of Chartered Accountants in England and Wales (ICAEW), the second cycle in 2017, and the third cycle in 2020. The fourth cycle to review adherence to ISQM1&2 will commence in 2023. ICAEW carries out the QA review visits and then issues detailed reports to CIIPA to assist firms in identifying and correcting deficiencies in the quality of their audit work. CIIPA will continue to publish an annual public report summarizing results of QARS.

Moreover, on an annual basis (excluding 2022), CIIPA indicates that it conducts trainings on ISQM 1&2 and regularly updates its website to disseminate materials and presentations on the purpose and scope of the QARS and quality control standards. Its most recent training was conducted in September 2021 to examine the new ISQM 1 and ISQM 2 and how firms should prepare. Lastly, the institute finalized the update of its internal QA Handbook and published its updated Helpsheet-Guide to QAR Visits.

Current Status: Sustain

In 2022, CIIPA participated in an IES alignment project with IFAC & the International Panel on Accountancy Education (IPAE) which confirmed alignment with all 2019 revised IES at the jurisdiction level.

As the majority of CIIPA’s members hold foreign qualifications, CIIPA itself does not set initial professional development requirements. It is responsible for ensuring education complies with IES through a due diligence process of verifying and thereby enforcing the initial professional development (IPD) requirements of recognized Overseas Professional Accountancy Institute (OPAIs) prior to admission in CIIPA. It then implements an application process to obtain a license to engage in public practice. CIIPA states that it conducted an analysis of OPAI’s compliance with IES requirements and it has policies in place to annually review its registration and licensing procedures.

In 2015, CIIPA developed its own Cayman business environment training course for all new members to ensure the knowledge necessary for the local market. In 2021, the course was revised and renamed ‘Cayman Business Law’. Completion of this course is a condition of registration and CIIPA plans to offer this course online. CIIPA is also refining and expanding options for qualifying in the Cayman Islands. As of the date of the assessment, there is a proposal to administer a joint examination scheme with ACCA in 2023.

In addition, continuing professional development (CPD) requirements are defined in its Accountants (Application for Membership) Regulations. These CPD requirements for Practitioner Members comply with IES 7 and IES8. The CPD requirement for Regular Members complies with IES 7, and applies to members whose OPAI does not have CPD requirements in compliance with IES 7 or which does not apply those requirements to its members. CIIPA notes that it monitors members’ fulfillment of the requirements in two ways: annual declaration of compliance on renewal and two percent of members are sampled annually. Practitioner Members are subject to CPD monitoring reviews every five years.

CIIPA indicates that it offers an array of CPD opportunities and has also specified other training providers that members may use to fulfill their CPD requirements. Its CPD offerings are publicly available for review on its website as well as materials from particular courses. CIIPA also obtained National Association of State Boards of Accountancy (NASBA)-approval as a training provider so that its US members may apply attendance at CIIPA trainings toward their CPD requirements. CIIPA conducted an international conference in partnership with AICPA which were NASBA accredited in Q4 of 2022.

CIIPA issued a Helpsheet on competence and capability for Licensing to reflect the revised IES 8 and issued a Helpsheet-Applying for and Renewing a License to provide further guidance on the policy.

Current Status: Sustain

The Accountants Act of 2020 and Accountants (Quality Assurance) Regulations prescribe that audits must be conducted in accordance with ISA, US GAAS or a standard assessed as equivalent with those by the Cayman Islands Institute of Professional Accountants or the IAASB.

CIIPA states that it has been committed to promoting the adoption of ISA as the applicable standards in audits of financial statements since 2013 and supporting implementation when its members do apply the standards.

As part of promoting the adoption of ISA and engaging with relevant stakeholders, since 2012, CIIPA has organized quarterly meetings with the Cayman Islands Monetary Authority (CIMA) to discuss options to formalize the use of ISA.

To support its members, CIIPA states that it organizes annual continuing professional development (CPD) trainings on the standards as well as IAASB and GAAS pronouncements and updates. The institute also continuously updates its website to provide links to IAASB training resources and pronouncements. In line with this, it has posted information on the new auditor reporting standards and encouraged members to review the IAASB’s toolkit and summary of changes.

Lastly, in 2010, CIIPA established its Policy on Responding to Legislative and Policy Consultations to provide for contributions to the IAASB exposure drafts and other public consultations. There are currently two sub committees who review pronouncements: the Public Practice and a new Consultative Committee. The institute provided commentary regarding the IAASB’s Enhancing Audit Quality.

Efforts to adopt ISA are strongly encouraged as part of enhancing the quality and uniformity of global practice and strengthening public confidence in the global auditing and assurance profession. Therefore, CIIPA is encouraged to continue its advocacy for the adoption and application of ISA for all mandatory audits in the jurisdiction. Of note, the 2021 Handbook is now effective, which includes revised standards ISA 600 which will come into effect on December 15, 2023. Lastly, CIIPA is encouraged to continue supporting the effective implementation of the new IAASB Quality Management standards.

Current Status: Review & Improve

CIIPA is responsible for setting ethical requirements and its Accountants (Quality Assurance) Regulations of 2016 prescribe adherence to the IESBA Code of Ethics as issued by IESBA. Since 2019, CIIPA’s Ethics Committee is responsible for establishing and monitoring the ethical requirements. With the amendment to the IESBA Code in relation to the definition of public interest entity (PIE) (effective December 2024), CIIPA plans to issue its own Code of Ethics which will be predominantly based on the IESBA Code of Ethics with minimal adaptations as necessary for the unique features of the Cayman Islands. CIIPA reports that as of the date of this assessment, the proposed definition of PIE has been approved by CIIPA Council and will be distributed to stakeholders for consultation prior to submission to the Ministry.

All members are required to confirm their compliance with the latest IESBA Code when first applying for CIIPA membership and during the annual renewal process.

To support its members with adherence to the IESBA Code, CIIPA has made the IFAC’s Ethics Education Toolkit, other training resources, and a link to the IESBA Code available to its members in combination with regular ethics trainings. For example, CIIPA partnered with the CFA Society of the Cayman Islands to host two ethics challenges for teams and individual members. Additionally, links to IESBA support material such as videos, fact sheets, and publications are included in member newsletters as well as on the CIIPA website. During CIIPA’s 2021 Anti-Money Laundering and Fraud training, the IESBA Deputy Director presented a section on the Code with a focus on NOCLAR.

Moreover, the institute aims to establish a confidential counseling service or contract a third-party provider that could provide members with advice when dealing with ethical issues. As of the date of the assessment, CIIPA continues to conduct outreach to overseas services that would be the most efficient for the institute to utilize.

Finally, CIIPA states that it participates in the international standard-setting process by submitting comments to exposure drafts issued by the IESBA.

Current Status: Sustain

Public sector accounting standards are generally accepted accounting practice (GAAP) as required by the Public Management and Finance Law (2013 Revision). The Law defines GAAP as IPSAS or, where is no guidance provided by those standards, the IFRS as issued by the IASB. The institute does indicate that it supports the implementation of the standards by providing advice to the Cayman Islands Government (CIG) and technical support to members.

To further enhance support for IPSAS, CIIPA has established an internal Public Sector Committee that will advise and support the CIG and will review the effectiveness of its communications and relations with public sector accountants on a semi-annual basis.

As part of assisting its members with implementation, CIIPA states that since November 2013, it collaborates with the CIG to offer an annual Professional Development Week which consists of three days of training and professional development for persons in the public and private sectors. The program brings in leading international and Cayman experts to cover a range of topics from corporate and public sector accounting to ethics, and corporate governance. 

Additionally, CIIPA notes that it includes sections in its member newsletter and website that cover public sector accounting issues.

If deemed relevant and feasible, CIIPA is encouraged to participate in the international standard-setting process by submitting comments to exposure draft issued by the IPSASB. CIIPA may also find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful for training and educational activities it offers.

Current Status: Sustain

CIIPA is responsible for establishing an investigative and disciplinary (I&D) system for members that breach professional standards. In 2012, CIIPA adopted its I&D policies and in 2016, the Accountants (Disciplinary) Regulations of 2016 were successfully enacted by law. CIIPA most recently updated its I&D policy in 2019. The institute had one case in 2014, 2015, and 2021. In 2020, seven complaints were received, and determined to not be within the scope of the complaints regime.

CIIPA has incorporated all of the SMO 6 requirements into its I&D system and reports that it is working to promote awareness of its complaints process. CIIPA reviews and reconsiders its communication methods, such as its website and articles in local media, to relevant stakeholders regarding the I&D system on a quarterly basis. I&D information is included on its website which is updated regularly. Additionally, CIIPA issued a Helpsheet which provides information on submitting a complaint and the I&D process.

Lastly, CIIPA states that it had been reviewing whether “gross professional negligence” is a legally recognized term in jurisdiction. Amendments to the 2016 Accountants (Disciplinary) Regulations did not specify this; however, CIIPA has identified this as item where there is a need to form a consultative committee to consider the issue.

Current Status: Sustain

Applicable international accounting standards in the Cayman Islands are not stipulated in law and often depend on the parent company due to the international nature of business in the Cayman Islands. In practice, most financial statements are prepared under U.S. GAAP or IFRS. Accordingly, CIIPA indicates that it is committed to promoting adoption of IFRS and supporting its members that do apply the standards.

As part of its commitment to promoting the IFRS, CIIPA reports that holds meetings with Cayman Islands Monetary Authority and it annually presents a Discussion Paper to its Council on the need to promote convergence with IFRS through meetings and other communications. In addition, CIIPA also raises the issue that there is a need to address gaps in legislation regarding accounting standards for small- and medium-sized entities.

To assist with implementation amongst its members, it holds a recurring one-day course throughout the year covering the major updates and differences between IFRS and US GAAP. The institute also notes that there is a section in its member newsletter and website dedicated to IFRS-related topics and raising awareness of IASB pronouncements. In addition, CIIPA is in the process of utilizing its Quality Assurance Review System to gather information on the accounting standards utilized with a future objective to be more informed when promoting IFRS.

Lastly, CIIPA mentions that it has submitted comments to an IASB surveys and participates in the international standard-setting process by submitting comments.

Efforts to adopt IFRS Standards are strongly encouraged as part of bringing transparency, accountability, and efficiency to national, regional, and global markets. Therefore, CIIPA is encouraged to continue promoting and supporting the adoption and application of IFRS— as well as IFRS for SMEs to support the Cayman Islands’ SMEs—in the jurisdiction.

Current Status: Sustain