Certified Practising Accountants Papua New Guinea
Associate | Established: 1974 | Associate since 2006
CPAPNG was established in 1974 as a mandatory membership organization for all accountancy professionals in Papua New Guinea (PNG)—Certified Practising Accountants and Certified Accounting Technicians. The Accountants Act of 1996 provides CPAPNG with the mandate to: (i) review and communicate information on technical developments in the accountancy profession to members; (ii) set accounting and auditing standards to be applied in PNG; (iii) advise the Accountants Registration Board on any matters referred to it; (iv) determine initial and continuing professional development requirements, including setting requirements for admission into the institute; (v) research topics affecting the accountancy profession; (vi) set ethical requirements; (vii) establish an investigation and disciplinary system for its members and, where appropriate, ask the Accountants Statutory Committee to inquire into allegations of improper conduct by a member; (viii) establish and administer, or participate in the establishment and administration of, any organization, whether incorporated or not, whose principal objectives relate to the advancement of the accountancy profession; and (ix) promote the interests of the accountancy profession in PNG.
In addition to being an IFAC Associate, the CPAPNG is a member of the Confederation of Asian and Pacific Accountants.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
- SMO 1: Quality Assurance
Under the Accountants Act of 1996, the Accountants Registration Board (ARB) is responsible for establishing and operating a mandatory quality assurance (QA) review system for all audits of financial statements in PNG. As of 2019, however, a QA review system has not yet been established in the jurisdiction.
Although CPAPNG has no responsibility for conducting QA reviews, the institute has utilized its best endeavors to support the ARB and the government of PNG for the last seven years to revise the Accountants Act, which is awaiting approval by Parliament, to create the necessary provisions for the ARB to perform QA reviews. The CPAPNG indicates that once the new Act is approved, it will collaborate with the ARB in developing a quality review program to be implemented in PNG. At this time, no further action can be taken until the Act is approved.
To develop the future system, CPAPNG reports that it has undertaken several steps to learn about implementing a QA system. These efforts have included attending the CAPA Professional Accountancy Organization Development Committee meeting in Fiji in August 2017 to receive advice on the development of a QA system; holding discussions with PAOs from the neighboring Pacific Islands (Fiji, Samoa, and Solomon Islands) to draft a Memorandum of Understanding to facilitate knowledge sharing around QA and other accountancy related matters; and holding discussions with a QA reviewer from the Fiji Institute of Accountants (FIA) to assist CPAPNG in establishing a QA system for Papua New Guinea. FIA is responsible for QA reviews in Fiji and has incorporated all SMO 1 requirements in its system and therefore represents an appropriate regional partner to learn from.
CPAPNG reports that it has completed its discussions with FIA and has put forward recommendations for the future QA review system for its Council to review and approve in 2019. Once a draft procedure is approved, CPAPNG will initiate an awareness campaign to promote ISQC 1 and the principles of the draft QA system to members and other stakeholders. ICAI India has also stated its intent to assist CPAPNG with QA.
As there are reported ongoing initiatives around the future implementation of a QA system in the jurisdiction, CPAPNG is encouraged to continue its efforts and to keep IFAC updated on progress made. In addition, CPAPNG is encouraged to continue promoting the approval of the revised Accountants Act so further progress can be made to improve the quality of the profession in the jurisdiction.
- SMO 2: International Education Standards
In Papua New Guinea, CPAPNG is responsible for setting initial professional development (IPD) and continuing professional development (CPD) requirements. CPAPNG reports that its curriculum and syllabus are mostly, but not fully, in line with the revised 2015 IES requirements. CPAPNG conducted a comparison against the IES and identified gaps in IES 3 and 6. The institute indicates that as a part of its new 2020–2025 strategic plan, an important objective will be to address and close the identified gaps.
To maintain the quality of its IPD programming, the CPAPNG signed a Memorandum of Understanding with the UK-based BPP Learning Media to develop four of CPAPNG’s Certified Accounting Technician program books. It has also signed a Memorandum of Agreement with CPA Australia to incorporate five of CPA Australia’s exam modules into the CPAPNG CPA syllabus while retaining its own PNG-specific tax and law modules. CPAPNG is also actively engaging with local universities to improve areas of syllabus coverage and delivery with the objective of maintaining a comprehensive accounting education program and syllabus to ensure that all accountancy education standards in PNG are in line with IES requirements. Although CPAPNG has established practical training requirements, it has not developed a mechanism for monitoring this requirement and relies on information reported by employers.
CPAPNG administers CPD courses for its members, who must complete 120 hours of CPD over three years. The CPAPNG has conducted a review of its members’ CPD needs and indicates it has made significant improvements that include partnering with subject area specialists to deliver the training.
CPAPNG is encouraged to ensure that while legislation is pending approval, it continues in its plans to close the gaps identified and keep IFAC staff update on these efforts.
- SMO 3: International Standards on Auditing
The Accounting Standards Board is responsible under the Companies Act of 1997 to set and approve national auditing standards. The Accountants Act of 1996 also gives CPAPNG the authority to establish auditing standards. However, the Accountants Act is being revised to address these conflicting mandates. Pending its approval, the new Accountants Act will withdraw CPAPNG’s responsibility for setting auditing standards.
CPAPNG supports its members with the implementation of auditing standards by keeping them informed about new and revised IAASB pronouncements through relevant continuing professional development courses. It also collaborates with the ASB to issue interpretations and guidance on applicable standards and intends to jointly develop an Audit Manual and Toolkit once funding is secured for this project. It is worthy to note that CPAPNG is represented on the ASB with its President holding the position of Deputy-Chair, thus, the PAO is active in the local standard-setting process.
CPAPNG is encouraged to review the 2018 ISA and various IAASB projects (Audits for Less Complex Entities, and ISQM) to promote for eventual adoption and implementation in PNG.
- SMO 4: Code of Ethics for Professional Accountants
Under the Accountants Act of 1996, both the CPAPNG and the Accountants Registration Board are responsible for establishing ethical requirements in Papua New Guinea and require professional accountants to adhere to the Code of Ethics as issued by CPAPNG. CPAPNG reports that as of July 2019, the 2016 IESBA Code of Ethics is adopted, and that there are plans underway to review the 2018 International Code of Ethics for Professional Accountants for eventual adoption.
CPAPNG supports its members’ knowledge of, and compliance with ethical requirements by organizing various continuing professional development (CPD) workshops and conferences that include sessions on ethics and professional responsibility. Once the revised 2018 Code is reviewed, CPAPNG indicates that it will be conducting CPD and an awareness campaign on the new Code and the differences between the previous versions. New members and candidates are introduced to ethical requirements in pre-qualification examinations and modules entitled “Ethics and Governance” based on the CPA Australia module. New members are also given a copy of the Code of Ethics when they join the institute.
CPAPNG is encouraged to continue its efforts to review the revised 2018 International Code of Ethics for Professional Accountants for eventual adoption and to ensure that adequate training and awareness activities are developed to keep professional accountants aware of the changes. CPAPNG is encouraged to consider how it can provide additional support service such as a hotline or advisory panel to support the implementation and understanding of ethical requirements.
- SMO 5: International Public Sector Accounting Standards
With no responsibility for adopting public sector accounting standards, the CPAPNG indicates it is actively liaising with the government to adopt accrual-basis IPSAS and encouraging public sector accountants to be members of CPAPNG for technical support. Since 2013, CPAPNG has administered continuing professional development (CPD) courses and programs to public sector accountants in the jurisdiction and CPAPNG reports that it had previously engaged with a public sector accounting specialist to develop specialized CPD programs on public sector financial management. In addition, CPAPNG has collaborated with the Chartered Institute of Public Finance and Accountancy to raise awareness on benefits of IPSAS adoption, and as part of its efforts to promote sound public financial management reform with regional partners, the President of CPAPNG is involved as a Member of the Confederation of Asian and Pacific Accountants Public Sector Financial Management Committee.
Other important efforts by CPAPNG include liaising with the local government such as the Finance Department and Auditor General's office to raise awareness and promote the strengthening of public sector financial management even though the local government of PNG is resistant to initiate reforms. CPAPNG reports that there are plans in 2020 to convene a Public Sector Finance Management Conference in the jurisdiction to continue its advocacy for public financial management reform within the jurisdiction, the Pacific Islands, and the region.
Though it does not have responsibility for standards related to the public-sector, CPAPNG has been using its best efforts supporting its members who work in the public-sector through CPD and other educational programs. CPAPNG is encouraged to continue its efforts and to report to IFAC on any progress made in the future.
- SMO 6: Investigation and Discipline
Under the Accountants Act of 1996, the Accountant Statutory Committee (ASC) which operates under the Accountants Registration Board (ARB) and the CPAPNG share responsibility for the establishment of an investigative and disciplinary (I&D) system for professional accountants in PNG.
The CPAPNG is responsible for an I&D review system applicable to the conduct of members that are non-auditors with the ASC approving the recommended sanctions while the ARB is responsible for an I&D system for auditors. Revisions to the Accountants Act, which are pending approval will clarify the respective I&D functions of the ARB and CPAPNG. The CPAPNG reports that its system incorporates the majority of SMO 6 best practices with gaps in linkages to a quality assurance review system (which does not exist in the jurisdiction) and a separate body for appeals. CPAPNG is undertaking separate efforts to reduce the gaps that have been identified.
Complaints can be made directly to CPAPNG or its Council. CPAPNG’s Membership, Ethics and Disciplinary Committee (Disciplinary Committee), which consists of individuals from the accountancy profession, academia, and law, is responsible for recommending ethical and disciplinary cases to the ASC. The ASC reportedly does not meet on a regular basis and therefore has not undertaken any investigative or disciplinary actions. Since the establishment of its current I&D system, CPAPNG reports that it has conducted two investigations.
The CPAPNG indicates that the revised Accountants Act will also include provisions that will help align CPAPNG’s I&D system with the best practices of SMO 6 and will impose tougher penalties on individuals who do not comply with ethical requirements and relevant rules. As part of the implementation of its five-year strategic plan (2020–2025), CPAPNG indicates that it is developing a whistleblower process and protection policy to be incorporated into the existing I&D system. CPAPNG reports that it uses its best efforts to ensure members uphold their ethical obligations and professional conduct. CPD is continuously offered to members on the I&D process, the IESBA Code and the institute provides its Code of Ethics to new members upon registration. Once the whistleblower process is in place, CPAPNG will carry out a public-awareness campaign about its I&D system.
CPAPNG is encouraged to provide updates on its efforts to address the gaps to its I&D system. In addition, CPAPNG is encouraged to continue promoting the approval of the revised Accountants Act so further progress can be made to improve the quality of the profession in the jurisdiction.
- SMO 7: International Financial Reporting Standards
The Accounting Standards Board (ASB) has the responsibility under the Companies Act of 1997 to set and approve private sector accounting standards. The CPAPNG reports that the ASB reconvened in 2017 and adopted the latest International Financial Reporting Standards (IFRS) as well as IFRS for SMEs.
CPAPNG reports it has actively promoted the adoption of IFRS in the jurisdiction. This has included CPAPNG being represented on the ASB and being a strong advocate that the ASB meet to fulfill its legislated responsibilities.
The institute supports IFRS implementation through the pre- and post-qualification education and training that it provides to members. For instance, the institute includes IFRS in its examinations and distributes handbooks amongst students, candidates, and members. The CPAPNG includes IFRS in its continuing professional development program and has collaborated with various key accounting firms in the jurisdiction to organize training seminars and workshops for members. The CPAPNG has previously organized workshops in two of the biggest cities in PNG to publicize changes to IFRS. CPAPNG also issues technical bulletins as part of its dissemination activities.
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