Chamber of Auditors and Expert Accountants

Associate | Established: 1997 | Associate since 2005

The Chamber of Auditors and Expert Accountants of Armenia (CAA), formerly Armenian Association of Accountants and Auditors (AAAA), is a non-government public organization established in October 1997 as a Union of Certified Accountants, subsequently reestablished in 1999 as the AAAA under Resolution No. 659 of 1999.  Since 2005, the AAAA has been offering a voluntary CPA certification, and was involved in the certification of auditors under the authority delegated by the Ministry of Finance. As part of the reform of regulation and oversight of the accountancy profession, in 2020, AAAA was reestablished as CAA following the adoption of the Law on Regulation and Public Oversight of Accounting and Auditing of 2019 and  was recognized by the Ministry of Finance as an accredited public organization (APO) entrusted with regulation of the accountancy profession under the Public Oversight Board (POB).

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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.

Methodology
Last updated: 10/2020
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    Under the Law on Regulation and Public Oversight of Accounting and Auditing that became effective on January 1, 2020, accredited public organizations (APOs) are now responsible for establishing and implementing a QA review system for their members under the oversight of the Public Oversight Board (POB). The POB approves annual review plans and has the right to conduct QA reviews. As of 2020, the new laws are in the process of being implemented and the new regulatory framework is being established.

    As of the time of the writing of this report, only CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), has been recognized as an APO. CAA reports that it is in the process of developing a QA review system that is in line with SMO 1 requirements. The new system is expected to be launched in 2021.

    Prior to 2020, AAAA had no direct responsibility for the establishment of a QA review system; however, it was actively promoting the need for such a system to the regulator, the Ministry of Finance (MoF) of the Republic of Armenia, and raising awareness of the need to establish a public oversight body. In 2013, with the support of international firms operating in Armenia, the AAAA launched a voluntary Audit Quality Review and Monitoring (AQM) program for its members. It created procedures, review questionnaires, an assessment methodology, and agreed on other terms for the AQM process. The AAAA required application of ISQC 1 (2009) and ISA 220 by its members. Since 2013, however, only one review has been conducted.

    In its 2020 SMO Action Plan, CAA indicates plans to support the operationalization of the POB and to develop processes and procedures for the new QA review system that are in line with SMO 1 requirements and ISQC 1. It also periodically organizes continuing professional development sessions for its members, including topics related to QA.

    Considering that the design and implementation of a QA review system continues to be in the development stage, CAA should take this opportunity to ensure that QA review system in the jurisdiction incorporates international best practices in the area, including those formulated in SMO 1. During the next round of updates, CAA is encouraged to present results of a self-assessment of the new QA system against those of SMO 1. It is also recommended that the association focuses on raising awareness of the profession about quality control standards and supports the profession in establishing the related systems in line with ISQC 1 and ISA 220, including through its educational programming. As IAASB is revising its standards on quality control, CAA should also consider following the developments and incorporating the revisions and prepare for the implementation of the revised standards.

    Current Status: Plan

  • SMO 2: International Education Standards

    The Law on Accounting of 2019 and the Law on Audit Activity of 2019 that became effective in 2020 introduced changes to the educational framework for professional accountants in the Republic of Armenia. The laws establish initial professional development (IPD) and continuing professional development (CPD) requirements for the two protected designations in the Republic of Armenia: auditors and expert accountants, which are further implemented and enforced by accredited public organizations (APOs) under the oversight of the Public Oversight Board (POB). The Law requires qualification and examination of auditors and expert accountants be in line with IES, without mentioning other areas covered by the IES such as CPD.

    As the only recognized APO as of 2020, CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), now has the authority to (i) certify auditors and expert accountants in line with IESs; (ii) develop and administer examinations for auditors and expert accountants in line with IES; and (iii) enforce CPD requirements for its members established by law.

    The CAA reports in its 2020 SMO Action Plan that its certification scheme has been traditionally based on the Association of Certified and Chartered Accountants program and on IESs.

    The CAA indicates that in 2020 it plans to review CAA’s qualification scheme, including the educational program, qualification exams, practical experience requirements, and CPD to bring it fully in line with the IESs and to promote and facilitate the adoption and implementation of the IES requirements for all professional accountants in the Republic of Armenia.

    Prior to 2020, the Ministry of Finance determined the content of the examination syllabus for audit certification, licensing requirements, and the related examination program. Since 2013, through Decree No. 748-N of 2013, the certification of auditors was transferred from the MoF to the AAAA, although the MoF continued to oversee the AAAA in this activity. Although overall AAAA’s scheme was based on IESs, it fell short of international standards and AAAA was reporting plans to review its practical experience, final assessment, and CPD requirements to bring them closer with IESs. In addition, the AAAA was involved in efforts to incorporate IES into university accounting curricula. The association, the Yerevan State University, and the Armenian State Economic University together participated in the World Bank Strengthening Auditing and Reporting in the Countries of the Eastern Partnership (STAREP) program, aimed, among other objectives, at bringing accountancy education in line with international standards. The association was actively supporting universities in this issue and hosted STAREP’s Education Committee meeting in Yerevan, Armenia in June 2016.

    Staff reiterate its recommendation that the CAA conduct a comprehensive review of the existing educational requirements for professional accountants in Armenia as well as its own educational programming against those of IESs. For areas of less than full compliance, specific actions to close the gaps, if any, with a defined timeframe need to be developed and included in its SMO Action Plan. It is recommended that the review be conducted against the HYPERLINK "https://www.iaesb.org/publications/revisions-ies-2-3-4-and-8-1" revised IES that address learning and development for information and communications technologies (ICT) and professional skepticism. Reviewing the requirements now and preparing a plan to incorporate them will help CAA ensure that its educational programming is IES-complaint when the standards become effective in January 2021. The IES Checklist and the Accountancy Education E-Tool developed by IFAC may be used to conduct an assessment and to consider available implementation support materials. The CAA is also encouraged to proactively liaise with all relevant stakeholders in the jurisdiction to promote and facilitate the adoption and implementation of the IES.

    Current Status: Plan

  • SMO 3: International Standards on Auditing

    The CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), reports that it played an active role in promoting the adoption of ISA for application in Armenia, the 2009 version of which was adopted in 2011 and partially updated in 2017 by the Ministry of Finance.

    With the adoption of the Law on Audit Activity of 2019 that became effective in January 2020, the responsibility for promulgation of ISA, which are adopted by law, was transferred to the Public Oversight Board (POB) that as of 2020 is still being established. No plans to adopt for application the 2018 IAASB Handbook have been reported as of the time of the assessment.

    The CAA’s activities in this area involve initial and continuing education of auditors. The CAA is responsible for the certification of auditors and currently offers a certification scheme that is based on the Association of Certified and Chartered Accountants program. The association reports that it monitors ISA developments and updates its syllabus and examinations accordingly. However, the version of ISA that has been incorporated into the educational programming and exams is not clear.

    The CAA indicates that it also offers CPD programming on ISA for its members; however, no further details were provided.

    The CAA’s contribution to the initial adoption of ISA and their subsequent promulgation are commendable. The association is encouraged to extend its support to the POB in its promulgation activities to reduce a time lag in the translation of the most recent international standards. The 2018 IAASB Handbook is now effective, which includes revised standards ISA 250 and 540 and CAA should consider updating its educational programming accordingly. The CAA is also encouraged to further indicate specific actions it undertakes to support its members with the implementation of ISA, for example, issuing implementation guidance, developing training activities, and disseminating information on developments in the international standard-setting area.

    If deemed relevant and necessary, the association could consider participating in the international standard-setting process, together with the POB, by providing comments on Exposure Drafts and other IAASB pronouncements.

    Current Status: Execute

  • SMO 4: Code of Ethics for Professional Accountants

    CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), is not directly involved in the establishment of ethical requirements in the Republic of Armenia. Nevertheless, over the years it has promoted the introduction of such requirements and since 2007 AAAA required its members to abide by the IESBA Code of Ethics.

    In 2020, the new Law on Accounting of 2019 and the Law on Audit Activity of 2019 became effective that require auditors and expert accountants, the two protected designations in the Republic of Armenia, to abide by the IESBA Code as promulgated by the Public Oversight Board (POB), which as of 2020 is still being established. Prior to 2020, only auditors were subject to ethical requirements and the IESBA Code was not adopted in the jurisdiction.

    As mentioned above, the CAA, since 2007 has required its members, who joined the association on a voluntary basis, to abide by the IESBA Code. As of 2020, the CAA has translated and made publicly available the 2016 version of the IESBA Code for application by its members. CAA indicates that it will assist the POB with the translation of the IESBA Code.

    Over the years, the CAA has reported that it works to ensure that the requirements of the IESBA Code are incorporated into its education and training programs. However, the version of the Code that has been incorporated into the educational programming and exams is not clear.

    CAA’s Committee on Membership and Professional Ethics is charged with investigating violations of professional ethics and norms by its members, among other functions, The association notes in its 2020 SMO Action Plan that the committee only periodically monitored members’ compliance with professional conduct requirements.

    The CAA also mentions that it organizes seminars, publishes implementation materials, and raises the awareness of its members and the public about ethics through its publications and website; however, no specific examples or initiatives have been indicated.

    Recognizing a major contribution of the AAAA/CAA to the adoption of the IESBA Code in the Republic of Armenia, it is recommended that the association support the POB with the adoption of the 2018 International Code of Ethics, a completely restructured and rewritten Code that includes the important NOCLAR standard issued in 2016, which has been effective since June 2019. It should also further review and enhance its existing activities to support implementation of the Code. Such activities may include translating the 2018 Code, holding seminars and focused trainings, establishing a hotline for confidential questions, and disseminating information on the developments in the area through different communications means, among other activities. CAA is also encouraged to incorporate the new requirements into its educational programming.

    If deemed relevant and necessary, the association could also consider, together with the POB, participating in the international standard-setting process by providing comments on Exposure Drafts and other IESBA pronouncements, possibly in collaboration with other stakeholders.

    Current Status: Execute

  • SMO 5: International Public Sector Accounting Standards

    With no direct responsibility for adoption of IPSAS, the CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), reports that, since 2012, it has participated in discussions with government officials on the adoption of IPSAS and continues to use its best endeavors to identify opportunities to assist the Ministry of Finance with the implementation of the Armenian Public Sector Accounting Standards (APSASs), which are based on accrual-IPSAS.

    CAA, together with the representatives of Ministry of Finance, and some universities, participates in the World Bank’s Public Sector Accounting and Reporting (PULSAR) program to support the development of strong public sector accounting and financial reporting frameworks in the jurisdiction.

    CAA has demonstrated that, within the scope of its authority, it is committed to meet the SMO 5 obligations. The association is encouraged to further consider opportunities in the area of public sector accounting and, if deemed feasible, develop a plan with a defined timeline and specific activities in the area.

    Current Status: Review & Improve

  • SMO 6: Investigation and Discipline

    The Law on Regulation and Public Oversight of Accounting and Auditing of 2019, the Law on Audit Activity of 2019, and the Law on Accounting of 2019 introduced a new system of regulation of the accountancy profession, including I&D processes. The laws authorize accredited public organizations (APOs) to establish and implement respective I&D systems under the oversight of the Public Oversight Board (POB). As of 2020, the new laws are in the process of being implemented and the new regulatory framework is being established.

    As of the time of the writing of this report, only CAA has been recognized as an APO. CAA reports that it is in the process of establishing a new I&D mechanism that is in line with the new laws and SMO 6.

    Prior to 2020, the Law on Audit Activity of 2002 authorized the Ministry of Finance to administer an I&D system for auditors. There is no indication that the Ministry of Finance had an operational I&D system in place and whether the processes complied with the requirements of SMO 6.

    In addition, in 2005, the AAAA, which at the time united professionals on a voluntary basis, took some initial steps to introduce an I&D system for its members based on the SMO 6 requirements existing at the time; however, due to resource constraints, such a system has not been implemented. It established the Committee on Membership and Professional Ethics, which, along with other objectives, was mandated to investigate violations of professional ethics and norms by its members. The CAA notes in its 2020 SMO Action Plan that the committee only periodically monitored members’ compliance with continuing professional development and professional conduct requirements. In 2009, the AAAA planned to conduct a review of the I&D system with a view to developing a plan to address the existing shortcomings. Due to lack of funding, however, the project was suspended. In 2013, the AAAA revised its disciplinary procedures although the nature of the revisions is not clear. Overall, it appears that no operational system has been established.

    Effective and efficient I&D procedures are foundational to maintaining public trust and confidence in the profession. Considering that the design and implementation of an I&D system continues to be in the development stage, CAA should take this opportunity to ensure that the resulting system incorporates international best practices in the area, including those formulated in SMO 6. During the next round of update, the CAA is encouraged to present results of a self-assessment of the new I&D system against those of SMO 6. CAA is also requested to provide information on the main elements of any systems and the role of other stakeholders in the investigation and discipline of professional accountants in the jurisdiction.

    Current Status: Plan

  • SMO 7: International Financial Reporting Standards

    The CAA, until 2020 known as Armenian Association of Accountants and Auditors (AAAA), has no direct responsibility for the adoption of IFRS and IFRS for SMEs in the jurisdiction, which have been adopted for application through laws effective in 2011 and 2017, respectively. Prior to 2020, the responsibility for adoption and translation of the standards rested with the Ministry of Finance. As of 2020, the 2012 version of IFRS has been translated and is being applied in Armenia. No processes to ensure ongoing adoption have been established, however. Effective 2020, the Public Oversight Board, which is in the process of being established at the time of the assessment, is entrusted with the promulgation of IFRS and IFRS for SMEs.

    The AAAA was involved in the translation process, assisting the Ministry of Finance, and used its best endeavors to support its membership with the implementation of the standards by providing training, certification, and workshops on the standards, as well as publications.

    The AAAA/CAA has offered a certification scheme that is based on the Association of Certified and Chartered Accountants program. The association reports that it monitors IFRS developments and updates its syllabus and examinations accordingly. However, the version of IFRS that has been incorporated into the educational programming and exams is not clear. The CAA indicates that it also offers CPD programming for its members; however, no further details were provided.

    Recognizing the CAA’s contribution to the adoption and implementation of IFRS in the jurisdiction, it is recommended that the association extend its support to the POB in its promulgation activities to reduce a time lag in the translation of the most recent international standards. The CAA is encouraged to consider the experiences of other jurisdictions and to raise awareness of the need to establish ongoing processes for translating IFRS. The CAA is also encouraged to further indicate specific actions it undertakes to support its members with the implementation of IFRS, for example, issuing implementation guidance, developing training activities, and disseminating information on developments in the international standard-setting area, among others.

    Current Status: Execute

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.

 

Contact

Karapet Ulnetsu 31
Yerevan 375037
Armenia
Tel: (+374 10) 24 16 85
Fax: (+374 10) 24 16 20
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