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Egyptian Society of Accountants & Auditors

Member | Established: 1946 | Member since 1980

The ESAA is a voluntarily professional accountancy organization established by a Royal Decree in 1946 and given further statutory recognition by Ministerial Order No. 2280. Resolution 554 of 2007 mandates the ESAA to raise the technical and practical awareness of its members and ensure the profession operates in accordance with international best practice. Its responsibilities include: (i) setting initial and continuing professional development requirements for its members; (ii) promoting the EFSA Code of Ethics for its members registered with the EFSA (there are no other ethical requirements established by the ESAA for its members); (iii) establishing an investigative and disciplinary system for its members; and (iv) proposing revisions to the Egyptian Accounting Standards and Egyptian Standards on Auditing Review and Other Assurance Services to the Minister of Investment and International Cooperation.  In addition to being a member of IFAC, ESAA is a member of the Federation of Mediterranean Certified Accountants.

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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.

Last updated: 01/2022
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    Law No. 10 of 2009 empowers the Egyptian Financial Services Authority (EFSA) to establish a quality assurance (QA) review system for auditors that are licensed to conduct audits of listed companies and Non-Banking Financial Institutions (NBFIs). The EFSA created the Auditors Oversight Board (AOB), which has been carrying out QA reviews since 2008 and has adopted the 2015 version of ISQC 1 and ISA 220. As such, the ESAA states it has no responsibility for operating a QA review system and has reported it will promote the requirements of the SMO 1 to the EFSA. During 2018–2019 an agreement has been signed between EFSA and ESAA so that ESAA provides technical support to the AOB through the training of its staff and to the audit firms to achieve a high level of quality assurance. As of 2020, the ESAA indicates that EFSA’s QA system’s fulfillment with SMO 1 requirements is still under review.

    ESAA reports that there is a draft law on the Accounting and Auditing Practice, developed in coordination with the Ministry of Finance (MoF), which would establish a Supreme Council of Accounting and Auditing as the authority that regulates, develops, and oversees the accounting and auditing profession. Under the new law, the Supreme Council would be responsible for overseeing and delegating the responsibility for operating a mandatory QA review system for all audits. Currently, only audits of listed entities and NBFIs regulated by EFSA are subject to inspections as mentioned above. During 2018–2019 extensive meetings were held by the MoF to discuss the draft with civil society institutions and PAOs to make its observations on the law and its effects on the profession in preparation for submission to Parliament.

    While the new law is still under consideration, ESAA indicates that it has continued to promote the need to develop and adopt a QA system for all audits to the Syndicate of Commerce—Accountants and Auditing (SOC)—the other professional accountancy organization in Egypt which is responsible for the regulation of all professional accountants and auditors.

    ESAA states that it supports its members that are subject to the EFSA’s QA reviews by providing technical support such as control checklists and regular trainings, and disseminating information on quality control and QA through printed and online sources. Since 2016, ESAA has reported it is considering a mandatory QA review system for its members who perform audits of financial statements for non-listed entities; however, the ESAA would need to modify its by-laws to enforce a mandatory system. Presently, the ESAA ensures member firms and professionals that are eligible to train students are compliant with quality control requirements. Additionally, ESAA does investigate complaints regarding quality and takes action, however a full QA system requires amendments to the bylaws. Finally, the ESAA has reported that it is considering the implementation of a voluntary quality control assessment program for all firms (not only those which train students) to receive results apart from the EFSA QA review system, but this does not has not progressed as rapidly as desired by ESAA leadership. ESAA will be focusing on advancement of its internal QA system in the coming years.

    Given the uncertainty on the timeline to adopt the new draft law, the ESAA is encouraged to provide more details and information about its plan to (i) develop a voluntary QA program for its members who perform audits of financial statements for non-PIE entities; and (ii) describe it engagement with SOC on establishing a QA review system to cover all audits. The ESAA should indicate clear intended completion dates in its Action Plan. ESAA is also encouraged to update its Action Plan to reflect the current status of its activities to support its members and the EFSA, including completing the assessment checklist of the SMO 1 requirements and sharing it with the EFSA to ensure its procedures meet international best practice. Lastly, ESAA is encouraged to monitor and support the implementation of ISQM1 among members when it becomes effective as of December 15, 2022. Resources on the quality management standards are available on the IAASB website.

    Current Status: Execute

  • SMO 2: International Education Standards

    The Accounting Law No. 133 of 1951 establishes Initial Professional Development (IPD) for all professional accountants and auditors. The main requirement for obtaining a practicing license as a professional accountant or auditor is a bachelor’s degree in accounting and three to five years of practical experience. Achievement of these basic requirements allows a candidate to obtain a membership certificate from the Syndicate of Commerce—Accountants and Auditing (SOC) and register in the general register for accountants and auditors, which is maintained by the Ministry of Finance (MoF). A certification process, including a qualifying exam and continuing professional development (CPD) to maintain the certification, is not required by the jurisdiction.

    ESAA is a voluntary membership PAO and as such, is only authorized to set educational and training requirements for its members. Candidates for ESAA membership must satisfy one of the following conditions: (i) have at least three years of full-time work experience in the office of a practicing ESAA member, and complete of the ESAA’s two-part examination; (ii) hold membership in the Institute of Chartered Accountants in England and Wales, or another acceptable foreign professional body (provided they pass the ESAA’s examinations on Egyptian tax law and Egyptian company law); or (iii) hold a doctoral degree in accounting with three years of experience in practice. ESAA reported in 2016 that its IPD and CPD requirements were in line with the IES requirements, and the institute has processes in place to review the requirements on an ongoing basis and update its curriculum as needed.

    The institute works to promote the incorporation of the IES requirements to the government and universities. The ESAA notes that several of its members are professors and instructors at Egyptian universities and promote the implementation of the IES.

    In October 2015, the ESAA launched an accountancy academy to provide IPD and CPD professional training for its members. Although not required by law, the ESAA has instituted a mandatory CPD requirement for it is members of 120 hours over three years and established a process to monitor compliance with CPD requirements. In September 2016, the ESAA and the Association for Chartered Certified Accountants (ACCA) signed a strategic partnership agreement to strengthen ESAA’s CPD programming and knowledge sharing by offering local qualification developments, such as IFRS. From this partnership, ESAA members are exempted from 9 out of 14 papers to pass ACCA exams and gain recognition and certification by ACCA.

    The ESAA is encouraged to clarify whether the revised IES have been incorporated into the IPD and CPD requirements, and provide an update on the plan to promote the incorporation of the 2019 revised IES. Alignment with the IES requirements is an important foundation for a strong accountancy profession at all levels. ESAA is encouraged to review and complete the IES Checklist developed by IFAC which may be useful in progressing with the adoption of the revised requirements of the IES, especially IES 2, 3, 4 and 8 that are effective as of January 2021. The revisions to these standards reflect the need for competency-based approaches as well as the increasing demand for accountants skilled in information and communications technologies and place further emphasis on professional skepticism skills and behaviors, which ESAA is working to integrate into IPD. ESAA may also consider utilizing the IFAC Accountancy Education E-Tool to review the current version of IESs and share these requirements with its members and stakeholders.

    Current Status: Execute

  • SMO 3: International Standards on Auditing

    ESAA is not authorized to adopt auditing standards in Egypt. The Minister of Investment and International Cooperation (MoI) sets the Egyptian Standards on Auditing Review and Other Assurance Services (ESAROAS), which take into consideration ISA but are currently based on the 2015 version. The ESAA has a Standards Committee that monitors standards and pronouncements issued by the IAASB to propose revisions to the ESAROAS and maintain alignment with the ISA.

    To support its members, ESAA states it provides regular trainings on the ESAROAS on an ongoing basis through its accountancy training center, publishes articles in its magazine on any changes to the ISA, and disseminates new exposure drafts issued by the IAASB.

    ESAA is encouraged to provide an update and detailed information on its efforts and actions to promote the need to bring the ESAROAS in line with the ISA to the MoI. The latest 2020 IAASB Handbook, which included the revised ISA 250 and 540, is effective, and the ESAROAS does not incorporate any of the new or revised standards since 2015, meaning significant changes may not be applied in audits within the jurisdiction. Within its scope of authority, the ESAA is encouraged to include the most recent version of ISA into its continuing professional development and training programs to support members’ awareness and preparation should the MoI update the ESAROAS. Lastly, The IAASB has issued an exposure draft of the proposed separate standard for audits of Less Complex Entities. ESAA is encouraged to participate in the public consultation process for this landmark new draft standard.

    Current Status: Execute

  • SMO 4: Code of Ethics for Professional Accountants

    Ethical requirements in Egypt for all professional accountants and auditors are established by the Syndicate of Commerce—Accountants and Auditing (SOC). SOC has issued a Code of Ethics not aligned with the IESBA Code of Ethics, as reported by the World Bank (2002). Professional accountants and auditors must adhere to the SOC requirements to be included in the General Register for the Accountants and Auditors, which is maintained by the Ministry of Finance (MoF). Auditors and accountants, subject to the Egyptian Financial Services Authority (EFSA) oversight, are subject to the Egyptian Code of Ethics (ECE) issued by EFSA, which, as ESAA indicates, is based on the 2006 IESBA Code of Ethics. The ESAA notes that the EFSA has not updated the ECE to be aligned with the most recent version of the IESBA Code of Ethics. The ESAA has not set any ethical requirements for individuals that voluntarily join its membership, but it is in the process of doing so (pending Board approval which is subject to delay due to the COVID-19 pandemic).

    ESAA’s Standards Committee reportedly monitors developments to the IESBA Code, compares the ECE with the revisions to the IESBA Code of Ethics, publish the differences in its magazine, and subsequently, encourages the SOC, MoF, and EFSA to incorporate amendments to the existing Codes. However, it seems that ECE and other ethical requirements remain unaligned with most recent updates to the IESBA Code of Ethics.

    To support its members that are registered with the EFSA, the ESAA states it maintains the ECE on its website as an online resource and trains and educates members on the requirements of the ECE. ESAA also informs its new members about the possible sanctions in the case of a breach of professional standards, including ethical requirements. In addition, ESAA disseminates information to its members on the IESBA Code of Ethics through its website and magazine.

    The ESAA is strongly encouraged to strengthen its initiatives related to SMO 4 and ethical requirements, which are a cornerstone of the global accountancy profession. Unless legally restricted, the institute should adopt ethical requirements that meet the 2021 International Code of Ethics for Professional Accountants as a self-regulatory requirement for its membership base that joins the ESAA voluntarily. It should also provide further details related to the advocacy efforts it has undertaken to promote the adoption of the latest IESBA Code to the SAE, MoF, and EFSA for application of all professional accountants in Egypt. Finally, to support members, the ESAA could include both the ECE and the IESBA Code of Ethics into its continuing professional development and training programs to support members’ awareness and implementation.

    Current Status: Execute

  • SMO 5: International Public Sector Accounting Standards

    The Ministry of Finance (MoF) is responsible for adopting public sector accounting standards, which at present are cash-basis public sector accounting standards. The Egyptian Society of Accountants and Auditors (ESAA) reports that there is no timeline or plans to adopt International Public Sector Accounting Standards (IPSAS) in the immediate future but that it works to raise awareness of IPSAS and promote adoption.

    ESAA reported that it held meetings with MoF consultants in 2014 and 2015 to discuss the adoption of IPSAS; however, there were no tangible outcomes from these meetings and dialogue on the subject decreased. However, ESAA indicates it will continue to identify opportunities to raise awareness of the standards and engage with regulators.

    ESAA has stated that if the MoF announces plans to adopt IPSAS, it would support by providing awareness building and technical training on the subject.

    ESAA advocacy efforts around IPSAS adoption are positive, although the ESAA should continue to identify opportunities for dialogue and engage with the MoF on the importance of adopting IPSAS—the 2021 IPSASB Handbook is in effect as of January 2021. It may also find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful for any advocacy and/or educational activities it offers.

    Current Status: Review & Improve

  • SMO 6: Investigation and Discipline

    Investigation and Discipline (I&D) requirements in Egypt for all professional accountants and auditors are established by the Syndicate of Commerce—Accountants and Auditing (SOC). SOC has established an I&D system, which, as reported by ESAA is not in-line with SMO 6 best practices. In addition, auditors subject to the Egyptian Financial Services Authority (EFSA) oversight, are also subject to I&D mechanisms established by EFSA. The ESAA states that EFSA’s I&D system incorporates most of the SMO 6 best practices. The ESAA reported meetings in 2014–2015 with SOC and EFSA to advocate for aligning the I&D procedures with international best practices outlined in SMO 6. However, neither organizations’ procedures seem to have been updated.

    Meanwhile, the ESAA is authorized to establish an I&D system for its members that voluntarily join the institute and has an Investigation and Discipline Committee, which conducts the I&D procedures and makes a recommendation to ESAA’s board. ESAA states it communicates the consequences of misconduct and non-compliance with professional standards to its members through its website, training courses, and its magazine.

    In 2020, the ESAA conducted a self-assessment of its internal I&D system against the revised SMO 6 requirements and indicated that several areas required improvements, such as, no information about the types of misconduct; no link with the results of QA reviews done by the EFSA; only professional accountants serve on the committee; the limited range of penalties; and results of the I&D procedures are not made publicly available, among others. Since 2016, the ESAA has indicated that it would need to modify its by-laws to align its I&D system with the SMO 6 requirements.

    In 2017, a new law was issued concerning associations which required ESAA to modify its by-laws. The ESAA states that it drafted new sanctions that would align its I&D system with SMO 6 best practices and, in 2018, submitted the new by-laws for approval from the Board. These modifications are still under discussion and the ESAA plan to focus on strengthening I&D as part of its areas for improvement in the coming years.

    I&D procedures are foundational to maintaining public trust and confidence in the profession, and the I&D procedures must meet the SMO 6 benchmark. ESAA’s system appears to continue to have gaps in this regard, and it is recommended that it invest its resources in strengthening its procedures and subsequently advise and assist the SOC and EFSA with strengthening their mechanisms. Alongside the actions, ESAA should indicate where it needs support from other stakeholders, such as the government, or knowledge sharing from other regional PAOs.

    Current Status: Execute

  • SMO 7: International Financial Reporting Standards

    The Ministry of Investment and International Cooperation (MoI) is recognized as the accounting standard-setter in Egypt and has adopted Egyptian Accounting Standards (EAS) based on IFRS. In 2019, the MoI issued Decision No. 69/2019 adopting EAS, which are based on the 2018 IFRS, for all Public Interest Entities (PIEs). The EAS includes special requirements for small and medium-sized entities. The IFRS for SMEs is not under consideration. The IFRS Foundation and the ESAA note that the EAS does not incorporate all the requirements of the most up to date version of IFRS.

    The ESAA is therefore not authorized to adopt applicable accounting standards but plays an active role in monitoring differences between the EAS and the IFRS and promoting the need to update the EAS to the MoI. This is the responsibility of the ESAA’s Standards’ Committee which communicates any changes to the IFRS to the MoI in order to incorporate the changes to the existing EAS. ESAA’s process seems to have been effective as ESAA reports the MoI has prepared EAS based on the 2018 version of IFRS and the 2009 IFRS for SMEs based on the drafts submitted by the Standards’ Committee.

    To support its members with the implementation of the standards, ESAA provides ongoing trainings on the EAS with emphasis on the new, revised standards and incorporates the standards into its examinations. It also delivers seminars on IFRS implementation and IASB pronouncements and disseminates information on the international developments in the area and on the EAS through articles in its magazine. Furthermore, the ESAA offers an IFRS Diploma for members to demonstrate their competencies concerning international standards and held preparation courses for members obtaining the IFRS Diploma.

    ESAA is encouraged to demonstrate examples of its advocacy efforts with the MoI to fully align the EAS with the latest version of the IFRS. It should also note if it provides implementation support, such as manuals or guides, for its members. The IFRS Foundation has Arabic translations of the IFRS readily available that the institute may consider sharing amongst its members and other stakeholders to support understanding and implementation. The institute could also consider advocating for the adoption of IFRS for SMEs as a permissible framework to bring SME reporting in line with international best practices.

    Current Status: Review & Improve


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.


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