Expert Accountants' Association of Turkey
Member | Established: 1942 | Member since 1977
EAAT was established in 1942 as a voluntary membership organization for accountancy professionals that hold Certified Public Accountant (CPA), or Sworn-In Certified Public Accountant (Sworn-In CPA) titles from the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB). It has no formal legal recognition or powers. EAAT awards the Expert Accountants Certificate to members, which is a privileged qualification but does not give its holder any practicing rights. EAAT and TÜRMOB cooperate on strengthening the accountancy profession in Turkey. EAAT is a member of IFAC.
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
The EAAT is not responsible for establishing a quality assurance (QA) review system; however, it reports that it has been supporting the Public Oversight, Accounting and Auditing Standards Authority (KGK) and the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB) with the implementation and results of their respective quality assurance review systems, which both align with SMO 1 best practices.
EAAT and TÜRMOB have a QA Taskforce and through this taskforce, EAAT and TÜRMOB develop related training programs and maintain communication with the KGK. Currently, the institutes are working on translations of the quality management standards.
In addition, EAAT reports that it participates in recruiting members to become QA reviewers,
The new suite of Quality Management standards that will become effective in 2021-22 will require significant change management for regulators and firms. EAAT is encouraged to continue its collaboration with TURMOB and KGK to prepare members and raise awareness of the changes from quality control standards to quality management standards.
SMO 2: International Education Standards
EAAT, an organization with voluntary membership, sets educational requirements for individuals who wish to join. Members of EAAT are first required to meet education requirements as prescribed by TÜRMOB and then fulfill additional requirements set by EAAT, by submitting a dissertation paper and passing an oral examination with its membership committee. EAAT awards the Expert Accountants Certificate to members, which is a privileged qualification but does not give its holder any practicing rights and is more academic in nature.
EAAT reports that it works closely with TÜRMOB and supports the Public Oversight, Accounting and Auditing Standards Authority (KGK) in activities related to professional education. EAAT indicates that TÜRMOB’s requirements were updated to reflect revisions from the 2015 IES and that it monitors discussions held by the International Panel on Accountancy Education.
EAAT members are required to complete 120 hours of Continuous Professional Development (CPD) each year and offers a CPD calendar. It applies an input-based approach. EAAT monitors if its members are fulfilling the CPD obligations set by the institute, TÜRMOB, and the KGK as appropriate.
Revised requirements of the IES 2, 3, 4 and 8 are effective as of 2021. The revisions to these standards reflect the increasing demand for accountants skilled in information and communications technologies and place further emphasis on the professional skepticism skills and behaviors. These apply to both aspiring and professional accountants. Given that EAAT members must fulfill TURMOB’s educational requirements, EAAT is encouraged to demonstrate how it is coordinating with TURMOB to ensure that these revisions are adopted and implemented by education providers so that professionals in Turkey have the necessary competencies. The Accountancy Education E-Tool and the IES Checklist developed by IFAC may be useful to identify implementation support materials.
SMO 3: International Standards on Auditing
The Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660 states that auditing and assurance standards are issued by the KGK under the title of Turkish Auditing Standards (TDSs). KGK has published national standards complying with ISAs issued by IAASB with small amendments to take into consideration the Turkish environment. The 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is the latest version adopted by KGK.
EAAT states that its role is to promote full convergence with ISA and to support its members with the implementation of the standards through trainings and other educational activities. Additionally, EAAT focuses on supporting the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB) in the translation of the IAASB pronouncements, the operation of the quality assurance review system that ensures proper implementation of ISA; providing an ISA Guide for Small and Medium Practices; and offering educational and training courses that incorporate ISA requirements. EAAT provides a link on its website to the KGK’s dedicated page on auditing standards and reports that it is working with TÜRMOB on translating the 2018 Handbook for their membership.
Additionally, EAAT collaborates with academics to prepare and publish articles on ISA and related topics and disseminate new and revised IAASB pronouncements. Lastly, EAAT reports to obtain comments from technical experts to comment on IAASB exposure drafts.
The 2018 Handbook is now effective, which includes revised standards ISA 250 and 540. EAAT is encouraged to indicate the timeline for translating the Handbook and plans to raise awareness of its requirements as part of implementation support.
It is recommended that EAAT also further indicate its activities on implementation support, such as seminars, sessions that focus on key challenges with regards to implementation, and discussion of tools and technology to facilitate ISA implementation to support its members with the implementation of the latest standards.
SMO 4: Code of Ethics for Professional Accountants
The Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660 provides general authority to the Public Oversight, Accounting and Auditing Standards Authority (KGK) to issue ethical standards in compliance with international standards for auditors. The KGK presently requires adherence to the 2018 International Code of Ethics. Specific authority for the issuance of a Code of Ethics for other professional accountants is vested in TÜRMOB. TÜRMOB has also adopted the 2018 International Code of Ethics, which is, in turn, applicable to all EAAT members.
EAAT reports that it continues to work together with TÜRMOB in the translation of the 2018 International Code of Ethics and intends to have the translation ready by July 2021. Additionally, through its training and website, EAAT provides members with access to updates, resources, and guidance about the IESBA Code of Ethics. Between May and November 2020, it offered two trainings on ethics for members.
EAAT is also planning to provide comments on Exposure Drafts issued by the IESBA.
EAAT should take note of future revisions to the Code, including revisions to Part 4B of the Code to reflect terms and concepts used in the IAASB's International Standard on Assurance Engagements (ISAE) 3000 (Revised), which will come into effect in June 2021 and revisions to promote the role and mindset expected of all professional accountants which are effective in December 2021. These upcoming revisions should be incorporated into its educational and advocacy plans with TURMOB, KGK, and other stakeholders.
SMO 5: International Public Sector Accounting Standards
The Public Financial Management and Control (PFMC) Law of 2006 requires the Government of Turkey to adopt international accounting standards in the public sector. Public Accounting Standards Board of Turkey (DMSK) is the entity responsible for overseeing this work. EAAT reports that, since 2003, the Central Government has been implementing a modified accrual-basis of accounting (IFAC, CIPFA) and is working to converge its standards with IPSAS. In 2019, the Public Accounting Standards Board of Turkey (DMSK) issued 30 Government Accounting Standards based on IPSAS standards and plans to issue 8 additional Government Accounting Standards in 2020.
While EAAT has no direct authority for the adoption of public sector standards in Turkey, it reports to support the convergence process by participating in the DMSK’s work program committee and encouraging the regulator to submit comments on Exposure Drafts issued by IPSASB. Additionally, it has been working with TURMOB to encourage relevant authorities to maintain an ongoing process to translate the most recent version of IPSAS into Turkish in accordance with IFAC Translation Policy as part of the DMSK standard-setting process.
EAAT is encouraged to continue its advocacy and support for the DMSK. As part of this, it should continue monitoring international developments in this area and disseminate information on IPSAS and the value the standards bring to public financial management amongst its members and key stakeholders through its publications. It is also encouraged to include IPSAS-related material in its training and educational activities for members who might work in the public sector. It may find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful in this regard. Furthermore, EAAT is encouraged to consider additional events to promote adoption and implementation of IPSAS including organizing roundtables to meet key stakeholders and users of financial information; and continuing to provide trainings and technical expertise to the government.
SMO 6: Investigation and Discipline
All EAAT members are subject to at least the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB)’s enforcement system, which largely meets the SMO 6 benchmark. Its members might also be subject to sanctions by the KGK if they are auditors.
EAAT has a Disciplinary Board for its members, comprising the EAAT President and three members. It mostly functions to apply any sanctions as handed down by TÜRMOB, which has the legal authority for I&D in Turkey among professional accountants. EAAT’s Disciplinary Board is closely connected with TÜRMOB’s system whereby any disciplinary action taken by TÜRMOB will also be taken by the EAAT.
As all EAAT members are subject to TURMOB’s system, EAAT advertises and promotes members’ participation in TURMOB workshops to raise member awareness of I&D procedures. Between 2011-2017, six I&D workshops were offered to members, and a seventh is planned for 2020.
Given that its members might be subject to both TURMOB and KGK disciplinary procedures, the EAAT is encouraged to collaborate with both entities to determine what, if any, actions may be taken to have a unified approach to enforcement efforts in the jurisdiction that meets global best practices.
SMO 7: International Financial Reporting Standards
The Public Oversight, Accounting and Auditing Standards Authority (KGK), which was established in accordance with the Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660, is responsible for setting corporate accounting standards in Turkey.
KGK requires the application of Turkish Financial Reporting Standards (TFRS) which are fully converged with IFRS as issued by IASB for the financial statements of all public interest entities (PIEs). Other companies are permitted to apply IFRS or the Financial Reporting Standard for Large and Medium Sized entities (BOBI FRS) established by the KGK. Differences between BOBI FRS and IFRS for small and medium-sized entities (SMEs) are outlined here. The 2009 version of IFRS for SMEs has been translated into Turkish.
EAAT does not have authority for the adoption of accounting standards but it does have an active role in the implementation process. EAAT supports TÜRMOB in the process of translating IFRS in accordance with the IFRS Foundation Translation Policy. It also participates in the international standard-setting process by providing comments on Exposure Drafts issued by the IASB.
EAAT also supports its members with the application of accounting standards by providing access to guidance on its website and updating the education (IPD), examination, and training (CPD) curricula to incorporate new and revised Turkish Financial Reporting Standards.
EAAT is encouraged to continue to raise awareness of IFRS and emerging issues on adoption and implementation in the country. EAAT could coordinate with TURMOB and consider to what degree advocating for the adoption of IFRS for SMEs would help bring SME reporting in line with international best practices and would benefit the SME financial reporting environment in its country.
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