Institute of Certified Public Accountants of Bulgaria

Member | Established: 1995 | Member since 1995

The ICPAB is the only professional accountancy organization in Bulgaria, and the Accountancy Act of 2015 is what led to the establishment of the institute. Membership in ICPAB is mandatory for registered auditors.

The main functions and responsibilities of ICPAB under the Independent Financial Audit Act of 2016 include, but are not limited to: (i) maintaining and publishing the register of registered auditors and certified public accountants; (ii) organizing certification exams in accordance with the Commission for Public Oversight of Statutory Auditors’ (CPOSA) requirements; (iii) organizing a quality assurance system for its members and conducting reviews based on directives from CPOSA; (iv) monitoring compliance with relevant ethics requirements; (v) liaising with authorities on activities that support adoption of international standards and best practices in accounting and auditing, including providing comments on draft laws and regulations; (vi) supporting its members through delivery of training and dissemination of materials for certification exams and for continuing professional development, and adoption and implementation of professional guidance; and (vii) conducting research in audit, accountancy, financial analysis and other areas.

ICPAB is also a member of Accountancy Europe.

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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: 12/2017
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    ICPAB shares the responsibility for the QA review system in Bulgaria with the Commission for Public Oversight of Statutory Auditors (CPOSA) and is responsible under the Independent Financial Audit Act of 2016 for audits of non-public interest entities.

    ICPAB was very supportive of the adoption of a QA system and has been active in supporting implementation since 2008 with the provision of various technical support activities such as training and implementation guidelines, among other things. For example, each year training is offered to CPOSA inspectors and ICPAB “controllers” on ISQC 1 and other areas of quality assurance reviews prior to inspections. Also, in 2013 ICPAB reviewed its QA review system and provided appropriate update to the members of CPOSA on the revised SMO 1 requirements. After the review in 2013, ICPAB reported that its system is based on SMO 1 requirements, but the results are not available and have not been shared. A description of the mechanisms through which the system operates and annual publication on ICPAB’s quality assurance review activities would give a more complete picture of the extent of ICPAB’s compliance with SMO 1.

    ICPAB continues to collaborate with CPOSA on strengthening the QA review system, as evidenced by the joint initiative to amend Bulgarian legislation in order to align with the new EU regulations regarding statutory audits, and the requirements of ISQC 1 and SMO 1. It reports to be monitoring QA reviewers to ensure that it only engages with high-quality reviewers.

    ICPAB is also active in undertaking its own activities to support its members’ understanding of quality control standards and their ability to carry out high-quality audits within its continuing professional development program. Each year, ICPAB offers training (also in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW)) on ISQC 1 and other areas of quality assurance reviews prior to inspections. It also provides members with implementation guidelines to ensure consistent and effective implementation.

    ICPAB signed an agreement with the ICAEW to translate and publish ICAEW QA review guidance to further assist individual audit firms and sole practitioners in implementing policies and procedures that comply with ISQC 1. All translated guidance materials are available to ICPAB members on the website.

    In the next SMO Action Plan, ICPAB is encouraged to report on any developments in its QA review system in terms of achieving compliance with the European Audit Directive. ICPAB is also encouraged to consider updating the SMO 1 section during the next SMO Action Plan update to include specific recent examples of activities it undertakes.

    Current Status: Review & Improve

  • SMO 2: International Education Standards

    With partial adoption of IES in Bulgaria, ICPAB reports that it focuses on supporting their incorporation in the national requirements. In its SMO Action Plan, ICPAB reports to monitor new IES requirements and proposes relevant changes to various education providers. It also updates its own education requirements in line with new and revised IES on an ongoing basis.

    ICPAB is working with the Ministry of Education and leading economic universities to improve universities syllabi in line with IES 1. In 2015, ICPAB reports that it established a Permanent Joint Task Force Group consisting of representatives from ICPAB and the Ministry of education and universities to align the syllabi in the area of accounting, finance, auditing, with IES requirements. ICPAB also reports in its SMO Action Plan that it plans to conduct a thorough review of university syllabi in cooperation with the Commission for Public Oversight of Statutory Auditors by September 2019.

    As far as CPD requirements are concerned, ICPAB also reports that it amended its rules and procedures in line with IES 7 effective July 2015. ICPAB is active in undertaking its own activities to raise awareness of the CPD requirements and upcoming events as evidenced by the high turnout of members at trainings. In its 2015 SMO Action Plan, ICPAB reports that members participate in at least 3-5 training programs annually, and approximately 2,100 members attend trainings each year. ICPAB reports that in addition to undertaking its own activities, it also cooperates with various training providers to offer a wider variety of high quality training programs. ICPAB monitors compliance with CPD by maintaining personal electronic files for each member and through the information provided by members in their annual report to ICPAB. In cases of non-compliance, ICPAB implements sanctions whereby it can fine its members and/or deny them the right to practice for up to two years. Repeat offenders lose their licenses and are removed from the registry of registered auditors.

    ICPAB proactively translates the standards and other pronouncements of the IAESB. It has a formal procedure for the translation process and the 2014 versions of the standards have been translated and are in use.

    ICPAB is encouraged to review the national requirements against those of the revised IES (effective as of July 2016) and, if gaps exist, consider working with other stakeholders to bring the national requirements in line with those of the revised standards. Furthermore, ICPAB is encouraged to translate the revised IES. Lastly, if deemed feasible, ICPAB is also encouraged to consider collaborating with other stakeholders to jointly participate in the international standard-setting process by providing comments on exposure drafts and other pronouncements issued by the IAESB.

    Current Status: Execute

  • SMO 3: International Standards on Auditing

    ICPAB has no direct responsibility for the adoption of ISA; however, it proactively translates and disseminates the standards and other pronouncements of the IAASB. ICPAB has a formal procedure for the translation process and as of the date of the assessment, ICPAB reports that the 2016–2017 version of the standards have been translated.

    ICPAB offers approximately 17–20 courses for continuing professional development training on ISA-related topics each year. In its SMO Action Plan, ICPAB reports to be delivering courses and seminars for its members on a variety of audit-related topics with a focus on new and/or revised standards. It also reports to monitor its members’ application of ISA, including new and revised standards.

    If deemed feasible, ICPAB is encouraged to participate in the international standard-setting process by providing comments on the IAASB Exposure Drafts and participating in other public consultations.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    ICPAB has required its members to comply with the IESBA Code of Ethics since 2002. ICPAB reports that it has established an ongoing process for reviewing new and revised pronouncements of the IESBA. As of the date of the assessment, the 2016 version of the IESBA Code of Ethics for Professional Accountants has been adopted for all professional accountants in the jurisdiction.

    ICPAB reports to monitor the issuance of new and/or revised IESBA Code of Ethics and strives to ensure timely translations for its members. ICPAB also obtains comments from members on the new and/or revised IESBA Code of Ethics to assess their impact on implementation.

    To assist members with implementation, ICPAB hosts continuing professional development events and training programs on ethics. For example, it developed and established an educational and training program on the IESBA Code of Ethics and incorporated a separate one day session on professional ethics and independence for candidates seeking the registered auditor qualification. ICPAB also offers implementation guidance to members via its Intranet.

    ICPAB is encouraged to consider specific training and other implementation support activities for the NOCLAR standard (effective 2017). ICPAB is also encouraged to participate in the international standard-setting process by providing comments on the IESBA Exposure Drafts and participating in other public consultations.

    Current Status: Review & Improve

  • SMO 5: International Public Sector Accounting Standards

    ICPAB does not have responsibility for the adoption of IPSAS in Bulgaria. However, it promotes adoption of IPSAS by liaising with the Government on IPSAS and related matters and through public consultations with representatives from the Government and international participants. While there seems to have been limited activities between 2010 and 2013, in 2014 ICPAB began the process to increase awareness of the need to adopt the standards through a task force with the Ministry of Finance and the National Audit Office. The task force conducted a survey on the current accounting framework and practices of the Government. In addition, in March 2014 ICPAB held a meeting with representatives from the Ministry of Finance to raise awareness of the importance of IPSAS in addition to organizing a roundtable event to further promote IPSAS adoption in 2009.

    In its next SMO Action Plan update, ICPAB is encouraged to include recent activities related to promoting the adoption of IPSAS. ICPAB may consider developing a strategic plan to engage with the responsible parties in Bulgaria and international bodies or counterparts in order to maintain momentum in supporting adoption of IPSAS in Bulgaria. It should also consider disseminating information on updates issued by the IPSASB, and supporting members providing services in the public sector, if any, with the implementation of the existing requirements.

    Current Status: Execute

  • SMO 6: Investigation and Discipline

    ICPAB shares responsibility for investigation and discipline (I&D) of the profession with the Commission for Public Oversight of Statutory Auditors (CPOSA). In accordance with the Independent Financial Audit Act of 2016, and with the support and cooperation of ICPAB, CPOSA established an I&D system to address infractions made by registered auditors in the conduct of statutory audits. With respect to ICPAB’s direct responsibilities, it has established an I&D system for its members in accordance with its bylaws, whereby the disciplinary committee works closely with the professional ethics and the audit services quality assurance boards to address violations by its members. In addition, ICPAB pursues full compliance by periodically reviewing I&D mechanisms and by informing members about the processes and procedures that are in place.

    ICPAB reports to have developed amendments to the Independent Financial Audit Act of 2016, to strengthen both I&D systems and align them with the revised SMO 6 requirements. Nevertheless, it remains unclear if ICPAB is considering including non-accountants in its disciplinary committee to incorporate all the main requirements.

    ICPAB is encouraged to develop specific plans with timelines to include non-accountants in its disciplinary committee and include these in its next SMO Action Plan update. ICPAB is also encouraged to continue working with the CPOSA to ensure that the requirements in the jurisdiction are in line with those of SMO 6 and to report on the extent of alignment in the next SMO Action Plan update.

    Current Status: Execute

  • SMO 7: International Financial Reporting Standards

    ICPAB has no direct responsibility for the adoption and implementation of IFRS in Bulgaria. It focuses on supporting its members by keeping them informed of new and/or revised IFRS through continuing professional development course offerings, ICPAB newsletters, and the ICPAB website. ICPAB reportedly organizes and delivers approximately 20–22 annual training courses and/or seminars for its members on IFRS amendments and additions.

    Lastly, ICPAB reports to be in the process of establishing a system to monitor its members’ application of IFRS through the QA review system.

    In its next SMO Action Plan Update, ICPAB is encouraged to consider including progress made in establishing a system to monitor its members’ application of IFRS through the QA review system.

    Current Status: Review & Improve

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

22, Iskar Street, 2nd Floor
1000 Sofia
Bulgaria
Tel: 359-2/950-0777
Fax: 359-2/950-0777
ides@ides.bg
http://www.ides.bg

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