Institute of Certified Public Accountants of Cyprus
Member | Established: 1961 | Member since 1977
The ICPAC was established in 1961 in accordance with the provisions of the Companies Law, Cap. 113. ICPAC membership is comprised of practicing and non-practicing accountancy professionals. Practicing professionals are accountants and auditors in public practice who possess a practicing certificate and provide accounting, audit, tax, consulting, company administration services, insolvency and other services. Non-practicing accountancy professionals work in the public and private sectors and are not required. In accordance to the Law, all statutory auditors and audit firms must be registered with a Recognised Body of Auditors (RBA). As of the date of the assessment, ICPAC is the only RBA in Cyprus.
ICPAC, as an RBA, was delegated the following duties: (i) application of technical standards and of other standards on professional ethics and internal quality control of registered auditors and statutory audit work, including provision for securing compliance with those standards; (ii) establishing and maintaining the public register of auditors and audit firms; (iii) registration of individuals or firms satisfying the criteria of the Auditors Law of 2017; (iv) implementing procedures for maintaining the competence of registered auditors; (v) monitoring of registered auditors and audit work; and (vi) implementing an investigative and disciplinary (I&D) system for accountants, accounting firms, and students whereas the CyPAOA is responsible for the implementation of an I&D system for all statutory auditors and audit firms.
In addition to being a member of IFAC, ICPAC is a member of Accountancy Europe and the Mediterranean Federation of 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
The Cyprus Public Audit Oversight Authority (CyPAOA) is responsible for the quality assurance (QA) review system for the audits of financial statements in accordance with the Auditors Law of 2017. Following the enactment of a formal agreement initially signed on 12 September 2017 and subsequently revised on 10 July 2020, ICPAC has been officially delegated the responsibility of conducting a QA review system for firms that audit non-public interest (PIEs) entities while CyPAOA conducts QA reviews of audit firms that audit PIEs.
ICPAC administers the system with the assistance of the Association of Chartered Certified Accountants (ACCA). ICPAC reports in its 2021 SMO Action Plan that its system is fully aligned with SMO 1 requirements and incorporate supervision for anti-money laundering purposes. Upon completion of its review of the revised requirements of SMO 1 in 2014, ICPAC incorporated the necessary changes and raised member awareness of the requirements.
ICPAC reports that it regularly reviews its QA review system to maintain alignment with SMO 1 requirements and will continue to work closely with CyPAOA to ensure continued alignment at the jurisdiction level.
The Institute notes that it supports its members in their implementation of quality control and auditing standards by providing educational and training programs. ICPAC also provides up-to-date, relevant information in its monthly technical alert, quarterly magazine, Accountancy Cyprus and facilitates access to IFAC Global Knowledge Gateway.
ICPAC offers a number of educational seminars for its members in order to strengthen their knowledge and compliance. The QA review team is properly qualified and trained by the ACCA. Furthermore, the Prevention and Suppression of Money Laundering Activities Law renders ICPAC as the Supervisory Authority for auditors and trust and company service providers for anti-money laundering purposes.
The new suite of Quality Management standards will become effective in 2021-22 and will require significant change management for regulators and firms. To prepare auditors in the jurisdiction for the implementation of the standards, the ICPAC is encouraged to closely follow the developments and publication of implementation support materials, raise awareness of its members about the forthcoming change, and update its educational programming to ensure that its members are sufficiently prepared for the application of the standards once they become effective.
SMO 2: International Education Standards
With initial professional development (IPD) requirements established in the law, ICPAC is responsible for their implementation as well as for administering, training and monitoring of the continuing professional development (CPD) program.
ICPAC reports in its SMO Action Plan that it established an ongoing process to review the requirements of the revised IES and determine whether its IPD and CPD requirements comply with those of the revised IES. ICPAC reports that the revision of the requirements of its CPD scheme to align with IES 8 were completed by December 2016. In 2022, ICPAC completed a comprehensive review of the existing educational requirements for professional accountants in the jurisdiction against those of revised 2019 IES and confirms alignment.
ICPAC reports that it uses email and the institute’s quarterly magazine and website to ensure that members and other stakeholders are informed of any updated or revised standards. ICPAC collaborates with the Association of Chartered Certified Accountants (ACCA), its partner in the joint examination scheme, to ensure that the examination and CPD syllabi incorporate new and revised international accounting, auditing, internal control, and ethical standards. ICPAC members are subject to a mandatory CPD program which entails 40 hours of relevant CPD annually. Members are required to make an annual declaration of their CPD fulfillment.
In addition, ICPAC delivers a wide range of courses and training opportunities to its members. In 2016, the Institute together with ACCA provided CPD training to focus on the revised IES 8.
SMO 3: International Standards on Auditing
Until the European Commission adopts ISA, the Law requires application of ISA as issued by IAASB in Cyprus.
A number of duties were delegated to the Institute of Certified Public Accountants (ICPAC) via a formal agreement initially signed on 12 September 2017 and subsequently revised on 10 July 2020. ICPAC, as a Recognised Body of Auditors (RBA), was delegated the duty to enforce audit procedures or requirements for members, which as of the date of the assessment is ISA as issued by IAASB.
ICPAC focuses on ensuring that members of the profession have access to the necessary education and training for implementing new and revised standards and translations of the standards in Greek.
Whenever new ISA pronouncements are issued, ICPAC provides practical guidance via technical circulars to its members. ICPAC circulates the update to its members and has designs and offers educational presentations for all its members to familiarize themselves with the new standards.
The Institute reports to monitor the IAASB work program, review exposure drafts, and disseminate information on changes to members of the profession and other stakeholders via email, its monthly technical alert, its quarterly magazine, Accountancy Cyprus and its new website that was launched in early 2015.
ICPAC indicates that it collaborates with the Hellenic Accounting and Auditing Standards Oversight Board (ELTE) and the Cyprus Public Audit Oversight Board on translating IAASB pronouncements into Greek according to IFAC translation policy. As of the date of the assessment, the latest translation of the ISA Handbook available is of 2010, along with revisions from the 2016 Handbook (namely ISA 260, ISA 570, ISA 700, ISA 701, ISA 705, ISA 706, and ISA 720).
The 2020 IAASB Handbook is the latest edition of the Handbook which is currently in effect. Access to translations of international standards is an important implementation support tool. ICPAC is encouraged to continue collaborating with the ELTE and CyPAOB to establish an ongoing process that would reduce the time lag & ensure that the latest version is being properly applied.
SMO 4: Code of Ethics for Professional Accountants
ICPAC shares responsibility for the adoption of ethical standards for the accountancy profession with Cyprus Public Audit Oversight Board, which mandates application of the IESBA Code of Ethics for all auditors. In addition, ICPAC’s regulations require its members, both auditors and non-auditors, to comply with the IESBA Code of Ethics. ICPAC collaborates with the Hellenic Accounting and Auditing Standards Oversight Board (ELTE) to translate the requirements into Greek. As 2022, the 2015 version of the IESBA Code has been translated into Greek and disseminated to members.
ICPAC reports that it supports the ongoing adoption and implementation of the Code of Ethics by monitoring the IESBA’s work programs and circulating all new and revised pronouncements to its members and the public. ICPAC reports to have adopted the 2021 version in its entirety and distributed printed versions of the Handbooks to its members. A link to the electronic version of the 2021 Handbook is also available on the ICPAC website.
New information, as well as clarifications and practical guidance, is disseminated via email, the monthly technical alert, quarterly magazine, and the IESBA Code of Ethics for Professional Accountants Handbook is made available on an annual basis. ICPAC has provided dedicated alerts on the upcoming revisions in the 2021 Handbook, such as revisions on NAS and fee-related provisions. Additionally, ICPAC provides a variety of courses in the initial professional development and continuing professional development programs on IESBA pronouncements to raise awareness, improve understanding, and enhance compliance with the requirements. Finally, the institute reviews IESBA exposure drafts and participates in Accountancy Europe’s relevant group.
Access to translations of international standards is an important implementation support tool. ICPAC is encouraged to collaborate with the ELTE to establish an ongoing process for the translation and publication of the International Code of Ethics to reduce the time lag & ensure that the latest version is being properly applied.
SMO 5: International Public Sector Accounting Standards
Although ICPAC has no direct responsibility for the adoption of public sector accounting standards in Cyprus, it indicated in its 2021 SMO Action Plan that it promotes the adoption of IPSAS to the Accountant General—the authority responsible for setting public sector accounting standards.
ICPAC has established a Public Sector Committee and the committee members participate as observers in a Government Steering Committee that was established to explore the adoption and implementation of accrual IPSAS. ICPAC reports that the Government’s Steering Committee has issued an action plan outlining a timeline to convert from the currently applicable cash-basis accounting standards to the accrual-basis standards. The action plan was launched in April 2016 by the Treasury Department and is expected to be completed in 2023.
ICPAC’s Public Sector Committee also monitors the IPSASB’s work program and provides updates to members via email and the institute’s quarterly magazine, Accountancy Cyprus. The institute intends to disseminate information on IPSAS on the ICPAC website.
The Institute reports that it collaborates with the Ministry of Finance and the Public Administration and Finance Committee for the training of ICPAC members who work in the public sector. On average, ICPAC organizes two education seminars annually designed and available only for public sector members of the Institute.
ICPAC is encouraged to participate in the international standard-setting process by providing comments on IPSASB Exposure Drafts, if deemed relevant.
SMO 6: Investigation and Discipline
The new Auditors Law of 2017 enforces an investigation and disciplinary (I&D) system for all firms in the jurisdiction under the direct responsibility of the Cyprus Public Audit Oversight Authority (CyPAOA).
However, a formal agreement initially signed on 12 September 2017 and subsequently revised on 10 July 2020 requires the Institute of Certified Public Accountants of Cyprus (ICPAC) to transfer all disciplinary cases and other complaints received pertaining to statutory auditors or audit firms to the CyPAOB for processing. ICPAC remains the delegated authority for I&D of accountants, accounting firms, and students.
The I&D process of ICPAC for accountants, accounting firms, and students, is two-fold. It involves the regulatory function and a disciplinary system. The regulatory function issues are identified through the Quality Assurance system while issues related to misconduct, ethics and disciplinary action are covered by the Disciplinary system. Both the Regulatory Committee and the Disciplinary Committee are independent of the management and Council of ICPAC and can impose any conditions or penalties they consider appropriate. There is no distinction between disciplinary measures and sanctions for different types of entities. The disciplinary procedures of ICPAC are followed for each case, which is considered in its own merit.
The progress of the administrative I&D process is reviewed on a monthly basis by the ICPAC Council. Wherever appropriate, ICPAC reports information to and liaises with other competent authorities and professional organizations on this area. National judicial system investigations and rulings take precedence over the ICPAC I&D process. The institute reports that the system was last reviewed in 2021 during the revision of ICPAC’s I&D Regulations to ensure that they continue to comply with the requirements of revised SMO 6.
In addition, ICPAC raises awareness of the I&D system to the public and its members via a designated section on I&D matters on its website that was launched in 2015. ICPAC is publishing an updated version of the Members’ Handbook detailing the new I&D procedures in line with the amended law by December 2021.
SMO 7: International Financial Reporting Standards
ICPAC has no direct responsibility for the adoption of corporate sector accounting standards, but has a well-established process for supporting adoption and implementation of EU-endorsed IFRS.
The Institute monitors the IASB work programs, and reviews exposure drafts and other pronouncements released by the IASB through the European Financial Reporting Advisory Group. ICPAC also disseminates updates on IASB information to its members and key stakeholders via email, its monthly technical alert, its quarterly magazine, its website, and makes copies of the IFRS bound volumes available.
Furthermore, the Institute ensures that initial professional development and continuing professional development programs include educational resources and courses on standard-related topics, and provides technical support to members on the implementation of the standards. ICPAC is in the process of signing an agreement with an external organization for the provision of technical advice on international financial reporting and auditing.
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.