Institute of Chartered Accountants of Jamaica
Member | Established: 1968 | Member since 1977
The ICAJ was established by the Public Accountancy Act of 1968 as the accounting and audit standard-setter in the jurisdiction. While the Public Accountancy Board (PAB) is the entity primarily responsible for regulating Public Accountants, it entered into an agreement with ICAJ to share responsibilities for: (i) conducting quality assurance reviews; (ii) conducting an investigations and disciplinary system; (iii) establishing ethical requirements; and (iv) conducting continuing professional development for Public Accountants. A person wishing to be registered as a Public Accountant in Jamaica needs to become a member of ICAJ.
In addition to being a member of the International Federation of Accountants, ICAJ is also a member of the Institute of Chartered Accountants of the Caribbean.
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 Public Accountancy Act of 1968 (as amended) requires the establishment of a mandatory quality assurance (QA) review system for all audits in Jamaica. The Act established the Public Accountancy Board (PAB) as the entity authorized to conduct QA reviews the audits of all financial statements.
PAB and ICAJ entered into an agreement to share responsibilities for ensuring unified standards for the control, monitoring, and discipline of all registered Public Accountants in Jamaica.
In 2007, ICAJ together with PAB and the Institute of Chartered Accountants of the Caribbean contracted with the Association of Chartered Certified Accountants (ACCA) to assist it in implementing a practice monitoring and QA review system. The program was launched in January 2012. According to ICAJ, the scope and design of the QA review system is aligned with SMO 1 requirements.
ICAJ reports that it collaborates with ACCA to ensure that the QA review system is operating effectively and undergoes periodic reviews to ensure continued alignment with SMO 1 requirements.
ICAJ also notes its ongoing efforts to raise awareness and educate its members about QA and encourages compliance with ISQC 1. ICAJ states that it assists members in improving audit quality using the results of the practice reviews and offers training on undergoing practice reviews and on how to address weaknesses identified during reviews.
The institute carries out a series of training events on the QA review system, with the most recent series being completed in November 2019 for small and medium-sized practitioners.
Lastly, ICAJ also disseminates guidance materials issued by IFAC on quality control issues to its members via seminars, workshops, and its website.
SMO 2: International Education Standards
Public Accountancy Act 1968 empowers the Public Accountancy Board (PAB) to set the initial professional development and continuous professional development requirements for registered Public Accountants in Jamaica.
A person wishing to be registered as a Public Accountant in Jamaica needs to become a member of ICAJ. ICAJ sets out a list of accountancy organizations whose members are eligible to apply for ICAJ membership. These include: (i) Association Chartered Association of Certified Accountants; (ii) Institute of Chartered Accountants in England and Wales; (iii) Institute of Chartered Accountants in Scotland; (iv) Institute of Chartered Accountants in Ireland; (v) Chartered Professional Accountants of Canada; and (vi) American Institute of Certified Public Accountants.
The listed organizations require aspiring candidates to complete a professional accountancy education program, practical experience requirements, and pass final examinations that are reported to meet the 2015 revised IES requirements. Individuals who are members of professional accountancy bodies other than above, but which satisfy requirements relating to qualification in the field of accountancy and have a minimum of three years practical experience may also apply to register as a Public Accountant.
As final examinations of the above-mentioned PAOs do not include an examination on Jamaican tax and business laws, ICAJ formed a task force to review and prepare a framework for developing the educational requirements that incorporate Jamaican law, business environment and Jamaican taxation examination papers by January 2020.
ICAJ also indicates that it dialogues with stakeholders such as the PAB to promote having national accountancy education requirements that are aligned with the revised 2015 IES requirements.
ICAJ reports that the CPD requirements are in line with IES 7 and 8. ICAJ members are also required to follow their qualifying (overseas) institute’s CPD requirements and to declare their CPD compliance via an online system. To support its members with fulfilling their continuing professional development (CPD) requirements, ICAJ issued a CPD Guidelines (2018) document available on the website.
Finally, ICAJ reports to have been participating in the international standard-setting process by providing comments on Exposure Drafts that were previously issued by IAESB.
The revised IES emphasize the need for professional accountants to demonstrate competencies to carry out their roles. IES 6 outlines the need for an assessment of professional competence at the conclusion of their initial professional development. The institute is encouraged to continue with its plans to have a formal examination on local legislation for aspiring ICAJ members as part of its registration and membership process to ensure that practicing professional accountants are equipped to best serve the public. Any timeline or developments in this regard should be included within its Action Plan.
SMO 3: International Standards on Auditing
The Companies Act of 2004 (as amended) requires that all financial statements be audited in accordance with standards adopted and issued by ICAJ. As of 2019, ICAJ reports that it adopted ISA as issued by the IAASB for application in the jurisdiction.
Having adopted ISA, ICAJ focuses on supporting implementation and compliance amongst its members. The institute offers training and hosts workshops on ISA in addition to disseminating resources via email, its website, and member portal with an emphasis on any new developments. ICAJ has included ISAs in its education, training, and continuing professional development materials and has established mechanisms to distribute information on recent developments and revisions issued by the IAASB.
To keep members informed, ICAJ issues advisories on its website that alert to any changes in rules or regulations. For example, ICAJ issued an advisory on its website to alert members of new auditor reporting standards, effective for audits of financial statements for periods ending on or after December 15, 2016.
Additionally, ICAJ has established an Audit Practice Committee with the responsibility for reviewing proposed standards and communicating the final standards to its membership. This committee also responds to IAASB documents and Exposure Drafts.
As the 2018 Handbook becomes fully effective in December 2019, including revised standards ISA 250 and 540, ICAJ should also consider outlining its activities for raising members’ awareness of the revisions.
SMO 4: Code of Ethics for Professional Accountants
Under the Public Accountancy Act of 1968, the Public Accountancy Board (PAB) has a statutory responsibility to establish ethical requirements for registered Public Accountants. PAB requires registered Public Accountants to comply with the ethical requirements issued by ICAJ.
ICAJ adopted the International Code of Ethics as issued by IESBA, and subsequently focuses on providing training and including ethics topics in education, training, and continuing professional development activities, as well as disseminating information on IESBA updates on the Code of Ethics to its members via its website.
ICAJ members are provided with guidance material on the application of the code of ethics to enhance their understanding and compliance with the requirements. The institute also provides links on its website to exposure drafts and consultations issued by IESBA.
Given the significant changes of the 2018 International Code of Ethics, ICAJ is encouraged to include specific examples of its implementation support within its Action Plan. ICAJ could consider sharing the new IESBA eCode—a virtual tool to support practitioners—amongst its members.
SMO 5: International Public Sector Accounting Standards
The Ministry of Finance and Planning (MoF) is responsible for setting public sector accounting standards. ICAJ reports that the MoF has amended its financial laws to require central government entities to prepare financial accounts using cash-basis IPSAS; and local government entities to prepare financial accounts using accrual-basis IPSAS. As of the date of the assessment, the MoF commenced implementation of cash-basis IPSAS for the 2019/20 financial year. According to Ministry Paper 56 (September 11, 2002), the MoF plans to require accrual-basis IPSAS for all public sector entities but the specific timeframe is unknown.
ICAJ has appropriately focused its activities on promoting, raising awareness, and working with the MoF to progress the implementation of accrual-basis IPSAS. For example, ICAJ conducted a two-day seminar to train MoF officials on accrual-basis IPSAS.
ICAJ also notes it has developed training activities and established communication channels for distributing information on recent developments and revisions issued by the IPSASB. In addition, the institute’s public sector committee has been responding to IPSASB consultations and Exposure Drafts.
SMO 6: Investigation and Discipline
In accordance with the Public Accountancy Act of 1968, the Public Accountancy Board (PAB) is responsible for maintaining an investigation and disciplinary (I&D) system for Public Accountants. PAB and ICAJ entered into an agreement to share responsibilities for operating the system. ICAJ reports that the I&D system is aligned with SMO 6 requirements.
ICAJ’s Investigations Committee consists of at least 5 people with power to appoint a non-accountant. The Investigations Committee may forward cases to the Disciplinary Committee, which will provide an opportunity for a hearing. Sanctions imposed by the Disciplinary Committee could be appealed by the Appeal Committee. All findings and decisions of the Appeal Committee are reported to the Council. ICAJ publishes the results of the Disciplinary Committee in the ICAJ newsletter, website, and/or national newspaper.
ICAJ’s bylaws contain guidelines for the investigation and discipline of misconduct, including breaches of professional standards and rules by individual members. To support members with understanding the I&D procedures, ICAJ publishes any updates and guidance material on its website.
The institute reports that it will conduct a review of the system between 2019-2021 to ensure that the system continues to align with SMO 6 requirements.
In the next SMO Action Plan update, ICAJ is encouraged to provide an update on the results of the review to ensure that the overall system continues to be aligned with the requirements of SMO 6.
SMO 7: International Financial Reporting Standards
The Companies Act of 2004 (as amended) outlines the formation and operation of companies and stipulates the requirements for the preparation of their financial statements. The Companies Act stipulates that all limited companies must present financial statements, including, when appropriate consolidated financial statements. ICAJ is authorized by the Public Accountancy Act as the standard-setter in the jurisdiction and ICAJ has adopted IFRS and IFRS for SMEs as the applicable accounting standards. Observance of ICAJ-issued accounting standards is required under the legal and regulatory framework for entities directly supervised by the Bank of Jamaica, the Financial Services Commission, and the Jamaica Stock Exchange.
Having adopted IFRS and IFRS for SMEs, ICAJ focuses on supporting its members with the implementation of the standards by offering training and education. It established the Accounting Standards Committee (ASC), which is responsible for reviewing and monitoring the publication of all IFRS, as well as the Exposure Drafts and discussion papers.
The ASC monitors the application of the standards through a system of routine reviews of published and other audited financial statements.
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