In 2014, the Nepal Chartered Accountants Act 1997 was amended to mandate the establishment of an independent Quality Assurance Board (QAB) that would be responsible for supervising and carrying out quality assurance (QA)...

In 2014, the Nepal Chartered Accountants Act 1997 was amended to mandate the establishment of an independent Quality Assurance Board (QAB) that would be responsible for supervising and carrying out quality assurance (QA) reviews in the jurisdiction.

Under the new legal requirements, the QAB is designed to be formally independent from ICAN and its Committees. However, ICAN contributes significantly to its formation and functions. The Board is formed by ICAN Council, which changes every three years. The QAB is chaired by a Past President of ICAN or a retired officer from the Government of Nepal. At the time of the assessment, additional information is needed regarding the operationalization of the QAB and the role ICAN now plays in carrying out QA reviews.

Prior to the establishment of this legal requirement, ICAN had proactively established a voluntary peer review system to address the need for a QA review system and requires Nepal Standard on Quality Control 1 (NSQC 1) as the applicable quality control standards. The NSQC 1 is reportedly in line with International Standard on Quality Control 1. Moreover, the institute also created a Quality Monitoring Unit to ensure proper functioning of the peer review system, trained qualified members how to conduct peer reviews, and published guidance notes and a Peer Review Manual to support members’ understanding of the process.

In its next SMO Action Plan update, ICAN is encouraged to clarify the status and role of the QAB regarding QA reviews along with other information such as the number of QA reviews conducted in 2016 and whether the QA reviews are now mandatory. It should also consider sharing the SMO 1 requirements with the QAB and collaborating with them to conduct a self-assessment of the QAB’s system against SMO 1 requirements. After completing the review, the institute should include plans within its Action Plan that it will undertake to help eliminate gaps, if any.

ICAN is directly responsible for establishing initial professional development and continuing professional development (CPD) requirements for Nepalese professional accountants, including issuing certifications...

ICAN is directly responsible for establishing initial professional development and continuing professional development (CPD) requirements for Nepalese professional accountants, including issuing certifications, conducting professional examinations, and coordinating educational curriculum with universities.

In 2014, the Nepal Chartered Accountants Act 1997, as amended in 2004, established a Board of Studies, chaired by ICAN leadership, to oversee the quality of professional education in Nepal.

In 2014, ICAN revised the Chartered Accountant Certification program’s curriculum to be in line with IES and verifies compliance with the requirements through its Board of Studies. It also works with universities to revise and update their curricula in line with IES.

As for CPD, only members who are in public practice are required to complete at least 15 hours each year and 60 credit hours in a rolling period of three years. ICAN’s CPD Committee is reportedly working to increase the hours required to be in line with IES requirements. Furthermore, ICAN Council decided that members in other industries will be required to complete certain hours of supervised learning effective July 16, 2016. More information is needed in this regard.

To enhance the monitoring process of CPD requirements, and facilitate member training, ICAN introduced an online CPD program in December 2016. As of the date of the assessment, it is unclear if the online CPD program is operational.

In its next SMO Action Plan submission, ICAN is encouraged to establish plans to review the existing requirements against the revised IES and report on any gaps, if any. Based on these findings, ICAN should then develop plans to address these areas. Lastly, ICAN is encouraged to provide input to the IAESB’s pronouncements at the exposure draft stage.

In Nepal, the Auditing Standards Board (AuSB) sets the Nepal Standards on Auditing (NSA), which have been aligned with the 2012 ISA. All company audits must be conducted by a qualified member of ICAN. ICAN provides...

In Nepal, the Auditing Standards Board (AuSB) sets the Nepal Standards on Auditing (NSA), which have been aligned with the 2012 ISA. All company audits must be conducted by a qualified member of ICAN.

ICAN provides implementation support to its members by conducting training, workshops, and symposiums on NSA to educate members and stakeholders. Additionally, it develops and disseminates implementation guidance to promote an enhanced understanding of the standards. The ICAN also makes NSA publically available on its website and distributed published NSA for its members in December 2016.

ICAN is encouraged to update its SMO Action Plan to indicate its recent and planned activities in this area, such as supporting its members with the implementation of the applicable standards. For example, ICAN could develop processes to reduce the time gap in availability of translations in order to facilitate application of the most recent standards, which include the new auditor reporting standards effective as of December 2016. In cooperation with the AuSB, if deemed relevant and feasible, ICAN is also encouraged to provide input to the IAASB’s pronouncements at the exposure draft stage during the development of new and revised ISA.

The Nepal Chartered Accountants Act 1997, as amended in 2004, provides ICAN with the mandate to regulate the accountancy profession. With that regulatory power, ICAN developed, and issued, under its own authority, the...

The Nepal Chartered Accountants Act 1997, as amended in 2004, provides ICAN with the mandate to regulate the accountancy profession. With that regulatory power, ICAN developed, and issued, under its own authority, the Code of Ethics for Professional Accountants for all professional accountants, which is aligned with the 2014 IESBA Code of Ethics with some additions to account for local practices and regulation. The ICAN reports that it plans to translate the 2014 IESBA Code of Ethics into the local language by December 2016; however, as of the date of the assessment it is unclear if the translation process has been completed.

ICAN reports that it included the requirements of the IESBA Code in its continuing professional development program and enforces its provisions through its Monitoring Committee. To further assist its members, ICAN produces case studies and issues responses to frequently asked questions related to ethics.

Lastly, ICAN also reports that it prepares directives on ethical requirements to ensure that members remain informed of any changes.

ICAN is encouraged to update its SMO Action Plan to indicate its recent and planned activities in this area, such as supporting its members with the application of the ethical standards. ICAN is encouraged to ensure that all new and revised ethical standards from IESBA’s Code of Ethics are incorporated into its own Code, for example the NOCLAR standard, which is a new inclusion in the 2016 IESBA Handbook. ICAN is also encouraged to consider participating in the international standard-setting process by reviewing and responding to exposure drafts as issued by IESBA.

In Nepal, the Accounting Standards Board (ASB) is responsible for setting the public sector accounting standards, which are based on cash-basis IPSAS and are called Nepal Public Sector Accounting Standards (NPSAS). The...

In Nepal, the Accounting Standards Board (ASB) is responsible for setting the public sector accounting standards, which are based on cash-basis IPSAS and are called Nepal Public Sector Accounting Standards (NPSAS).

The ICAN states that it maintains strong working relationships with the ASB as well as the Government. The ICAN leverages its strong relationship with both entities to promote adoption of accrual-basis IPSAS for application in Nepal.

The ICAN is encouraged to update its SMO Action Plan to indicate its recent and planned activities in this area to promote and support the adoption of accrual-basis IPSAS in Nepal to relevant authorities and provide implementation support to any of its members that may work in the public sector. ICAN could also indicate if there are already jurisdictional plans in place to transition to accrual-basis IPSAS. In cooperation with the ASB, if deemed relevant and feasible, ICAN is also encouraged to provide input at the exposure draft stage to be taken into consideration during the development of IPSAS.

Under the Nepal Chartered Accountants Act 1997, as amended in 2004, ICAN is empowered to investigate and discipline (I&D) all professional accountants and to this effect, established both a Disciplinary Committee and a...

Under the Nepal Chartered Accountants Act 1997, as amended in 2004, ICAN is empowered to investigate and discipline (I&D) all professional accountants and to this effect, established both a Disciplinary Committee and a Monitoring Committee to support its efforts with I&D.

The Disciplinary Committee conducts investigations and recommends sanctions to the Council while the Monitoring Committee monitors possible violations and breaches of professional conduct by ICAN members. The ICAN states that it performs regular reviews of its I&D system to ensure that it functions as intended. ICAN completed a self-assessment of its I&D system against the requirements of SMO 6 and identified gaps related to the investigative process and public interest considerations that require improvements.

ICAN reports that it continuously liaises with regulators of entities for which its members provide services in order to enable ICAN to impose appropriate sanctions. Moreover, all I&D cases are published in ICAN annual report and are made publically available on ICAN’s website.

ICAN indicates that it educates its members on the importance of adhering to the IESBA Code of Ethics and Rules of Conduct and potential consequences of compliance and the I&D procedures through continuing professional development programs and guidance publications on the website.

As ICAN has identified gaps in the self-assessment of its I&D system against the SMO 6 requirements, it is encouraged to prioritize the creation of a plan that it will undertake to eliminate gaps, and include this information in the next update of its Action Plan.

In Nepal, ICAN does not have any responsibility with developing accounting standards. The Accounting Standards Board (ASB) develops the applicable accounting standards, Nepal Financial Reporting Standards (NFRS), which...

In Nepal, ICAN does not have any responsibility with developing accounting standards. The Accounting Standards Board (ASB) develops the applicable accounting standards, Nepal Financial Reporting Standards (NFRS), which are aligned with the 2012 IFRS.

ICAN supports its members with application of accounting standards in the jurisdiction. It also works closely with other regulators (for example, banks, insurance companies, securities etc.) to ensure effective implementation.

ICAN and the ASB have been individually, and jointly, holding training programs, educational initiatives, workshops, and IFRS certification courses to generate awareness and to educate relevant stakeholders. The ICAN and the ASB plan to collaboratively conduct a survey on IFRS compliance in December 2018 and are also developing NFRS for Small and Medium Enterprises (SME) training in line with IFRS for SME.

The ICAN is encouraged to update its SMO Action Plan to indicate its recent and planned activities in this area, such as supporting its members with the application of the international standards. The ICAN is encouraged to continue its close collaboration and work with other stakeholders and ensure that any amendments to IFRS are incorporated into national requirements as they become available. It may also be beneficial for ICAN to consider developing processes to reduce the time gap in availability of translations in order to facilitate application of the most recent standards.