Institute of Chartered Accountants of Nepal

Under the Nepal Chartered Accountants Act 1997, the Quality Assurance Board (QAB) is responsible for supervising and carrying out quality assurance (QA) reviews in the jurisdiction. The QAB operates within the Institute of Chartered Accountants of Nepal (ICAN) and continues to issue annual reports, maintain a QA information booklet, and provide practice support materials for firms, including a model audit practice manual and related implementation resources.

ICAN has continued to support implementation through outreach and training activities. Recent ICAN materials indicate that technical sessions and interaction programs with audit firms have addressed audit quality, documentation, and the transition to Nepal Standards on Quality Management 1 and 2. ICAN has also reported ongoing discussions with firms as part of the QA process and continued publication of QAB annual reports to communicate findings and expectations.

Regulatory developments have also affected fulfillment. Nepal Standards on Auditing 2024 are now in place, while Nepal Standards on Quality Management 1 and 2, Nepal Standard on Auditing 220 (Revised), Nepal Standard on Auditing 600 (Revised), and Nepal Standard on Related Services 4400 (Revised) become mandatory from 17 July 2026. This means ICAN’s QA system is still operating in a transition period as firms and reviewers prepare for full quality management implementation.

Nevertheless, the scope of the QA review system remains limited to listed entity audits and certain other selected firms rather than all mandatory audits. As a result, ICAN continues to demonstrate active support for SMO 1 implementation, but jurisdiction-level gaps remain and the fulfillment status is best assessed as Review & Improve.

ICAN should continue working with the relevant authorities to expand QA review coverage to all mandatory audits and further strengthen member and reviewer support for implementation of NSQM 1, NSQM 2, and related revised standards.

Current Status: Review & Improve

Under the Nepal Chartered Accountants Act 1997, the Institute of Chartered Accountants of Nepal (ICAN) remains directly responsible for establishing and administering initial professional development and continuing professional development requirements for Chartered Accountants in the jurisdiction. ICAN continues to oversee professional examinations, practical experience requirements, certification, and the work of its Board of Studies.

Recent developments indicate continued strengthening of ICAN’s education framework. ICAN formally launched a new Chartered Accountancy syllabus in May 2025, developed in collaboration with the Institute of Chartered Accountants in England and Wales and described by ICAN as aligned with international best practices and the International Education Standards. ICAN has also updated related training components, including information technology training syllabi, and continues to provide structured education pathways for students and members.

ICAN also continues to provide implementation support through mandatory Continuing Professional Education programs, updated CPE Guidelines issued in 2025, online learning modules, and regular in-person and virtual training sessions for members on technical and professional topics. Recent notices and publications indicate ongoing CPE delivery during 2025, including multi-day training programs and continued monitoring of member compliance with CPE requirements.

At the jurisdiction level, the framework remains aligned with the requirements of Statement of Membership Obligations 2, and ICAN continues to demonstrate active, ongoing fulfillment through education oversight, curriculum modernization, and member development activities. Accordingly, the fulfillment status is assessed as Sustain.

Current Status: Sustain

Under the Nepal Chartered Accountants Act 1997, the Auditing Standards Board is responsible for establishing auditing standards in the jurisdiction, while the Institute of Chartered Accountants of Nepal (ICAN) continues to support implementation through training, guidance, and member outreach. Recent developments show that Nepal Standards on Auditing 2024, based on the 2021 International Auditing and Assurance Standards Board Handbook, are now effective for mandatory application for audits of financial statements for periods beginning on or after 17 July 2025, while Nepal Standards on Quality Management 1 and 2 and certain revised related standards become mandatory from 17 July 2026.

ICAN has continued to provide implementation support to members during this transition. Recent ICAN publications and notices indicate training and outreach on quality management related auditing standards, scenario-based audit reporting, and other audit implementation matters. ICAN has also issued practice resources relevant to audit work, including updated manuals and technical materials for members.

These developments indicate continued progress in ICAN’s support for the implementation of Statement of Membership Obligations 3. However, because the jurisdiction remains on a time lag and has not yet adopted the most recent International Standards on Auditing in effect at the time of the assessment, jurisdiction-level gaps remain. Accordingly, the fulfillment status is assessed as Review & Improve.

ICAN should continue supporting the Auditing Standards Board in reducing the time lag in adoption and expand implementation support for members and reviewers as Nepal Standards on Quality Management 1 and 2 and related revised standards become mandatory.

Current Status: Review & Improve

Under the Nepal Chartered Accountants Act 1997, the Institute of Chartered Accountants of Nepal (ICAN) is responsible for establishing ethical requirements for professional accountants in the jurisdiction. ICAN has adopted a national Code of Ethics based on the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), with the current framework based on the 2021 edition.

Recent developments indicate progress in strengthening the ethical framework. ICAN has issued an updated Code of Ethics 2023 and continues to advance the process of incorporating subsequent revisions to the IESBA Code. ICAN also supports implementation through mandatory continuing professional development (CPD) requirements that include ethics training, publication of guidance materials such as on non-compliance with laws and regulations, and dissemination of case studies and frequently asked questions. Monitoring and enforcement are carried out through ICAN’s regulatory and disciplinary mechanisms.

These activities demonstrate ongoing efforts to support the implementation of SMO 4. However, as the most recent version of the IESBA Code in effect at the time of the assessment has not yet been fully adopted and made effective in the jurisdiction, a gap remains at the jurisdiction level. Accordingly, the fulfillment status is assessed as Review & Improve.

ICAN should continue its efforts to adopt and implement the latest version of the IESBA Code in a timely manner and provide continued guidance and training to members to support effective implementation.

Current Status: Review & Improve

Under the Government of Nepal’s public financial management framework, the Accounting Standards Board is responsible for developing public sector accounting standards, and Nepal Public Sector Accounting Standards remain based on the cash-basis International Public Sector Accounting Standards.

The Institute of Chartered Accountants of Nepal (ICAN) continues to play an active supporting role in the implementation of International Public Sector Accounting Standards (IPSAS) through its public sector initiatives. ICAN maintains ongoing collaboration with key public sector stakeholders, including the Ministry of Finance, the Office of the Auditor General, and regulatory authorities, and continues to support the implementation of Nepal Public Sector Accounting Standards through technical input and policy engagement.

ICAN’s Public Finance and Nepal Public Sector Accounting Standards Committee remains active in promoting public sector financial reporting reforms. Recent activities include preparation of technical studies on NPSAS implementation, engagement with government authorities on public financial management reforms, and continued development of capacity-building initiatives for members, including training and planned certification programs in public financial management. ICAN also facilitates knowledge dissemination through seminars, workshops, and professional guidance to support implementation at the jurisdiction level.

These activities demonstrate that ICAN continues to use its best endeavors to support the adoption and implementation of IPSAS in the jurisdiction in line with Statement of Membership Obligations 5. Accordingly, the fulfillment status is assessed as Sustain.

Current Status: Sustain

Under the Nepal Chartered Accountants Act 1997, the Institute of Chartered Accountants of Nepal (ICAN) is responsible for establishing and operating an investigation and disciplinary (I&D) system for all professional accountants in the jurisdiction.

ICAN continues to maintain a structured I&D framework comprising a Disciplinary Committee and a Monitoring Committee, supported by a Disciplinary Division under its Technical Directorate. The Disciplinary Committee is responsible for investigating complaints and recommending sanctions, while the Monitoring Committee identifies potential cases of non-compliance. ICAN’s Disciplinary Investigation Procedures 2019 remain in force, providing formalized processes, timelines, and sanctions aligned with best practices.

Recent developments indicate that ICAN continues to strengthen its enforcement and monitoring mechanisms. The Unique Document Identification Number system remains in place and mandatory for practicing members issuing audit and other assurance reports, enhancing traceability and accountability. ICAN also continues to publish disciplinary outcomes in its annual reports and communicates updates through member portals and regular publications, supporting transparency and public awareness.

ICAN provides ongoing support through continuing professional development programs, guidance materials, and outreach to educate members on ethical requirements, professional conduct, and the consequences of non-compliance. ICAN also maintains coordination with relevant regulators and authorities to support effective enforcement where necessary.

At the jurisdiction level, the I&D system remains operational and incorporates the key elements of investigation, discipline, and enforcement consistent with the requirements of SMO 6. Accordingly, the fulfillment status is assessed as Sustain.

Current Status: Sustain

Under the Nepal Chartered Accountants Act 1997, the Accounting Standards Board is responsible for developing accounting standards in the jurisdiction, while the Institute of Chartered Accountants of Nepal (ICAN) does not have direct standard-setting authority but supports implementation of International Financial Reporting Standards (IFRS Accounting Standards) through its activities.

ICAN continues to support implementation of Nepal Financial Reporting Standards (NFRS), which are based on IFRS Accounting Standards, through training, outreach, and stakeholder engagement. ICAN regularly conducts continuing professional development programs, workshops, and seminars for members and other stakeholders on the application of NFRS. It also collaborates with regulators, including those overseeing banking, insurance, and capital markets, to promote consistent application of standards across sectors.

ICAN further contributes to the standard-setting process by reviewing and responding to exposure drafts issued by the Accounting Standards Board and international standard-setters where relevant. It also supports capacity building through IFRS-related certification programs and technical guidance materials to assist members in applying evolving standards.

Recent developments indicate continued engagement by ICAN in supporting the rollout and application of updated NFRS, including outreach on revised and new standards and coordination with national authorities on implementation matters.

These activities demonstrate that ICAN continues to use its best endeavors to support the implementation of SMO 7. Accordingly, the fulfillment status is assessed as Sustain.

Current Status: Sustain