Institute of Chartered Accountants of Sierra Leone
Member | Established: 1988 | Member since 1995
The ICASL was established under the ICASL Act of 1988 and its membership is comprised of Chartered Accountants who, after receiving a practicing certificate from the institute, are the only individuals authorized to conduct audits in the jurisdiction. The ICASL Act authorizes the institute to: (i) establish initial and continuing professional development requirements for professional accountants; (ii) establish ethical requirements and financial reporting standards; (iii) establish a quality assurance mechanism and investigative and disciplinary procedures to monitor and enforce compliance with standards; (iv) issue practicing certificates and register auditors; and (v) promote the collective interest of its members.
In addition to being a member of IFAC, ICASL is a member of the Association of Accountancy Bodies in West Africa and the Pan African 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
Section 9 of ICASL Act of 1988 authorizes ICASL to establish mechanisms to ensure that its members maintain proper application of the standards. This is interpreted to mean that ICASL has direct responsibility for establishing a quality assurance (QA) review mechanism. ICASL has adopted ISQC 1 as the quality control standard and had previously planned to delegate the operations of the QA review system aligned with SMO 1 best practices to the Sierra Leone Accountability Foundation (SLAF). The SLAF, however, is not operational as of 2019 although there were plans to meet in March 2019 to reconstitute the foundation.
ICASL has steadily been making plans to progress with the implementation of a QA review system for its members since 2017 when firms agreed to undergo QA reviews in the public interest. In February 2019, ICASL made a formal agreement with a QA reviewer from Zambia to review files of six audit firms. The reviews are scheduled to take place in December 2019; firms that do not participate will not have their practicing licenses renewed. ICASL states that the review procedures would meet the SMO 1 best practices.
ICASL indicates that the reviewer will offer training after the reviews and outline steps for improvement if there are deficiencies and any non-compliance with standards identified.
ICASL’s commitment to undertaking QA reviews in the public interest is commendable. As part of the preparation process, the institute may consider offering training—or bring in the contracted reviewer to conduct training—for members on what to expect when undergoing a QA review. ICASL is also encouraged to review and complete the SMO 1 best practices/checklist prior to the QA review process to ensure that the reviews are done in accordance with best practice.
SMO 2: International Education Standards
The ICASL Act of 1988 empowers the institute to establish initial and continuing professional development requirements (IPD and CPD, respectively) for professional accountants. In order to use the designation of Chartered Accountant, (ACA(SL)) as conferred by ICASL, candidates must complete a program of professional accountancy education, have three years of practical experience and receive a recommendation from the partner or firm where they completed their practical experience, and pass final examinations. According to a joint agreement with the ICASL, the Association of Chartered Certified Accountants (ACCA) is responsible for the delivery of the accountancy education program and administering the final examinations. ICASL can deliver computer-based examinations to students for the ACCA exam. As reported by the ACCA, its IPD programming aligns with the 2015 revised IES.
ICASL, in partnership with ICAN, is also offering an Accounting Technician (AT) qualification to graduates who have passed the Association of Accountancy Bodies of West Africa’s Accounting Technician Scheme, West Africa. Graduates of the ATSWA may proceed to the ICAN CA qualification or the ACCA’s CPA qualification. ICASL is working with tuition providers to teach toward the ATWSA examination content to better support students although it notes that getting textbooks and study materials for students is a challenge. In October 2019, ICASL entered into talks with the Institute of Public Administration and Management (IPAM), which is a part of the University of Sierra Leone, to sign an MoU that would enable students of IPAM to study toward the ATSWA. Presently, the ICASL does not have the resources to hold its own examination on Sierra Leone’s business and legal requirements to ensure that candidates who hold the diploma from ACCA or foreign institutes have knowledge of these areas. The ATSWA is intended to help mitigate this as it is more tailored to the regional context although the ICASL has a long-term objective to hold examinations that emphasize competencies over theory.
The institute notes that most candidates are working while studying for their CPA qualification and fulfill their practical experience requirement in this way. ICASL has helped place some students who have already passed examinations with employers.
In regards to CPD, ICASL requires its members to comply with CPD requirements which are 40 CPD credits per year. In 2018, the institute offered three trainings and in 2019, it has four planned with the most recent being in January 2019 on IFRS. ICASL members must submit evidence of compliance with CPD to ACCA, which handles any issues of non-compliance.
Lastly, the institute is planning to produce an ICASL magazine to enhance communications with members on matters that impact their day-to-day work and therefore, the skills and knowledge they need to employ.
ICASL is encouraged to consider obliging its members to submit CPD returns to the institute in order to ensure that members are meeting their CPD obligations. Alternatively, taking into consideration available resources, the ICASL could reach an agreement with the ACCA to establish a channel of communications and information exchange regarding CPD compliance so that ICASL remains aware of any cases of non-compliance amongst its members.
SMO 3: International Standards on Auditing
While the Sierra Leone Companies Act of 2009 contains extensive provisions on auditors’ obligations and their appointment, it does not specify which auditing standards are to be applied for audits. De facto, the ICSAL is the body responsible for setting auditing standards and as auditors must be a member of the institute to practice publicly, they must follow the institute’s regulations. ICASL states that ISA as issued by the IAASB are to be applied and communicates all updates to its members when issued by the IAASB.
ICASL also reports that under a new draft of ICASL Act it has submitted to the Parliament, it has proposed that the institute be legally authorized to set auditing standards and ISA should be adopted by reference. The new legislation is still pending review and approval by Parliament at the time of the assessment.
The institute offers continuing professional development courses on ISA, but its members primarily receive internal trainings from the firms. The schedule of training workshops has been slowly rebuilt after the Ebola outbreak in 2014–2015 and in Q1 of 2018 the institute offered trainings on the 2018 ISA, which includes the auditor’s report.
ICASL notes that the upcoming implementation of quality assurance (QA) reviews will assist in confirming members’ proper implementation of the ISA and where more support is needed.
The institute is encouraged to update its SMO Action Plan to reflect more recent and relevant activities that it is undertaking in this area, especially as related to supporting the implementation of the 2016–2017 ISA and the new auditor’s reporting standards. Additionally, the 2018 Handbook is now effective, which includes revised standards ISA 250 and 540. ICASL should consider outlining plans raising awareness through its website and/or planned magazine and implementation support for the new standards as part of its overall activities in this area.
SMO 4: Code of Ethics for Professional Accountants
In accordance with the ICASL Act, the ICASL is responsible for setting ethical requirements. The ICASL has issued its own Code of Ethics which is generally based on the IESBA Code of Ethics. For 2019, the ICASL has reported plans to present a new Code of Ethics—based on a more recent version of the IESBA Code of Ethics although the exact version remains to be specified—to its Council for review.
In July 2019, ICASL offered a continuing professional development training on ethical requirements, including NOCLAR and the institute is working with a consultant to roll out trainings on the institute’s new Code of Ethics.
ICASL’s plans to update its Code of Ethics to be based on the IESBA Code of Ethics are promising. Overall, the institute is encouraged to outline the steps it will take to do this throughout 2019 (i.e. when it might present the new Code to Council; and confirming what version of the IESBA Code it is referencing in developing its Code). Importantly, in light of the upcoming June 2019 effective date of the 2018 International Code of Ethics, which is a completely restructured and rewritten Code, ICASL should consider reviewing and referencing this version of the IESBA Code as it finalizes its own Code of Ethics this year. Resources and guidance on the 2018 Code can be found here. ICASL is also encouraged to indicate when trainings on the new Code will be offered.
SMO 5: International Public Sector Accounting Standards
In accordance with the Public Financial Management Act 2016, financial statements are to be prepared in accordance with such internationally accepted accounting standards as specified by the Accountant General in consultation with ICASL. Further, the Act specifically states that the statements of the Consolidated Fund, which in is composed in essence of all government revenues, are to be prepared in accordance with IPSAS. ICASL states that cash-basis IPSAS have been adopted and that the institute is proposing a framework for the transition to accrual-IPSAS. There are challenges with the transition process such as dealing with fixed assets and evaluating natural assets and resources. There is also a lack of infrastructure capacity such as an Integrated Financial Management Systems (IFMIS) system.
ICASL indicates that there is close collaboration between the institute and the Auditor and Accountant General offices and agency staff attend continuing professional development offered by ICASL. ICASL also notes that the Ministry of Finance is offering training on IPSAS as well and the institute has been engaged with the President’s office to support public sector performance and enhanced public financial management. Furthermore, the institute was also invited by the African Union to partake in regional meetings regarding IPSAS as part of a five-year work plan to adopt accrual-IPSAS across the continent.
ICASL’s engagement with public sector stakeholders on public financial management matters is commendable. The institute is encouraged to continue its involvement in this area and should update the SMO 5 section within its SMO Action Plan following IFAC staff’s guidance to demonstrate its future plans in collaboration with the Accountant General.
SMO 6: Investigation and Discipline
ICASL is authorized to investigate and discipline professional accountants. ICASL’s I&D procedures at the time of the assessment are outlined as follows: when an official complaint is brought to the Director or President it will be submitted to Council. ICASL’s Council reviews the complaint and forwards it to the investigation committee. The investigation committee will then determine whether it should proceed to a disciplinary hearing or not. The disciplinary committee may then hear the case and may issue certain sanctions. An appeals mechanism is available within the institute. In 2018, the institute handled two cases.
In 2016, ICASL reported that its system falls short of SMO 6 best practices such as non-accountants serving on the disciplinary committee; liaison with outside bodies; having definitions of misconduct; and certain administrative processes such as independent review of complaints. It has been planning to revise its I&D system to bring it in line with SMO 6 pending the approval of a new ICASL Act which is with Parliament for review and approval. For example, the draft Act includes more sanctions that the institute can issue and proposes the reorganization and redistribution of the responsibilities between the Secretariat and the Office of the Director in order to maintain the autonomy of the Council.
The institute recently met with the President of Sierra Leone in January 2019 to advocate for the passage of the new legislation. In the interim, it is considering having professional accountants that are also lawyers serve on the committees as a first step in addressing the gap of non-accountants participating in the I&D procedures.
The institute is encouraged to review and reassess its current I&D mechanism against the SMO 6 best practices. Based on any continuing gaps, ICASL should establish plans to address the gaps that it has authority over in the short-term while awaiting the passage of new legislation. As ICASL enhances its I&D procedures, it is encouraged to indicate how it is communicating with members and the public to understand I&D procedures and members’ understanding of consequences of non-compliance. ICASL may find the CAPA’s guidance on I&D useful as it considers how to strengthen its I&D system.
SMO 7: International Financial Reporting Standards
The Companies Act of 2009 requires the application of IFRS as adopted by ICASL. The ICASL has delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate and Institutional Governance (CSAAG), which operates under the aegis of the Sierra Leone Accountability Foundation (SLAF). The SLAF—which was established in 2009—was intended to be a multi-stakeholder, independent standard-setting and monitoring body for the accounting and auditing profession. As of 2019, however, the SLAF is not operational.
The CSAAG has nonetheless adopted IFRS for public interest entities such as, listed companies, banks and non-bank financial institutions, and insurance companies. The CSAAG also adopted IFRS for SMEs under CSAAG BPR2/2009, Board Paper Resolution 29, December 2009. All entities that are not required to use IFRS or the (national) public benefit entity standard (Composite Financial Reporting Standard for Public and Private Not For Profit Entities (CS 1), which also aligns with IFRS for SMEs) are permitted to use the IFRS for SMEs. As new and revised IFRS are issued, the standards become effective in the country.
For its part, ICASL offers training on IFRS on an annual basis to support practitioners’ implementation. The institute received feedback from its members that further support on IFRS 9 is needed and consequently, the first training of 2019 was on this standard. It does note that monitoring compliance is difficult, especially for SMEs.
The ICASL is encouraged to update it’s the SMO 7 section of its Action Plan following IFAC’s guidance and comments. One action could be an outline of a timeline and plans to re-establish SLAF in collaboration with other key stakeholders to support standard-setting and monitoring compliance in the jurisdiction. The institute could also indicate if and how it disseminates information to members regarding the IFRS aside from training.
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