Iraqi Union of Accountants and Auditors
Member | Established: 1969 | Member since 1984
IUAA is a professional accountancy organization uniting accountants and auditors in Iraq. The union is committed to continuously enhancing the reputation of the profession in Iraq and supporting the growth and skills development of professional accountants through the various associations it oversees.
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 Law of the Iraqi Union of Accountants and Auditors No. 185, 1969 establishes the requirement for a QA review system for all audits of financial statements. The IUAA reports that ISQC 1 was adopted and the QA review system is administered by the Quality Assurance & Inspection Committee (QAIC). Despite being formally independent, the QAIC’s development and functions are supported by the IUAA Board.
After the revised SMO 1 requirements were issued in 2012, the IUAA indicates that it reviewed the requirements of the QAIC system against SMO 1, and supported the QAIC in making adjustments necessary to ensure continued compliance. Furthermore, the IUAA reports that it supports the QAIC in developing education programs to raise awareness of the importance of QA reviews and quality control standards, including the requirements of ISA 220 and ISQC 1, which have been adopted. Additionally, the IUAA indicates it intended to hold a workshop in 2014 in order to raise awareness of SMO 1 requirements; however, it is unclear if the institute progressed with the initiative as planned.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff in order to provide more information on the activities it is currently undertaking to support its members in this area.
SMO 2: International Education Standards
The Law of the Iraqi Union of Accountants and Auditors No. 185, 1969 sets initial professional development and continuing professional development (CPD) requirements for professional accountants in Iraq.
The IUAA shares responsibility for implementing initial and continuing professional development requirements with other entities such as the Ministry of Higher Education’s Accounting Sector Committee and the Arab Institute of Certified Public Accountants.
The IUAA indicates that it has mandated 20–40 hours of CPD for auditors, while non-auditors are not required to fulfill CPD requirements. Consequently, its CPD requirements require further alignment with IES.
The IUAA reports that it has plans in place to address areas of missing requirements based on a 2014 review of the national requirements against those of the IES; however, no progress has been reported. The institute does indicate that it planned to conduct workshops in 2016 to promote the incorporation of the revised IES into local accounting education requirements; however, specific dates were not provided.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff. The IUAA is also encouraged to review the requirements of the revised IES and indicate actions it will undertake to address gaps, if any, in its next SMO Action Plan submission. The IUAA should also report on progress, if any, on executing the adoption of missing requirements since 2014.
SMO 3: International Standards on Auditing
Although the IUAA is not responsible for setting standards, it recommends and translates auditing standards as per the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969.
The IUAA indicates that it established the International Association of Certified Public Accountants in 2005 to support the use of international standards on auditing through training and education programs on topics such as new technology and auditing, and producing publications related to ISA. However, the IUAA first mentioned these initiatives in 2007 and has not provided an update on their execution.
Finally, the institute states that it reviews and submits comments to Exposure Drafts issued by the IAASB.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff. The IUAA is encouraged to clearly indicate in its SMO Action Plan which version of ISA is applicable in Iraq.
SMO 4: Code of Ethics for Professional Accountants
The Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969 grants the IUAA with the authority to set ethical requirements for professional accountants in Iraq. To this effect, in 1983 the IUAA adopted a Code of Ethics; however, the extent of its alignment with the IESBA Code of Ethics needs to be established.
The IUAA indicates that it provides training on the Code of Ethics through its continuing professional development program; however, it has not provided more details on these activities since 2005.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff. IUAA is also encouraged to clearly indicate in its SMO Action Plan whether the requirements of the most recent version of the IESBA Code have been incorporated into its Code of Ethics. Additionally, in its SMO Action Plan, the IUAA is encouraged to indicate if it participates in the international standard-setting process by submitting comments to Exposure Drafts.
SMO 5: International Public Sector Accounting Standards
The IUAA reports that it has no responsibility for the adoption of the IPSAS in Iraq since the Ministry of Finance (MoF) is responsible for setting the public sector accounting standards.
In Iraq, public entities that are self-financed apply accrual-basis IPSAS, while governmental entities with central funding use cash-basis IPSAS. Since full accrual-basis IPSAS have not yet been adopted for all entities, the IUAA reports to focus its efforts on raising awareness and promoting the adoption of accrual-basis IPSAS to the MoF and Ministry of Planning.
The IUAA indicates that its Association of Internal Auditors is responsible for raising IUAA members’ awareness of IPSAS and supporting them with implementation by providing training programs for IUAA accountants and auditors working in the public sector.
The IUAA indicates that it promotes the adoption and implementation of IPSAS through monthly joint committee meetings focused on accrual-basis IPSAS. The institute also planned to hold IPSAS workshops in December 2016 for MoF staff in order to continue promoting the importance of adopting accrual-basis IPSAS for governmental entities with central funding.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff and report on the outcomes of the meetings with the decision-makers in government to promote the adoption of accrual-basis IPSAS for all entities as well as subsequent actions that will be taken as a result.
SMO 6: Investigation and Discipline
The IUAA has direct responsibility for the investigation and discipline (I&D) of its members, which are all professional accountants in Iraq, in accordance with Article 28 of the Law of Iraqi Union of Accountants and Auditors No. 185, 1969. The IUAA indicates that it established a Discipline Committee with the authority to monitor compliance with rules, regulations, and standards. Disciplinary decisions and sanctions are enforced by specialized courts, and in the case of serious crimes, by the Justice Council.
The IUAA completed a self-assessment of the I&D system against the revised SMO 6 requirements and reports that the system is in line with SMO 6 requirements. The institute submitted amendments to the Law in order to make the procedures binding. However, the Parliament’s approval of the law is still pending.
As part of awareness-raising activities related to the I&D system, the IUAA reports that it organized a workshop in 2013 to promote the importance of the I&D system and works to make the public aware of its procedures. Nonetheless, it is unclear if more recent activities have been implemented.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff. Given that amendments to the law were submitted, in its SMO Action Plan the IUAA should include actions to demonstrate what will be done to implement the changes once the procedures are legally approved.
SMO 7: International Financial Reporting Standards
According to the Iraqi Company Law No. 21 of 1997, all companies must apply IFRS or IFRS for Small and Medium-sized Enterprises (SMEs).
The IUAA reports that it focuses on supporting its members with the implementation of the international standards. The IUAA furthers implementation of IFRS through supporting education and training on those standards which is primarily achieved through the IUAA’s adoption and operation of the International Financial Reporting Standards Expert training and certification program. The IUAA also reports to provide trainings and workshops on both IFRS and IFRS for SMEs for its members, students, and public sector professionals.
Lastly, IUAA reports to participate in the international standard-setting process through providing responses to Exposure Drafts issued by the IASB.
The IUAA is encouraged to update its SMO Action Plan following the guidance of IFAC staff and include activities that it has planned for 2017 to continue supporting its members’ implementation of the standards.
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.