Jordanian Association of Certified Public Accountants
Member | Established: 1988 | Member since 1992
The Audit Profession Law No. 32 of 1985 established the Jordanian Association of Certified Public Accountants (JACPA). It is a mandatory membership organization for Certified Public Accountants.
Under Accountancy Profession Law No. 73 of 2003, JACPA is mainly responsible for (i) administering professional certification examinations and verifying fulfillment of practical experience / continuing professional development requirements; (ii) enforcing and monitoring members’ compliance with ethical requirements, rules, and accountancy standards through an investigative & disciplinary system; and (iii) recommending ethical requirements and accounting and auditing standards to the Higher Council for the Accountancy Profession—the oversight entity in the jurisdiction.
In addition to being a member of IFAC, JACPA is a member of the Arab Federation of Accountants and Auditors (AFAA) and the Gulf Cooperation Council Accounting and Auditing Organization (GCCAAO).
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 Jordanian Association of Certified Public Accountants (JACPA) has designed its QA review system in-line with the requirements of SMO; however, in practice there are still some areas of divergence. At present, the system is operated voluntarily (members can volunteer to participate in the system); however, amendments to the law are necessary to provide JACPA with the authority to undertake a compulsory system for its membership. Presently, draft amendments to the Accountancy Profession Law No. 73 of 2003 have been made to provide this authority to JACPA and these are pending approval by the Jordanian Parliament.
To support its system of voluntary QA, JACPA reports that it established 10 sub-committees under its Quality Assurance Committee to undertake the inspections of members’ working papers on a risk-basis. The sub-committees’ review reports are discussed at JACPA Board Meetings and can lead to sanctions when violations are found. JACPA has conducted a self-assessment of the voluntary inspection process and identified areas that require improvements in order to better align with the SMO 1 requirements, particularly the scope of its system, the review cycle, and disciplinary actions.
JACPA’s efforts have primarily focused on promoting draft changes to Accountancy Profession Law No. 73 of 2003 to make participation in the QA review system a mandatory membership requirement. It has also been focusing efforts on preparing its members for the implementation of the mandatory QA review system once the amendments to the Law pass. For example, between 2012-2013, JACPA worked with the World Bank to develop online tools and resources to assist them with understanding the quality assurance review process. JACPA reports that in 2016 it participated in a train-the-trainers workshop with the Lebanese Association of Certified Public Accountants (LACPA), the American Institute of Certified Public Accountants (AICPA), and the Arab Federation of Accountants and Auditors (AFAA) to enhance audit quality assurance review skills.
In 2020 and 2021, JACPA will build upon its 10 sub-committees to continue to expand the scope of its program and provide voluntary additional QA services to the members who request this service. JACPA will also continue to provide its annual training course on quality audits. Finally, in 2020/21, JACPA will again seek to provide its members with an updated quality control review checklist for reference and to support the development of strong systems of QA within its member firms.
As a first point of focus, JACPA is encouraged to fully align its voluntary QA review system with SMO 1 requirements where legally possible. JACPA is encouraged to continue to operate and build its system of QA and the various sub-committees to continue to expand the reach of the program. Additionally, as JACPA waits for the amendments to the Law to pass in Parliament allowing it to operate a mandatory QA system, it is encouraged to provide an advocacy activities to promote legislative passage and to request IFAC support and assistance in engaging with legislators and regulators as necessary. As IAASB is revising its standards on quality control, JACPA should also consider following the developments and incorporating the revisions and prepare for the implementation of the revised standards.
SMO 2: International Education Standards
The Accountancy Profession Law No. 73 of 2003 defines the requirements for initial professional development (IPD) and continuing professional development (CPD) requirements. In regards to IPD, the country’s universities and the Ministry of Higher Education and Scientific Research share responsibility for developing the degree curricula and program structure, while entrance to the profession, examination, licensure, practice experience and CPD are the shared responsibilities of the Higher Council for the Accountancy Profession (HCAP) and JACPA.
JACPA maintains mandatory membership and is responsible for administering professional certification examinations and verifying both the fulfillment of practical experience and CPD requirements. The HCAP maintains authority for approving and revoking CPA licenses. To apply obtain CPA license, candidates must apply to JACPA and fulfill the following conditions (i) provide proof of Jordanian citizenship; (ii) provide proof of ‘full civil eligibility’ and no criminal background; (iii) pass the CPA examination; and (iv) possess either an accounting degree from a recognized university; or a degree in any of the specialties related to the profession from a recognized university (which can include foreign university degrees as long as the candidate is able to pass an examination with relevant Jordanian legislation). To retain the CPA license, CPAs must remain members of JACPA in good standing, which involves completing a minimum of 20 hours of CPD annually, in accordance with the Law. JACPA monitors CPD fulfillment and conducts periodic audits to ensure compliance by its members.
JACPA reports in its SMO Action Plan that the education requirements are mostly aligned with the revised IES (2015), apart from CPD. JACPA established plans, under the World Bank Institutional Development Fund (IDF) Grant, to update the requirement to 40 hours of CPD annually (to better align with the IES 7 benchmark of 120 hours cumulative over a three-year period). As of the date of the assessment, the law still requires only 20 hours. JACPA is working to update and modify the law. JACPA has noted that the closures related to COVID19 have slowed progress on this and other areas in 2020. However, it will continue to engage with key Parliamentarians and other stakeholder groups which may be positively impacted by these changes, and advocate for adoption of this requirement.
Lastly, JACPA indicates that it continuously monitors IES pronouncements and carries out ongoing promotion and support of initial professional development and CPD requirements in line with the IES. JACPA notes that its IPD and CPD program curricula are reviewed annually (and will be undertaken in 2020/2021) and that improvements and additions to the programs are undertaken on a regular basis to ensure relevance to the market. Furthermore, JACPA discusses with members and draws from the knowledge of its leadership and connections to universities to ensure both IPD and CPD are addressing emerging issues and concepts needed to maintain the skills and competence of its members.
Finally, JACPA will continue its outreach and engagement with university accounting departments to ensure awareness and understanding of the IESs on an annual basis. This will be conducted in 2020 / 2021 virtually through discussions with leading professors who are members of JACPA.
JACPA is encouraged to continue its efforts to raise awareness of the requirements of the IES amongst the various stakeholders in the IPD and CPD ecosystem in Jordan and to continue to advocate for further adoption and implementation of necessary changes to the CPD system. Given the challenges with regards to human and financial resources, if possible, JAPCA is encouraged to complete a comprehensive gap analysis of the overall national requirements and programs for professional accountants in the country against the revised IES in cooperation with other stakeholders involved in the education of accountants in the jurisdiction. The IES Checklist and the Accountancy Education E-Tool developed by IFAC may be used to conduct an assessment and to consider available implementation support materials. If gaps exist, specific actions need to be planned and incorporated in the SMO Action Plan aimed at fully aligning the educational requirements with those of the revised international standards.
SMO 3: International Standards on Auditing
In accordance with Companies Law No. 22 dated 1997 (as amended 2006) and Accountancy Profession Law No. 73 of 2003, JACPA recommends auditing standards for the Higher Council for the Accountancy Profession (HCAP) to adopt. In 1992, HCAP adopted all ISA as issued by the IAASB for current and future audits. As such, although JACPA retains the ability to recommend standards for adoption to the HCAP, in practice revised and new ISA are applicable in Jordan with the effective date as issued by the IAASB.
JACPA focuses its efforts on providing implementation support to its members through trainings, conferences and events. For example, in September 2016 JACPA designed and delivered training on the new audit report for 200 of its members; and in November 2016 it designed and delivered another training on new and revised ISA for 160 of its members. It supports its members by providing them with guidance issued by IFAC, such as the IFAC SMP Committee Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities. In 2020, JACPA is building upon these efforts and provide training and support to its members especially as they are challenged by undertaking the audit function during the time of COVID19. It is focused on supporting SMP practitioners with access to resources and support in fulfilling their audit obligations, adapting to technology, and applying international standards during times of uncertainty.
Over the past few years, JACPA has worked to advance the use of audit software (CNCC-CSOEC Pak-PE) to ensure higher quality audits, however these efforts have stalled somewhat due to the challenges in translation, cost of adaptation and availability of the selected software in Arabic language. Compounding this challenge has been the issue of resource availability due to COVID19.
JACPA is encouraged to continue to promote and advance knowledge and understanding of ISA among its membership and stakeholders. Additionally, JACPA is applauded for its efforts to support SMP and smaller practices as they seek to navigate the issues surrounding COVID19 and provision of high-quality audit services to SMEs. Furthermore, JACPA is requested to reflect on its commitment to collaborating with the AFAA to acquire the Pack PE-Eek audit tool and consider what steps and actions are necessary to translate and adopt the technology and methodology in Jordan. Finally, as Jordan has adopted ISA, JACPA is strongly encouraged to participate in the international standard-setting process by providing comments to the IAASB’s Exposure Drafts and contributing to public consultations. As IAASB is revising its standards on quality control, JACPA should also consider following the developments and incorporating the revisions and prepare for the implementation of the revised standards.
SMO 4: Code of Ethics for Professional Accountants
In accordance with Accountancy Profession Law No. 73 of 2003, JACPA is responsible for recommending ethical standards for the Higher Council for the Accountancy Profession (HCAP) to adopt. In 1992, HCAP adopted the IESBA Code of Ethics for Professional Accountants. All revised and new requirements of the IESBA Code are applicable in Jordan with the effective date issued by the IESBA.
Since all revised and new requirements of the IESBA Code are applicable in Jordan with the effective date issued by the IESBA, JACPA focuses on providing updates and trainings to its members to support implementation. For example, JACPA reports to hold annual training courses on the IESBA Code of ethics and publishes any updates in the official magazine. Cases of non-compliance with the Code are subject to JACPA’s Investigation & Disciplinary (I&D) committee for deliberation.
Since 2012, JACPA has reported that it plans to introduce an ethics exam as part of licensing requirements, but this initiative is pending approval of the amendments to the Accountancy Profession Law No. 73 of 2003. Given the need for adoption of the amendments to this Law in order to progress examination development and implementation, JACPA has not indicated an estimated timeline, nor has it reported plans of developing a voluntary exam.
While JACPA established an ongoing process to monitor activities of IESBA, it does not at this time have the resources to participate in international standard setting by providing comments to the international standard-setters’ Exposure Drafts or contributing to public consultations.
JACPA is encouraged to reach out to IFAC and to identify a strategy for advancing adoption and implementation of the Accountancy Profession Law No. 73 of 2003. As several key actions envisioned for further alignment of JACPA are contingent on the passage of this piece of legislation, additional coordination and support from IFAC may be helpful in moving key reforms forward. In the meantime, JACPA is encouraged to pursue establishing a voluntary ethics exam for its members. Additionally, JACPA should reflect and consider where they may be able to provide specific implementation support for the 2018 Code’s revisions and restructuring.
SMO 5: International Public Sector Accounting Standards
The Ministry of Finance is responsible for the adoption of public sector accounting standards in Jordan which are modified cash-basis and, in 2015, officially endorsed the adoption and implementation of IPSAS. A five-year IPSAS implementation road map is in place, with implementation assistance being provided by the United States Agency for International Development under Jordan’s Fiscal Reform Project. Significant progress has been made in supporting the Government of Jordan’s application of the cash-basis IPSAS. The project envisions a gradual transformation from cash basis to accrual basis of IPSAS accounting with completion of this project slated for 2021.
Over the past few years, the JACPA as well as the International Arab Society of Certified Accountants have been involved in the project to provide the following support: (a) producing seminars/training courses on the subject; (b) giving consultancy and advice in implementing each standard; (c) recommending the adoption of best accounting policies, if any, that will serve the Jordanian economy and governmental budget; and (d) providing any assistance to the project as needed. Prior to the adoption decision by the Ministry of Finance, JACPA was active in raising awareness of IPSAS and promoting their adoption through meetings with the government officials.
In 2020 / 2021, JACPA will be taking the lead from the Government with regards to needs and support in IPSAS implementation. Due to COVID-19 and shifting priorities, JACPA will be engaging with the government to identify areas where the institute can best provide awareness raising as well as education and technical assistance.
JACPA is encouraged to continue to be proactive and responsive to the needs of the Jordanian Government as it progresses with its adoption and implementation of IPSAS. As appropriate, JACPA is encouraged to participate in the international standard-setting process by providing comments to the IPSASB’s Exposure Drafts and contributing to public consultations.
SMO 6: Investigation and Discipline
The Jordanian Association of Certified Public Accountants (JACPA) and the Higher Council for the Accountancy Profession (HCAP) have the authority to operate an investigative and disciplinary (I&D) system for CPAs in accordance with Accountancy Profession Law No. 73 of 2003.
Overall, the JACPA system is largely aligned with the requirements of SMO 6; however, there are a few areas where further enhancement is needed. These include broadening I&D committee composition to include non-accountants and making the results of investigation and disciplinary proceedings available to the public. JACPA states its I&D system operates effectively and has brought forward ten cases of expulsion in the last two years with six cases being appealed and four cases resulting in the eventual expulsion of JACPA members.
JACPA reports that it is in the process of updating the I&D system to ensure that all the SMO 6 requirements have been adopted. This is being done as part of the proposed reform of Accountancy Profession Law No. 73 of 2003.
Effective and efficient I&D procedures that meet the SMO 6 best practices are foundational to maintaining public trust and confidence in the profession. JACPA is encouraged to collaborate with HCAP to raise awareness of the SMO 6 requirements and their importance to the Parliament which may help promote passage of the necessary amendments to the law. The association should also consider actions to ensure the public is made aware of the I&D system, its processes, and how to file complaints. Finally, in the interim, JACPA should consider the areas of non-alignment with SMO 6 and reflect on the ways that these may be overcome through internal modifications of JACPA processes and procedures (i.e., not requiring legal modifications).
SMO 7: International Financial Reporting Standards
In line with the Jordanian Companies Law No. 22 of 1997 (as amended 2006), IFRS have been adopted and are currently effective for all public interest entities. With no direct authority for adoption, JACPA’s focus is primarily on implementation support, particularly because it reports that implementation of IFRS remains a challenge in Jordan. It does this by publishing amendments to the IFRS in its quarterly magazine and conducting annual training every December. JACPA also provides its members with an Arabic language translation of IFRS (2019) available on its website.
JACPA states that it is committed to promoting the adoption of the IFRS for small- and medium-sized entities (SMEs); however, it notes that the main challenge for their adoption is related to the lack of a definition for SMEs in Jordan. Since SMEs are not defined in Jordan, JACPA proposed to use the IFRS definition for entities that must use IFRS. JACPA has developed a project for IFRS for SMEs to be used for non-listed companies, but it is awaiting approval from government. Once confirmed, the Higher Council for the Accountancy Profession would need to approve the definition to have legal backing. With COVID-19 there have been many delays. At this time, JACPA estimates that this initiative will be completed by December 2021.
JACPA is encouraged to work with IFAC, regional organizations and other PAOs to identify examples and models for how to progress the issue of SME definition in a jurisdiction. As this is a challenge faced by many PAOs, peer and benchmark country experience may prove insightful for the purposes of JACPA’s advocacy. Additionally, as appropriate and able, JACPA may consider participating in the international standard-setting process by providing comments on Exposure Drafts and other IASB pronouncements.
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