Kampuchea Institute of Certified Public Accountants and Auditors

Associate | Established: 2003 | Associate since 2008

The KICPAA was established under the Law on Corporate Accounts, their Audit and Accounting Profession (Accounting Law) in 2003. KICPAA functions through its Governing Council and the main statutory functions of the Council include: (i) establishing the initial professional development and continuing professional development requirements for its students and members; (ii) issuing a Code of Ethics for its members; (iii) ensuring adherence to ethical requirements and applicable standards set by the NAC; (iv) establishing an I&D system for its members; and (v) maintaining a list of registered Certified Public Accountants and a list of statutory auditors.

KICPAA members comprise accountants and auditors who are members of foreign professional accountancy organizations, such as the Association of Chartered Certified Accountants (ACCA), the Chartered Professional Accountants of Canada, the Certified Practising Accountants of Australia, and the Institute of Chartered Accountants in England and Wales. Membership with KICPAA is mandatory for all individuals who wish to perform accountancy services in Cambodia. Finally, in addition to being an Associate of IFAC, KICPAA is also a member of the ASEAN Federation of Accountants. 

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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.

Methodology
Last updated: 04/2018
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SMO Action Plan

Status of Fulfillment by SMO

• SMO 1: Quality Assurance

  In Cambodia, the Audit Oversight Board (AOB), operating under the Ministry of Economy and Finance’s National Accounting Council, is responsible for carrying out audit oversight functions, including quality assurance (QA) reviews.

  In 2017, an Audit Quality and Monitoring Committee (AQMC) was established under with the Ministry of Economy and Finance to conduct QA reviews. The AQMC, which was endorsed by a proclamation (“praka”) of the Ministry of Finance for its independence, is comprised of representatives from the NAC, the National Bank, and the KICPAA, among other various stakeholders. In August 2017, the AQMC conducted a pilot round of in-person visits to five firms with the support of the World Bank and PUM Netherlands—a developing agency from the Netherlands. The institute notes that it offered a Train the Trainer workshop on practical audit matters in May 2017 to members as part of the first-round review process.

  Additionally, KICPAA has developed and implemented a number of tools to assist firms’ with quality control standards such as a firm wide quality control questionnaire; an audit engagement review questionnaire; and a quality control documentation guide. Lastly, the institute states that it works to increase awareness of ISQC 1—the 2010 version is adopted as the Cambodian International Standard on Quality Control—in its continuing professional development programming, and has conducted various workshops and seminars on the standard.

  KICPAA is encouraged to clarify if the AQMC’s QA review system is in line with the SMO 1 requirements. It should consider promoting to other AQMC representatives the need to conduct an assessment of the QA review system against the SMO 1 requirements—available in Appendix II and within the SMO Action Plan—in order to identify and subsequently make plans to address any gaps in alignment. Additionally, within its Action Plan, KICPAA is encouraged to elaborate on its role in supporting the AQMC’s operations. KICPAA could also provide clarifying information on whether the AOB is still legally responsible for QA reviews for the jurisdiction and will assume responsibility for carrying out the QA reviews in the future.

  Current Status: Plan

• SMO 2: International Education Standards

  KICPAA is legally responsible for establishing for establishing initial professional development (IPD) and continuing professional development (CPD) requirements for Cambodian professional accountants.

  KICPAA’s membership consists of members of other foreign professional accountancy organizations—such as the Association of Chartered Certified Accountants (ACCA), the Chartered Professional Accountants of Canada, the Certified Practicing Accountants of Australia, and the Institute of Chartered Accountants in England and Wales, which have established IPD requirements in line with the IES—that pass KICPAA’s examinations.

  KICPAA acknowledges that a lack of local qualifications limits the incorporation of IES requirements into the national IPD requirements and contributes to the low number of locally qualified students. To address these issues, KICPAA has stated plans to undertake two initiatives in this area: one is to develop a national CPA qualification examination program and the other is to collaborate with universities to create and implement a standardized accounting curriculum.

  The institute reported several actions over the 2016 year aimed at developing the CPA qualification program, establishing an Education Committee to guide the program, producing, reviewing, and finalizing a draft of the program for public consultation, and finally, submitting the program for approval by the Ministry of Economy and Finance.

  As of September 2017, KICPAA reports that it has made progress in the execution of this initiatives by (i) drafting the national CPA qualification, which consists of a syllabus for 11 papers and is under review by educational advisors; (ii) establishing an Education Committee to guide the national CPA qualification program; and (iii), holding a public consultation with relevant stakeholders on the draft national CPA qualification program. The institute aims to complete the public consultation by November 2017 with a view to submit the final draft to the Ministry of Economy and Finance by December 2017.

  Regarding CPD programming, the institute indicates it is active in this area and has stipulated CPD requirements for its members that are in line with IES requirements. KICPAA offers a variety of CPD courses on applicable standards and developments as well as other topics such as cyber security, IT, forensic accounting, and soft skills and publicizes these courses on its website.

  In its next Action Plan submission, KICPAA is encouraged to provide an update on the status of its efforts to formalize and implement the national CPA qualification. In addition, KICPAA is encouraged to clarify if the national CPA qualification has been developed in line with the 2015 revised IES given that the revised standards are more principles-based and competency-focused in nature.

  Current Status: Execute

• SMO 3: International Standards on Auditing

  The KICPAA indicates that as a member of the National Accounting Council (NAC)—the auditing standard-setter in Cambodia—it has a participatory role in supporting the standard-setting process. KICPAA states that it supports the work of the NAC, which has adopted ISA as the applicable auditing standards, by monitoring the implementation of auditing standards in the jurisdiction through its quality control guides and questionnaires.

  KICPAA also provides implementation support to its members by offering continuing professional development courses on ISA and any updates to the standards. For example, in May 2016, the institute held a one-day workshop on the implementation of the new auditor reporting standards.

  KICPAA is encouraged to update the SMO 3 section of its Action Plan to indicate its actions and its efforts around supporting the adoption and implementation of auditing standards in the jurisdiction. For example, it is encouraged to provide further information on its collaboration with the NAC to establish auditing standards as well as examples of implementation support it provides to its members, especially considering the 2016 ISA and the new auditor’s report.

  Current Status: Execute

• SMO 4: Code of Ethics for Professional Accountants

  With the passage of the new 2016 Law on Accounting and Auditing, the National Accounting Council (NAC) is responsible for setting ethical requirements for professional accountants in Cambodia; however, it is not clear if the NAC has yet stipulated the relevant ethical requirements. Accordingly, KICPAA continues to be the de facto ethics standard-setter as all professional accountants in Cambodia must join the institute.

  In 2005, the institute established and published the KICPAA Code of Ethics for Professional Accountants and Auditors which was based on the IESBA Code of Ethics at the time. As of October 2017, the KICPAA reports that it has completed and submitted a new Code of Ethics to the NAC which would update the ethical requirements to be aligned with the latest version and be applicable for all professional accountants. KICPAA also indicates that in some instances the proposed Code would be stricter than the IESBA Code of Ethics. KICPAA expects the NAC to approve the new Code by the end of 2017 or early 2018 at which time the institute will then submit the Code for the MEF’s approval.

  There is no further information provided by the institute in its Action Plan related to implementation support activities of current ethical requirements.

  In its next Action Plan submission, KICPAA should provide an update on the status of its new Code and if the NAC has approved it for implementation. KICPAA should also indicate actions related to two important activities: a) continuing professional development, training, and communications related to the new ethical requirements for its members in order to support effective implementation of the Code once approved by the NAC and the MEF and b) establishing ongoing, regular processes to keep the Code up to date with the IESBA Code of Ethics.

  In addition, given the effective date of the 2016–2017 IESBA Code of Ethics Handbook, which includes the new NOCLAR standard, it would be beneficial for the KICPAA to establish plans to coordinate a review of the 2016 IESBA Code with the NAC if it has not already done so.

  Current Status: Plan

• SMO 5: International Public Sector Accounting Standards

  Although KICPAA has no direct responsibility for the adoption of public sector accounting standards, it has been promoting the adoption of IPSAS to the government entities responsible for the adoption of such standards–the National Audit Authority (NAA) and the Ministry of Economy and Finance (MEF).

  In 2012, after receiving assistance from the World Bank, the government agreed to meet the reporting requirements under cash-basis IPSAS and gradually transition over time to accrual-basis standards. Subsequently, in 2014, the KICPAA co-organized a workshop on IPSAS with the Institute of Chartered Accountants in England and Wales for officials of the Ministry of Finance and Economy. The institute reports that it continues to use its best endeavors to promote the benefits of IPSAS and circulate guidance issued by IPSASB.

  KICPAA is encouraged to report if there is an official timeline or roadmap in place to transition from cash-basis IPSAS to accrual-basis plans and to consider if the institute should have a participatory role in the process. KICPAA is also encouraged to consider sharing exposure drafts issued by the IPSASB with the NAA and MEF as the relevant public sector stakeholders.

  Current Status: Execute

• SMO 6: Investigation and Discipline

  The 2016 Law on Accounting and Auditing, enacted in December 2016, specifies applicable penalties for violations of technical and professional standards and authorizes the National Accounting Council (NAC) to take disciplinary measures or administrative punishments against professional accountants who violate accounting and auditing regulations. Additionally, the Audit Oversight Board (AOB) is tasked with conducting any inquiries arising from quality assurance inspections, conduct hearings of cases if inquiries result in violations, and imposing sanctions on audit firms and auditors on behalf of the NAC.

  However, it is not clear if the NAC or the AOB have functioning I&D systems and are carrying out any I&D procedures. Accordingly, KICPAA continues to be the de facto investigative and disciplinary entity as all professional accountants in Cambodia must be a member of the institute.

  As of September 2017, KICPAA has not established an I&D system due to a lack of resources. Since 2012, the institute reports that it has been considering how to develop a system suited for the Cambodian environment but no concrete timeframe for completion has been provided on this initiative. The institute reports that it has been in discussions with the members from the ASEAN Federation of Accountants (AFA) to plan a study tour where KICPAA could learn from the experience of other institutes although further information on the progression with this initiative is needed.

  KICPAA is encouraged to clarify which entity will be responsible for establishing the carrying out the I&D procedures of certified public accountants and auditors in the jurisdiction. If KICPAA maintains responsibility for establishing an I&D system, it is encouraged to strategically reconsider and clearly state its timeline for establishing and implementing an I&D system for its members given its resources. Collaborating and learning from AFA members would be a constructive approach and effective first step. KICPAA is encouraged to clearly set an expected completion date for this activity in its Action Plan and outline other plans it may have to establish an I&D system.

  Current Status: Not Active

• SMO 7: International Financial Reporting Standards

  Although KICPAA has no direct responsibility in adopting national accounting standards, which are IFRS and IFRS for Small- and Medium-sized Entities, it reports that it does contribute to the development of standards by providing technical assistance and support to the National Accounting Council—the accounting standard-setter.

  KICPAA supports its members with the implementation of the standards by offering workshops and continuing professional development courses on the standards and developments in the area.

  Additionally, the institute has stated that it is working with the government to establish a company registrar for companies to file statutory audited financial statements. However, these plans have been ongoing since 2009 with no clear indication of progress.

  KICPAA is encouraged to update the SMO 7 section of its Action Plan following the guidance provided by IFAC staff and include further information regarding how it supports its members with the standards’ implementation. KICPAA is encouraged to further demonstrate its involvement in the national standard-setting process and should clarify if it participates in the international standard-setting process by reviewing and responding to exposure drafts issued by the IASB.

  Current Status: Execute

Disclaimer

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.