Under the Capital Markets Law (No. 7 of 2010), the Capital Markets Authority (CMA) is responsible for conducting quality assurance (QA) reviews of public interest entities (PIEs), which are defined as listed and...

Under the Capital Markets Law (No. 7 of 2010), the Capital Markets Authority (CMA) is responsible for conducting quality assurance (QA) reviews of public interest entities (PIEs), which are defined as listed and financial institutions. As of the date of the assessment, CMA’s QA review system is the only operational QA system in the jurisdiction. The KAAA reports that the system is partially in line with SMO 1 requirements, nevertheless, in 2013 KAAA initiated an ongoing process to review, identify, and propose modifications to the QA review system in cases of divergence.

The Decree Law No. 5 of 1981 on the Practice of the Auditing Profession stipulates that a QA review system for non-PIEs be established and operated by the Ministry of Commerce and Industry (MCI). According to KAAA, MCI’s mandatory QA review system for non-PIEs is expected to be completed by 2019 (pending parliament approval). In the meantime, KAAA reportedly uses a QA review questionnaire for its members in accordance with Clarity ISA which covers auditors that are not subject to the CMA QA review system (i.e. auditors of non-PIEs).

KAAA reports to have met with representatives from the MCI to promote alignment with SMO 1 requirements in 2018. It also reports to have initiated discussions with the MCI to share responsibilities for QA reviews of non-PIEs. KAAA plans to cooperate with audit firms to facilitate implementation of QA reviews for auditors of non-PIEs, once operational, by increasing awareness through meetings and guidance material.

As of the date of the assessment, it remains unclear if the envisioned system will be in line with SMO 1 requirements and if KAAA will have a role.

KAAA is encouraged to consider specifying actions it has undertaken to further promote and support the development of a mandatory QA review system in line with SMO 1 requirements for all mandatory audits. It is encouraged to provide an update on its discussions with the MCI regarding its role in conducting QA reviews of non-PIEs. Lastly, KAAA is encouraged to collaborate with the CMA to ensure that all relevant QA systems in the jurisdiction are complaint with the requirements of SMO 1.

Initial and continuing professional development requirements (IPD and CPD, respectively) for accountancy professionals are stipulated in national legislation—the Decree Law No. 5 of 1981 on the Practice of the Auditing...

Initial and continuing professional development requirements (IPD and CPD, respectively) for accountancy professionals are stipulated in national legislation—the Decree Law No. 5 of 1981 on the Practice of the Auditing & the Capital Markets Law (No. 7 of 2010)—and are implemented by KAAA under the supervision of the Ministry of Commerce and Industry (MCI) for accountants and auditors of non-public interest entities (non-PIEs); and the Capital Markets Authority (CMA) for PIEs, respectively.

KAAA reports several ongoing plans to in its SMO Action Plan which include, but are not limited to: (i) identifying the technical and financial resources needed to improve professional accountancy education; (ii) increasing the range and rigor of courses offered; (iii) revising and enhancing examination requirements for Chartered Accountants and Auditors; (iv) increasing the number of learning events (for example, thematic lectures, seminars, round tables, and scientific-practical conferences) to improve skill level; and (v) including various standard-related topics and content in training courses and material.

KAAA reports to monitor new and revised IES and proposes relevant changes to various education providers and regulators. It also reportedly updates its own education requirements and curricula in line with new and revised IES on an ongoing basis.

Although CPD is required by law, a program has yet to be implemented by the KAAA. Nevertheless, in 2012, the institute reports to have drafted a proposal for a CPD program in line with IES 7 which is still pending MCI approval. It is unclear if or when the proposal is expected to be approved.

Lastly, KAAA participates in the international standard-setting process by providing comments on exposure drafts and other pronouncements issued by the IAESB.

KAAA is encouraged to review the national requirements against those of the 2015 revised IES and report if gaps exist. At a minimum, KAAA should bring its professional educational program and CPD requirements fully in line with the revised IES and to work with universities to ensure that the university accounting education curricula is updated on an ongoing basis to incorporate new international pronouncements.

The Decree Law No. 5 of 1981 on the Practice of the Auditing Profession delegates audit standard-setting authority to the Ministry of Commerce and Industry (MCI) which requires adoption of ISA as issued by the IAASB for...

The Decree Law No. 5 of 1981 on the Practice of the Auditing Profession delegates audit standard-setting authority to the Ministry of Commerce and Industry (MCI) which requires adoption of ISA as issued by the IAASB for audits of all types of companies. Auditors use the English version of ISA so that all revisions to standards are adopted on an ongoing basis and become effective when issued by the IAASB in order to avoid a lag due to translations. Other IAASB pronouncements have not been adopted, and there is no available timeline for adoption.

KAAA plays an advisory role with regards to adoption and reports to be encouraging MCI to adopt other pronouncements issued by the IAASB such as International Standards on Review Engagements (ISREs), International Standards on Assurance Engagements (ISAEs), International Standards on Related Services (ISRSs), and International Standards on Quality Control (ISQCs).

KAAA provides implementation support to its members by offering continuing professional development courses on ISA and any updates to the standards. For example, between 2009 and 2017, KAAA held several two-day conferences on common challenges with the implementation of new requirements such as new auditor reporting standards (2017 conference). It also conducts annual training seminars for university professors to assist them in teaching the theoretical and practical application of new and revised ISA.

Lastly, KAAA reports that it prepares and publishes articles in the KAAA Magazine to raise awareness on new and revised standards.

It remains unclear if KAAA participates in the international audit standard-setting process.

KAAA is encouraged to clarify if it participates in the international standard-setting process by providing comments on exposure drafts issued by the IAASB.

Accountancy professionals are subject to ethical requirements, as per the Decree Law No. 5 of 1981 on the Practice of the Auditing Profession, which are set by the Ministry of Industry and Commerce (MCI). As of the date...

Accountancy professionals are subject to ethical requirements, as per the Decree Law No. 5 of 1981 on the Practice of the Auditing Profession, which are set by the Ministry of Industry and Commerce (MCI). As of the date of the assessment, KAAA reports that the MCI Code of Ethics is converged with the English version of the 2011 IESBA Code of Ethics. The institute reports to be working closely with the standard-setter to ensure that the most recent version of the Handbook (2018) is adopted. Auditors of public interest entities (PIEs) are subject to ethical requirements stipulated in the Capital Markets Law (No. 7 of 2010). The law delegates ethics standard-setting to the Capital Markets Authority (CMA) which adopted the IESBA Code of Ethics as issued by the IESBA for auditors of PIEs.

Although KAAA has no responsibility for adoption of ethical standards in Kuwait, it reports to meet with the MCI on a regular basis to promote adoption of new and revised versions of the IESBA Code of Ethics. In 2018, KAAA reported to be in the process of signing a memorandum of understanding with the International Arab Society for Certified Accountants (IASCA) to distribute the Arabic translation of the 2016 IESBA Code of Ethics. It is unclear if the MCI established plans or a timeframe to converge with the 2018 IESBA Code of Ethics which will come into effect in June 2018.

KAAA employs several awareness and training initiatives to support its members in understanding and applying the ethical requirements. This includes continuing professional development courses and annual two-day conferences on topics related to the 2016 IESBA Code of Ethics. It reportedly prepares and publishes articles in the KAAA Magazine to raise awareness on new and revised standards.

It remains unclear if KAAA participates in the international ethical standard-setting process.

KAAA is encouraged to clarify MCI’s timeline for convergence with the 2018 IESBA Code of Ethics. The institute is also encouraged to clarify if it participates in the international standard-setting process by reviewing and responding to exposure drafts issued by the IESBA.

The Ministry of Finance (MoF) is responsible for accounting standard-setting for public sector entities. KAAA reports that financial reporting in Kuwait is based on cash-basis reporting. It remains unclear if there is a...

The Ministry of Finance (MoF) is responsible for accounting standard-setting for public sector entities. KAAA reports that financial reporting in Kuwait is based on cash-basis reporting. It remains unclear if there is a timeline for adoption of accrual-basis IPSAS.

Although KAAA has no direct responsibility for adoption of public sector accounting standards, it reports to have been working to promote adoption by engaging in discussions with the MoF on accrual-basis IPSAS. It provided MoF representatives with the International Arab Society of Certified Accountants (IASCA’s) Arabic translations of the standards in 2015, to foster awareness and better understanding of the standards.

KAAA prepares and publishes articles in the KAAA Magazine to raise awareness on new and revised standards. It also provides its members with guidance material, and IPSASB exposure drafts for feedback.

KAAA is encouraged to report if there is an official timeline or roadmap in place to transition from cash-basis IPSAS to accrual-basis plans. KAAA is also encouraged to consider providing continuing professional development courses on the public sector accounting standards if it has members that work in the public sector.

Auditors of public interest entities (PIEs) are subject to the Capital Markets Authority (CMA) investigation & disciplinary (I&D) system as stipulated in the Capital Markets Law (No. 7 of 2010). Under the Decree Law No...

Auditors of public interest entities (PIEs) are subject to the Capital Markets Authority (CMA) investigation & disciplinary (I&D) system as stipulated in the Capital Markets Law (No. 7 of 2010).

Under the Decree Law No. 5 of 1981 on the Practice of the Auditing Profession, the Ministry of Commerce and Industry (MCI) is responsible for conducting investigations & disciplinary (I&D) proceedings for all other accountancy professionals. The MCI has reportedly established a Disciplinary Committee, comprising representatives from the MCI, the business community, and KAAA. KAAA reports that it has established provisions and processes that support the existing I&D system. The KAAA assists the MCI with the implementation of the system (i) through its representative on the Disciplinary Committee and (ii) by having procedures in place within the association to report its members for misconduct and non-compliance with applicable standards and regulations. No update regarding the I&D system has been provided since 2015 and the extent of fulfillment of the I&D procedures with the requirements of the SMO 6 requires further clarification.

KAAA has no direct responsibility for the I&D system, but according to the 2015 SMO Action Plan, it reportedly encourages the relevant authority to incorporate the revised SMO 6 requirements in the system that is in operation. It reports to have proposed expanding the powers of the MCI to adopt new sanctions in draft legislation, which is still pending Ministerial approval.

The KAAA assists the MCI with the implementation of the system (i) through its representative on the Disciplinary Committee and (ii) by having procedures in place within the association to report its members for misconduct and non-compliance with applicable standards and regulations. The KAAA also raises its members’ and the public’s awareness of how the I&D system functions by disseminating information on the rules and procedures in seminars, training sessions and on its website.

First and foremost, KAAA is encouraged to update its SMO Action plan (SMO 6 was last updated in 2015) to indicate specific and recent planned activities aimed at achieving alignment with SMO 6 requirements. KAAA is also encouraged to review the I&D systems in the jurisdiction and report on any gaps with SMO 6 requirements. Next, the KAAA is encouraged to outline steps it will take to consider, execute, and implement plans to promote alignment with SMO 6 requirements. KAAA should develop a concrete timeline for the execution—for example, a timeline for when the review will be completed—to enable the institute to track its progress against its plans and make strategic adjustments as needed.

Ministerial Resolution No.18 of 1990 (as amended) stipulates the requirements for the preparation of financial statements, including applicable accounting standards. In accordance with the law, the Ministry of Commerce...

Ministerial Resolution No.18 of 1990 (as amended) stipulates the requirements for the preparation of financial statements, including applicable accounting standards. In accordance with the law, the Ministry of Commerce and Industry (MCI) is the accounting standard setter for all companies, and it consults with the KAAA, which is the national professional accountancy body. As of 2019, IFRS as issued by the IASB are mandatory for the preparation of financial statements by all companies that fall under the purview of the Kuwait Commercial Companies Law.

Although KAAA has no responsibility for the adoption of IFRS, it reportedly established an ongoing process for monitoring IASB standard-setting activities and disseminating information on new and revised standards. In addition, KAAA reportedly liaises with university professors on the incorporation of changes to IFRS into university courses.

KAAA supports its members with implementation of the standards through seminars and training via the Training Committee. For example, in 2012, the KAAA reported that its Training Committee introduced an IFRS Update Program for its members, to address IFRS implementation challenges and ways to overcome said challenges.

It remains unclear if KAAA participates in the international accounting standard-setting process; and KAAA has not reported any progress since 2015.

First and foremost, KAAA is encouraged to update its SMO Action plan (SMO 7 was last updated in 2015) to indicate specific and recent planned activities aimed at providing or facilitating further support to the profession with the implementation of the international requirements. KAAA is also encouraged to clarify if it participates in the international standard-setting process by providing comments on exposure drafts issued by the IASB.