Kuwait Accountants and Auditors Association

Under the Capital Markets Law No. 7 of 2010, the Capital Markets Authority (CMA) is responsible for conducting quality assurance (QA) reviews of audits of public interest entities (PIEs), defined as listed companies and financial institutions. As of the date of the assessment, the CMA’s QA review system is the only system that is operational in the jurisdiction and is partially aligned with the requirements of Statement of Membership Obligation (SMO) 1.

Decree Law No. 5 of 1981 on the Practice of the Auditing Profession also provides for the establishment of a QA review system for audits of non-public interest entities to be operated by the Ministry of Commerce and Industry (MCI). However, this system has not yet been implemented, and no confirmed timeline for operationalization has been established.

Within this framework, the Kuwaiti Association of Accountants and Auditors (KAAA) does not have direct responsibility for the establishment or operation of QA review systems but plays a supporting role in promoting alignment with SMO 1 requirements. The Association engages with the Ministry of Commerce and Industry and the Capital Markets Authority to advocate for the development and enhancement of QA systems and to promote incorporation of international best practices.

KAAA supports its members through training and awareness initiatives, including activities to prepare for the transition from quality control to quality management standards. It also maintains ongoing dialogue with relevant authorities to encourage improvements in the design and implementation of QA review systems in the jurisdiction.

Given its role in supporting and promoting alignment, and in light of the ongoing nature of these activities, KAAA is assessed as Review & Improve in fulfilling its obligations under SMO 1.

KAAA is encouraged to continue its engagement with the Ministry of Commerce and Industry and the Capital Markets Authority to support the operationalization of a QA review system for non-public interest entity audits and to promote full alignment of existing systems with SMO 1 requirements.

Current Status: Review & Improve

Initial and continuing professional development (IPD and CPD) requirements for accountancy professionals in Kuwait are established in national legislation, including Decree Law No. 5 of 1981 on the Practice of the Auditing Profession and the Capital Markets Law No. 7 of 2010. These requirements are implemented through a shared framework involving the Kuwaiti Association of Accountants and Auditors (KAAA), the Ministry of Commerce and Industry (MCI), and the Capital Markets Authority (CMA).

KAAA plays a central role in delivering education and training for its members under the supervision of the Ministry of Commerce and Industry. Continuing professional development is mandatory, and compliance is monitored by the Association through its Training and Professional Development Committee.

In 2022, KAAA conducted a review of existing national requirements against the revised 2019 International Education Standards (IES) in collaboration with IFAC staff. The review identified areas where further information and coordination are required to fully assess alignment, particularly with respect to university education and entry requirements (IES 1–4), practical experience (IES 5), and professional competence assessment (IES 6).

KAAA is actively implementing initiatives to strengthen professional accountancy education, including enhancing course offerings, updating examination requirements, expanding training activities, and incorporating international standards into educational content. The Association also monitors new and revised IES and engages with regulators and education providers to promote alignment with international benchmarks. In addition, KAAA has established international collaboration arrangements, including a memorandum of understanding with the Institute of Chartered Accountants of India, to support capacity building and technical training.

Given these ongoing activities and demonstrated efforts to strengthen alignment with the International Education Standards, KAAA is assessed as Execute in fulfilling its obligations under SMO 2.

KAAA is encouraged to continue working with regulators and academic institutions to strengthen alignment with the latest International Education Standards across all components of professional accountancy education and to further formalize implementation mechanisms at the jurisdiction level.

Current Status: Execute

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 the application of International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) for all statutory audits. As of the date of the assessment, ISA in effect are aligned with the 2023–2024 IAASB Handbook.

Within this framework, the Kuwaiti Association of Accountants and Auditors (KAAA) does not have direct responsibility for the adoption of ISA but plays an active role in supporting implementation. The Association provides continuing professional development and technical guidance to its members on the application of ISA and related updates.

KAAA supports implementation through a range of activities, including training programs, technical seminars, and periodic conferences addressing practical challenges in applying new and revised standards. It also contributes to awareness-raising through publications and provides members with access to Arabic translations of the IAASB Handbook.

In addition, KAAA encourages engagement with the international standard-setting process, including participation in IAASB exposure drafts and public consultations.

Given the adoption of ISA in the jurisdiction and the Association’s ongoing and well-established efforts to support implementation and continuous improvement, KAAA is assessed as Sustain in fulfilling its obligations under SMO 3.

Current Status: Sustain

Professional accountants in Kuwait are subject to ethical requirements established under Decree Law No. 5 of 1981 on the Practice of the Auditing Profession, with the Ministry of Commerce and Industry (MCI) responsible for setting the applicable Code of Ethics.

As of the date of the assessment, the ethical framework issued by the Ministry of Commerce and Industry is aligned with the 2018 International Code of Ethics for Professional Accountants (including International Independence Standards). Auditors of public interest entities (PIEs), defined as listed companies and financial institutions, are subject to additional ethical requirements under the Capital Markets Law No. 7 of 2010, with the Capital Markets Authority (CMA) applying the International Code of Ethics within its remit.

The Kuwaiti Association of Accountants and Auditors (KAAA) does not have direct responsibility for the adoption of ethical standards but plays an active role in promoting alignment with the International Code of Ethics. The Association engages regularly with the Ministry of Commerce and Industry and other stakeholders to encourage the adoption of new and revised versions of the Code and supports its members through continuing professional development, training programs, and awareness initiatives. KAAA also contributes to the international standard-setting process by encouraging participation in consultations issued by the International Ethics Standards Board for Accountants.

Given its ongoing efforts to promote adoption and support implementation, KAAA is assessed as Review & Improve in fulfilling its obligations under SMO 4.

KAAA is encouraged to continue its engagement with the Ministry of Commerce and Industry and other relevant authorities to support the adoption of the latest version of the International Code of Ethics for Professional Accountants for all professional accountants in the jurisdiction and to promote consistent application across all segments of the profession.

Current Status: Review & Improve

The Ministry of Finance is responsible for establishing public sector accounting standards in Kuwait, and public sector financial reporting is based on national cash-basis standards.

The Kuwaiti Association of Accountants and Auditors (KAAA) does not have direct responsibility for the adoption of public sector accounting standards but plays a role in promoting awareness and supporting alignment with International Public Sector Accounting Standards (IPSAS). The Association engages with the Ministry of Finance to encourage the adoption of accrual-based IPSAS and facilitates access to technical resources, including Arabic translations of the IPSAS Handbook.

KAAA supports its members, including those working in the public sector, through awareness initiatives, publications, training programs, and continuing professional development activities related to public sector accounting and IPSAS. It also promotes engagement with the International Public Sector Accounting Standards Board by sharing exposure drafts and encouraging stakeholder participation.

Given its ongoing efforts to promote adoption and support awareness, KAAA is assessed as Review & Improve in fulfilling its obligations under SMO 5.

KAAA is encouraged to continue its engagement with the Ministry of Finance to support the development of a roadmap toward accrual-based IPSAS adoption and to further strengthen support for its members through targeted training and implementation-focused guidance.

Current Status: Review & Improve

Auditors of public interest entities (PIEs), defined as listed companies and financial institutions, are subject to the investigative and disciplinary (I&D) system operated by the Capital Markets Authority (CMA) under the Capital Markets Law No. 7 of 2010. For all other accountancy professionals, responsibility for I&D procedures rests with the Ministry of Commerce and Industry (MCI) under Decree Law No. 5 of 1981 on the Practice of the Auditing Profession.

The Ministry of Commerce and Industry has established a disciplinary framework, including a Disciplinary Committee comprising representatives from the Ministry, the business community, and the Kuwaiti Association of Accountants and Auditors (KAAA).

KAAA does not have direct responsibility for the operation of the I&D system but supports its implementation through participation in the Disciplinary Committee and by maintaining procedures to report cases of misconduct and non-compliance. The Association also promotes awareness of the I&D framework among its members and the public through training, seminars, and outreach activities.

KAAA engages with the Ministry of Commerce and Industry to encourage alignment of the jurisdiction’s I&D system with the requirements of Statement of Membership Obligation (SMO) 6. While an initial assessment of the system has been undertaken, the extent to which the existing framework fully incorporates SMO 6 requirements has not been demonstrated.

Given its ongoing efforts to support and promote improvements to the I&D framework, and in light of the absence of direct responsibility for the system, KAAA is assessed as Review & Improve in fulfilling its obligations under SMO 6.

KAAA is encouraged to continue its engagement with the Ministry of Commerce and Industry and the Capital Markets Authority to support alignment of the I&D framework with SMO 6 requirements, including completing a comprehensive self-assessment and promoting the development of a fully operational and transparent system covering all professional accountants.

Current Status: Review & Improve

Ministerial Resolution No. 18 of 1990 (as amended) establishes the requirements for the preparation of financial statements in Kuwait, with the Ministry of Commerce and Industry (MCI) responsible for accounting standard-setting. International Financial Reporting Standards (IFRS Accounting Standards) as issued by the International Accounting Standards Board (IASB) are required for application in the jurisdiction.

The Kuwaiti Association of Accountants and Auditors (KAAA) does not have direct responsibility for the adoption of IFRS Accounting Standards but plays an active role in supporting implementation and promoting alignment with international standards.

KAAA maintains ongoing processes to monitor developments issued by the International Accounting Standards Board and disseminates relevant updates to its members. The Association supports implementation through continuing professional development activities, training programs, and technical seminars focused on the application of IFRS Accounting Standards. It also engages with academic institutions to promote the incorporation of IFRS into university curricula.

In addition, KAAA encourages participation in the international standard-setting process by promoting member engagement with exposure drafts and consultations issued by the International Accounting Standards Board.

Given the adoption of IFRS Accounting Standards in the jurisdiction and the Association’s well-established and ongoing processes to support implementation and continuous improvement, KAAA is assessed as Sustain in fulfilling its obligations under SMO 7.

Current Status: Sustain