National Association of Accountants and Auditors of Uzbekistan
Associate | Established: 1992 | Associate since 2000
The NAAA Uz was founded in 1992 and is one of the oldest professional organizations in the Republic of Uzbekistan, uniting both accountants and auditors. Its mission is to assist with the development of the accountancy profession and the adoption and implementation of international standards. The mandate of NAAA Uz is to provide assistance to its members by carrying out educational and continuing professional development programs, maintaining a QA review program for its member audit firms, investigating and disciplining its members, providing consulting services, and advising the regulator on the accounting and auditing legislation. In addition to being an Associate member of IFAC, the NAAA Uz is an associated member of the Asian-Oceanian Standards Setters Group.
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
In the absence of a legal requirement for a mandatory quality assurance (QA) review system for audit work, NAAA Uz adopted ISQC 1 and established a QA review system for its member audit firms in 2009, based on the relevant rules and regulations of the Institute of Chartered Accountants of Scotland, with the assistance of the Chamber of Auditors of the Republic of Kazakhstan. Reviews of audit firms are conducted once every three years by the NAAA Uz External Quality Assurance Committee under the supervision of the association’s Board. Since 2010, the NAAA Uz has been conducting regular reviews, covering from six to 27 audit firms annually. The NAAA Uz reports that apart from cooperation with a public oversight board, which does not exist in the jurisdiction, its QA review system complies with the requirements of SMO 1 (revised 2012).
As part of establishing its QA review system, NAAA Uz translated ISQC 1 (2009), which is not mandatory for application in the Republic of Uzbekistan, into Russian and distributed among its members. It also developed training courses for QA inspectors, which have been ongoing since 2009.
To support its members with understanding the requirements and implementation of the quality control standards, NAAA Uz reports that it organizes seminars, conferences, and roundtables on the subject and disseminates information on the results of QA reviews on an annual basis.
NAAA Uz reports that in general it promotes SMO 1 requirements to other stakeholders in the jurisdiction through its representation on the Consultative Board on Accounting and Auditing under the Ministry of Finance. The association actively participated in the consultations regarding introduction of QA reviews that resulted in the amendments to the Law on Auditing Activity introduced in 2013. The revised law now requires compulsory rating of audit firms. One of the requirements of compulsory rating is passing a QA review.
NAAA Uz is encouraged to consider working with the Ministry of Finance and other relevant organizations to explicitly require a mandatory QA review system at the jurisdiction level for all audits and to promote its compliance with the revised SMO 1 requirements.
- SMO 2: International Education Standards
NAAA Uz unites both accountants and auditors. The initial professional development and continuing professional development (CPD) requirements for auditors are established by the Ministry of Finance under the Law on Auditing Activity No. 734-XII of 1992, as amended in 2000. The Law on Accounting, as amended in 2016, specifies the educational requirements for chief accountants of enterprises that must undergo mandatory audits. NAAA Uz is responsible for the implementation of the requirements established in law in respect to its members. To this effect, NAAA Uz reports that it verifies compliance of its members with the CPD and practical experience requirements and reports the results to the Ministry of Finance on an annual basis.
With respect to its members other than auditors and chief accountants of certain enterprises, NAAA Uz reports that it has established a mandatory CPD requirement for all its members and since 2011 has been working to develop the educational scheme for certification of other accountants and to promote the establishment of a national professional accountant certification program. The program appears to have been finally established in 2016 in cooperation with other professional organizations of accountants and auditors. However, it is not clear whether it incorporates relevant IES requirements.
The association also reports that it actively participated in the process of introducing amendments to the Law on Accounting to require mandatory certification of chief accountants of listed enterprises. However, the revised Law that was adopted in 2016 does not include these provisions.
As far as the incorporation of the IES requirements in the jurisdiction is concerned, the association indicates that in 2009 it obtained translation of IES into Russian and was seeking funds to translate the standards into Uzbek. However, as of 2016 IES have not been translated into Uzbek and the Russian translation of IES is being referred to.
During 2009–2015, the NAAA Uz worked to bring practical experience requirements for its members in line with IES 5, and has monitored fulfillment of the requirement by its members. The association also reports that it works with universities, which provide initial accounting education, as well as with the Eurasian Council of Certified Accountants and Auditors to incorporate requirements of IES into their educational curricula. It also reports to be working with the Ministry of Finance to bring educational requirements for auditors in line with IES. However, no specific activities have been indicated.
NAAA Uz is encouraged to provide an update in its SMO Action Plan on the execution of its proposed actions to incorporate/support incorporation of the IES requirements as required under SMO 2, including specific examples of recent and planned activities. It is also recommended that NAAA Uz collaborate with other stakeholders involved in the education of professional accountants in the jurisdiction, such as other professional organizations of accountants and auditors as well as the regulators, to develop a roadmap for bringing national educational requirements for professional accountants in line with IES. To this effect, translating/obtaining the translation of the most recent version of IES and a review of the existing requirements against those of the revised IES is strongly recommended. In addition, the association should consider collaborating with other stakeholders to jointly participate in the international standard-setting process by providing comments on exposure drafts and other pronouncements issued by the IAESB and consider disseminating information on the international developments in the area.
- SMO 3: International Standards on Auditing
NAAA Uz, which is not directly responsible for the adoption of auditing standards in the Republic of Uzbekistan, has played an important role in promoting the adoption of ISA in the jurisdiction. In 2009, NAAA Uz established a Task Force for Adoption of ISA and prepared and presented to the Ministry of Finance the ISA Convergence Plan for the periods of 2009–2013. It has subsequently cooperated with the Ministry in the process of creating a roadmap to full adoption ISA in the jurisdiction and amending the related legal base through its representation in the Consultative Board on Accounting and Auditing of the Ministry of Finance.
NAAA Uz leads the process of translating ISA into Uzbek language and regularly obtains and raises awareness of the most recent available Russian translation of ISA. In 2011, it established the Group for Translations Reviews, which is responsible for the ongoing translation process in accordance with IFAC Translations Policy and review of the translation into Uzbek. According to the information provided by the NAAA Uz in its 2017 SMO Action Plan, the latest translation of ISA (2013) was completed in November 2014.
To support its members with the implementation of the applicable auditing standards, NAAA Uz reports that on an ongoing basis it develops training materials for its members and conducts seminars and workshops on ISA, audit methodology, and common challenges identified through its QA reviews.
As part of the activities of its Task Force on Adoption of ISA, NAAA Uz reviews exposure drafts and other public consultation materials issued by the IAASB and provides its comments.
NAAA Uz is encouraged to update its SMO Action Plan to indicate its recent and planned activities aimed at achieving compliance with SMO 3, such as supporting its members with the application of the international standards. It is also recommended that NAAA Uz establish ongoing processes for the translation of ISA into Uzbek to ensure that the latest version of ISA is being applied in the jurisdiction and that it disseminates information on ISA to its members and other stakeholders through its website, publications, and other communication channels.
- SMO 4: Code of Ethics for Professional Accountants
As there is no legal requirement for professional accountants in the Republic of Uzbekistan to abide by a Code of Ethics, in 2010 NAAA Uz proactively adopted the IESBA Code for application by its members. Following the adoption of the Code, the association included the requirements of the IESBA Code into its continuing professional development (CPD) programs and disseminated the Russian translation of the 2010 IESBA Code to its members. Although originally planned for 2013, the IESBA Code has not been translated into Uzbek language. No activities to adopt the most recent version of the Code or specific activities apart from provision of CPD programming to support members with the implementation of the existing requirements have been reported.
NAAA Uz is encouraged to consider adopting the most recent version of the IESBA Code and establish processes to incorporate revisions to the IESBA Code on an ongoing basis. It is also encouraged to indicate specific activities it undertakes to support its members with the implementation of the Code and to monitor international developments and disseminate this information to its members and other stakeholders. Given lack of legislative backing to the ethical requirements established for its members, NAAA Uz is encouraged to collaborate with other stakeholders involved in the regulation of professional accountants in the jurisdiction, such as other professional organizations of accountants and auditors as well as the regulators, to adopt a requirement for all professional accountants to adhere to the IESBA Code of Ethics.
- SMO 5: International Public Sector Accounting Standards
NAAA Uz is not responsible for establishing public sector accounting standards, which are set by the Ministry of Finance. Although IPSAS have not been adopted, a roadmap for their implementation has been developed and is reportedly being carried out. In its 2017 SMO Action Plan, NAAA Uz indicates that it uses its best endeavors to promote the adoption of IPSAS and in 2014 completed a translation of IPSAS funded by the United Nations Development Project. No further activities have been reported.
NAAA Uz is encouraged to provide in its SMO Action Plan information on the legal framework for the public sector accounting, the nature of the existing public sector accounting standards in Uzbekistan. It is recommended that NAAA Uz consider its role in the process of adoption of IPSAS in the jurisdiction and, if deemed feasible and necessary, develop a plan, indicating specific actions, such as facilitating access to an updated translation of the IPSAS, and a timeframe to assist the Ministry of Finance with the implementation of IPSAS.
- SMO 6: Investigation and Discipline
Under its By-Laws, NAAA Uz is empowered to investigate and discipline (I&D) its members and to this effect, in 2010, established the Disciplinary and Appeals Committee, which conducts investigations on a complaints-basis. The NAAA Uz Board has the right to impose disciplinary actions and may expel audit firms should they fail to comply with the National Standards on Auditing and the Code of Ethics. All violations must be reported to the Ministry of Finance.
In 2016, the NAAA Uz conducted a partial self-assessment against the requirements of SMO 6, which revealed that the I&D system operated by the association falls short of the SMO 6 requirements.
NAAA Uz reports that it prepares annual reports summarizing the results of the investigative and disciplinary proceedings and communicates the outcomes of disciplinary proceedings to the Ministry of Finance, other professional accountancy organizations, and its members through a number of communication channels. However, no further information on the implementation of activities or plans to bring the system in line with SMO 6 have been indicated in the SMO Action Plan.
The NAAA Uz is encouraged to provide information in its SMO Action Plan on the legal and regulatory framework underlying the investigation and discipline of all professional accountants in the jurisdiction and to clarify the role of other stakeholders in the process. As a matter of priority, the NAAA Uz is encouraged to analyze the gaps identified as part of the self-assessment and develop plans to adopt the missing requirements. The NAAA Uz should also consider sharing the revised SMO 6 requirements with other stakeholders that are involved in the investigation and discipline of the profession in order to promote compliance at the jurisdiction level, and facilitate collaboration on establishment of a unified system.
- SMO 7: International Financial Reporting Standards
With no direct responsibility for the adoption of IFRS in Uzbekistan, NAAA Uz plays an active role in promoting the adoption of the international standards for application in the Republic of Uzbekistan, which as of 2016 have not been adopted. The association reports that it raises awareness about the importance of IFRS adoption through participation in roundtables, seminars, and other discussions focused on IFRS and also initiates roundtable conferences on IFRS issues. The NAAA Uz also noted that it participated in drafting the amendments to the Law on Accounting, which was finalized and adopted in 2016, and maintains an ongoing dialogue with the Ministry of Finance, which is the entity responsible for setting accounting standards.
Additionally, the association plays a leading role in the translation process and has signed a copyright waiver agreement with IFRS Foundation, according to which NAAA Uz is responsible for translation of IFRS into Uzbek language while the Ministry of Finance and the Central Bank are responsible for the adoption of the translated texts of IFRS into the national legislation. According to the agreement, NAAA Uz is expected to provide the translation of the latest updates to IFRS on an ongoing basis; however, the latest translated version of IFRS appears to be that of 2013.
To support its members with the implementation of accounting standards, NAAA Uz provides training sand incorporated IFRS in its continuing professional development programs. No other activities have been reported.
Finally, the association reports to raise awareness of its members and the public on the developments in the international standard-setting area through its website and other communication means. It also participates in the Asian-Oceanian Standard-Setters Group to be involved in the discussions related to IFRS and to share experiences in adoption of IFRS.
NAAA Uz is encouraged to work with other stakeholders to adopt IFRS and IFRS for SMEs as applicable accounting standards in the jurisdiction and to establish ongoing translation processes to ensure that the changes of IFRS are incorporated into national requirements as they become available. NAAA Uz should also provide more specific information on the activities it undertakes to support its members and other users of international standards with the implementation of IFRS.
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