National Board of Accountants and Auditors
Member | Established: 1972 | Member since 1986
The NBAA was established under the Auditors and Accountants (Registration) Act No. 33 of 1972 and operates under the supervision of the Ministry of Finance and Planning (MoFP). The NBAA is mandated by the Act to regulate the activities and conduct of accountants and auditors, including (i) establishing initial and continuing professional development (IPD and CPD) and ethical requirements; (ii) conducting examinations and granting qualifications of the Board for accounting and auditing; (iii) maintaining registers of accountants and auditors; (iv) operating a quality assurance review system and an investigative and disciplinary system; and (v) setting accounting and auditing standards. Membership of NBAA is mandatory to offer public accountancy services in the jurisdiction while Accounting Technicians may voluntarily join.
In addition to being a Member of IFAC, the NBAA is a founding member of the Pan African Federation of Accountants.
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 Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments authorize the National Board of Accountants and Auditors (NBAA) to establish a quality assurance (QA) review system for all audits. In 2005, the NBAA operationalized its QA review system, which it developed in line with the SMO 1 requirements. NBAA states that it continues to review the system’s operations and update the procedures if necessary.
In 2018, it carried out reviews for 70 firms and in 2019, it had 90 reviews planned. Since 2018, all QA review results can lead to disciplinary actions. The first rounds of QA reviews for firms and practitioners were educational to promote the benefits of inspections. In addition to the four NBAA quality reviewers, the institute also brought on a trainer/consultant through June 2020 to enhance the QA team’s expertise and competence.
NBAA offers two seminars on ISQC 1 and ISA on annual basis to its members. The institute also held a seminar on the ISQM 1 exposure draft. Additionally, the institute provides its individual members and firms with a QA review report that contains a summary of matters identified during the review. Members are then required to respond to all maters raised and outline an action plan to address the deficiencies identified. NBAA also offers voluntary reviews as well to provide members with feedback in advance of formal reviews.
NBAA subscribed its small and medium practitioners (SMPs) and firms to the Private Audit Company System, an electronic audit software. NBAA notes that it conducted a training on the audit software to build SMP capacity when carrying out audits.
NBAA is encouraged to continue preparing members for the changes from quality control standards to quality management standards that are being discussed by the IAASB.
SMO 2: International Education Standards
The Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments empower the NBAA to regulate the activities and conduct of professional accountants including establishing initial and continuing professional development (IPD and CPD) and conducting examinations while NBAA-approved training institutions are responsible for delivering the accountancy education.
The NBAA offers examinations for its foundational (Accounting Technician (AT)) and professional (Certified Public Accountant (CPA(T)) qualifications. To sit for the examinations, candidates need relevant initial education (e.g. a university degree or a Certificate of Secondary Education Examination (CSEE) with at least three credit passes and a pass grade in Mathematics and English Language, respectively). The NBAA reports that it reviewed its syllabus in 2019 to include new developments, such as information and communication technology (ICT), and to align with the latest IES requirements. The syllabus became effective in November 2019. Both AT and CPA(T) syllabi as well as study kits are available on NBAA’s website to support candidates.
In 2018—2019, institute conducted training of trainers (ToT) with universities and other tuition providers to inform them of the competency-based syllabus. It plans to do this again in 2021—2022. Furthermore, the institute maintains a list of tuition providers that are accredited by the NBAA for their accountancy programming to ensure alignment with the IES. These tuition providers must submit an annual renewal form for assessment and monitoring to stay on NBAA’s list. The institute also has a list of moderators and examiners that will support universities with their curricula and exams and provide feedback to NBAA on any issues.
In line with IES 5, candidates for AT and CPA(T) must complete practical experience as well. To offer auditing services, individuals must obtain the CPA–PP designation. The CPA–PP qualification is parallel to the CPA(T) qualification, but individuals must have completed their practical training under the supervision of another CPA–PP member. The NBAA requires candidates to maintain a logbook that is also reviewed and signed by their employer.
CPA (T) and CPA-PP members must fulfill 40 hours of CPD per year whereas AT members must complete 20 hours. The institute offers several CPD opportunities during the calendar year for members. Members must submit annual returns to demonstrate their fulfillment of CPD obligations and members who do not can face sanctions. NBAA states its CPD requirements align with IES 7 and 8. The institute specifically notes it emphasizes awareness of IES 8 amongst stakeholders and its CPA-PPs.
NBAA’s ongoing update of its education requirements to align with the latest IES is very positive and is important for a strong accountancy profession. In 2019, newly revised IES address learning and development for information and communications technologies (ICT) and professional skepticism. As market expectation increases for ICT skills and professional skepticism, these standards were developed to address the competencies, skills, and behaviors for both aspiring and professional accountants in these critical areas. These revised standards become effective January 2021.
The NBAA is encouraged to plan a review of its syllabus to ensure the ICT components continue to align with the IES and that tuition providers are addressing these skills in their programming. The institute could also consider monitoring practical experience providers as well to ensure the same. Relevant actions should be included within its Action Plan. 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.
SMO 3: International Standards on Auditing
In 2004, the NBAA, as the authorized auditing standard-setter in Tanzania, adopted ISA without modifications and since then has implemented a process to adopt all subsequent revisions to ISA without modifications and including effective date. Accordingly, the NBAA focuses its efforts on supporting its members’ implementation of the standards.
The NBAA has introduced two mandatory training sessions per year for auditors in addition to other CPD seminars on audit standards and issues. Additionally, the NBAA affirms that it reviews its syllabus and, subsequently examinations, to ensure that new and existing ISA are incorporated. A new syllabus became effective in November 2019.
The NBAA reports that it regularly includes the standards and IAASB-issued materials into its Accountant Journal and posts Technical Updates on its website. The institute notes a new development in establishing a technical forum to discuss exposure drafts and receive comments from members and relevant stakeholders.
Furthermore, the NBAA indicates it is working to ensure ISA implementation and compliance amongst small- and medium-sized entities (SMEs) by mandating the use of a network software which is ISA compliant.
The 2018 Handbook became effective in December 2019, which includes revised standards ISA 250 and 540. NBAA is encouraged to outline its planned implementation support on the revised standards and when/if the revised standards have been included in its latest syllabus and exams. NBAA is also encouraged to continue monitoring and preparing members for the changes from quality control standards to quality management standards that are being proposed and reviewed by the IAASB.
SMO 4: Code of Ethics for Professional Accountants
The Auditors and Accountants (Registration) Act No. 33 of 1972 permits the NBAA to set ethical requirements for professional accountants. The NBAA reports that it has adopted the IESBA Code of Ethics without modifications and any revisions to the Code are automatically adopted. Accordingly, the NBAA indicates that the 2018 International Code of Ethics is applicable.
The NBAA states that it ensures professional ethics are given due consideration in initial and continuing professional development. Ethical requirements are addressed by training institutions and in final assessments of NBAA’s Foundational level, Accounting Technician level, and Professional level examinations, which were recently updated in November 2019. Ethical requirements are also included in CPD seminars throughout the calendar year. The institute continues to offer training on NOCLAR and in advance of the effective date of the 2018 Code, it offered three seminars to ensure members were aware of the changes.
The NBAA reports that it regularly includes the standards and IESBA-issued materials into its Accountant Journal and posts Technical Updates on its website as part of circulating updates to members, students, tuition providers, and other stakeholders. The institute notes a new development in establishing a technical forum to discuss exposure drafts and receive comments from members and relevant stakeholders.
Considering the restructuring and revisions within the 2018 International Code of Ethics, NBAA could provide further information on planned actions or initiatives related to raising awareness on the 2018 International Code of Ethics and supporting its proper implementation amongst members (e.g. case studies on working through an ethical dilemma; a confidential hotline to ask questions). The institute may also consider sharing the eCode—an electronic version of the Code of Ethics that includes access and links to additional supporting material and guidance—amongst members.
SMO 5: International Public Sector Accounting Standards
The government issued a pronouncement in 2004 adopting accrual-basis IPSAS for both central and local governments and began applying accrual-basis IPSAS in 2012-13 (IFAC, CIPFA 2018). With the successful adoption of accrual-IPSAS completed, the NBAA indicates that it plays an active role to ensure the ongoing adoption and implementation of IPSAS. Its CEO is part of the National Steering Committee created by the government to oversee the implementation process.
The NBAA is committed to providing members in the public sector and government staff with training and capacity building on IPSAS. The institute states that it incorporates IPSAS into training and final examinations and carries out continuing professional development courses, with at least three IPSAS workshops per year. The institute indicates it is considering including a public sector specialization in its examinations. For the time being, the NBAA offers an IPSAS Diploma and an IPSAS Certificate in response to the growing demand for public sector entities to prepare and present high-quality, transparent financial statements. The IPSAS Certificate provides a foundation for professionals to then progress to the IPSAS Diploma, which has been taken up by more senior professionals. Both are six-month courses.
Additionally, the institute states it has established an IPSAS Technical Forum to discuss and review new IPSASB pronouncements and Exposure Drafts and has held Technical Roundtables, comprised of volunteers from the profession, to discuss other technical matters that affect the profession.
SMO 6: Investigation and Discipline
Under the Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments, the National Board of Accountants and Auditors (NBAA) is responsible for establishing an investigative and disciplinary (I&D) system for professional accountants.
The institute has established a Membership, Ethics, and Compliance Ethics Committee to carry out the I&D processes. Between 2017—2019, four cases have been brought to the committee. NBAA indicates that it is working to strengthen the system to meet the SMO 6 requirements. The NBAA expects to have a new Act enacted in 2021 that will allow the institute to enhance its I&D procedures, including separating the investigative and disciplinary processes and strengthening independence by permitting non-accountants on the committee. Additionally, the institute also expects that it will need further capacity building in staff recruitment and training as related to I&D. The NBAA reports that it is seeking a partnership and donor assistance in this regard.
NBAA has provided information on its complaint submission process on its website. The institute states that it is raising awareness of the I&D procedures through other means and will encourage the public to utilize the system.
I&D procedures that meet the SMO 6 benchmark are foundational to maintaining public trust and confidence in the profession. Strengthening NBAA’s procedures to enhance independence will be essential to its public interest mandate. The institute is encouraged to continue strong advocacy efforts to pass its new legislation that will permit it to make necessary changes. In the interim, NBAA is encouraged to explain more of its plans to find a partnership and build capacity in this area. Building capacity in preparation of the legislative changes will help position the institute to more swiftly implement the new changes.
SMO 7: International Financial Reporting Standards
The Companies Act of 2002 requires all companies to prepare financial statements in compliance with the regulations prescribed by the Ministry of Finance and Planning of Tanzania (MoFP) or the NBAA. The NBAA issued Technical Pronouncement No. 3 of October 2009 which adopts all future standards, amendments, and interpretations issued by the IASB and identifies the companies that must apply full IFRS and which companies may use IFRS for SMEs in the preparation of their financial statements.
Accordingly, the NBAA focuses its efforts on supporting its members’ implementation of the standards. To this end, the institute offers seminars every month on IFRS as part of its CPD programming. It also includes CPD that covers IFRS for SMEs as well. Further, it states that new and revised standards and tax laws are incorporated into its professional examinations upon their effective date.
Finally, the NBAA reports that it regularly includes the standards and IASB-issued materials into its Accountant Journal and posts Technical Updates on its website. It also shares exposure drafts issued by the IASB with its members and other relevant stakeholders to submit comments as part of its participation in the international standard-setting process.
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