National Board of Accountants and Auditors
Member | Established: 1972 | Member since 1986
The NBAA is an accounting professional and regulatory body operating under the Ministry of Finance and Economic Affairs, the sole body to certify accountants in Tanzania. The NBAA has made significant contributions to accountancy development in Tanzania over the past decade by providing the necessary training and support to accountancy professionals.
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
Amendments to the Accountants and Auditors (Registration) Act of 1972 authorize the NBAA to carry out quality assurance (QA) reviews for all audits. Accordingly, the NBAA reports that it established a QA review system in line with the SMO 1 requirements (as revised in 2012) and carried out its first group of reviews in 2005. In 2015–2016, the institute’s QA reviews covered 84 audit firms out of an intended 95. It has stated plans to carry out reviews for 90 firms throughout 2016–2017 and 90 firms in 2017–2018. NBAA states that it continues to review the system’s operations and update the procedures if necessary.
Moreover, throughout 2015 and 2016 the NBAA reports that it has undertaken two initiatives to strengthen the capacity of the system and support its members with the review process. In 2015, two additional QA reviewers were recruited and trained to enhance the QA team’s expertise and competence. In 2016, NBAA encouraged small and medium practitioners (SMPs) and firms to subscribe to the Private Audit Company System, an electronic audit software. In August 2016, NBAA notes that it conducted a training on the audit software in order to build SMP capacity when carrying out audits.
NBAA offers two seminars on ISQC 1 and ISA on annual basis to its members. 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 in order to address the deficiencies identified.
SMO 2: International Education Standards
The NBAA is responsible for setting initial and continuing professional development (IPD and CPD) requirements for its members. Accordingly, it indicates that it established and implemented IPD requirements that were in line with the IES as of 2014 as well as CPD requirements which are monitored and enforced. However, only the CPD requirements for its members who are Certified Public Accountants in Public Practice (CPA-PPs) are in line with the IES. The institute specifically notes it emphasizes awareness of IES 8 amongst stakeholders and that its CPA-PPs are required to fulfill the appropriate level of CPD requirement by attending the variety of CPD programming that the NBAA offers.
The NBAA maintains an online list of approved accountancy tuition providers and indicates that it works with these providers to maintain up-to-date accountancy programming by communicating new IES updates. Additionally, it reports that it reviewed and revised training institutions’ accounting and professional syllabi in 2014 and its next major review will take place in 2019 in order to align with the revised IES. A key component of the revision will be to add economics and information and communication technology (ICT) subjects to the professional syllabus.
In 2015, NBAA conducted a training of trainers (ToT) which included university trainers, tuition providers, and examiners in order to make them more conversant in competence-based syllabi. It is working to secure funding in order to carry out a similar ToT in 2017.
NBAA is encouraged to update the SMO 2 section of its Action Plan following the guidance provided by IFAC staff. Importantly, it is encouraged to ensure that all its members are required to fulfill CPD requirements that are in line with the IES. Lastly, the NBAA should establish strategic plans in order to review the revised IES, effective as of July 2015, and indicate these plans in their next Action Plan update.
SMO 3: International Standards on Auditing
In 2004, the NBAA, as the 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 reports that it regularly includes the standards and IAASB-issued exposure drafts into its Accountant Journal and posts them on its website; shares the exposure drafts with its members for comments; and carries out continuing professional development programs and courses on ISA. Additionally, the NBAA affirms that it reviews the syllabi of its training institutions to ensure that new and existing ISA are incorporated. While the institute will next undertake a review of syllabi in 2019, new standards are included in the NBAA’s examinations and CPD programming upon their effective date.
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 the Private Audit Company Software (PCAS) or any network software which is ISA compliant. SMEs were required to do this by December 2014 and the NBAA indicates that as of 2016, 50 firms had subscribed to the PCAS. Consequently, the institute will continue to encourage other firms to do the same.
Finally, the NBAA indicates that it also circulates IAASB exposure drafts amongst its members and relevant stakeholders and consolidates comments from all parties prior to submitting them to the IAASB.
NBAA is encouraged to establish plans to review the new auditor reporting standards and other revised ISA, effective as of December 2016, and include actions in its Action Plan to adopt the standard and demonstrate how it is supporting its members with implementation.
SMO 4: Code of Ethics for Professional Accountants
The NBAA is authorized by the Auditors and Accountants (Registration) Act No. 33 of 1972 to set ethical requirements for its members and as of July 2016, the NBAA indicates it has adopted the 2015 IESBA Code of Ethics without modifications as part of its established and ongoing adoption process. Furthermore, the institute has prepared new bylaws which require its members to comply the IESBA Code of Ethics, making compliance with the Code legally binding. It is expected that the new bylaws will be approved and gazetted in April 2017.
The NBAA states that it ensures relevant stakeholders are informed of new ethical requirements by circulating updates to education providers, students, and members; publishing new requirements and updates in its Accountant Journal; and visiting education and training institutions to conduct seminars in order to raise awareness. The NBAA emphasizes it will be raising awareness about the 2016 IESBA Code in particular in the upcoming months. Additionally, the NBAA ensures ethical requirements are addressed by training institutions and in final assessments of its Foundational level, Accounting Technician level, and Professional level examinations. The institute affirms it will continue to do this throughout 2016/17 and 2017/18.
Moreover, the institute reports that throughout 2017 there will be more than 16 continuing professional development programs that cover ethics-related topics. For example, one of its CPD sessions already held in January 2017 specifically covered the new Non-Compliance with Laws and Regulations (NOCLAR) standard.
Lastly, the institute affirms that it submits consolidated comments from members and other relevant stakeholders to exposure drafts issued by the IESBA.
SMO 5: International Public Sector Accounting Standards
The Tanzanian government is responsible for adopting public sector accounting standards and issued a pronouncement in 2012 adopting accrual-basis IPSAS for both central and local governments beginning in 2013. With the successful adoption of 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.
Additionally, the institute has established Technical Roundtables, comprised of volunteers from relevant professions, to discuss and review new IPSASB pronouncements and Exposure Drafts in addition to other technical matters that affect the profession. There was one Roundtable event held in June 2016.
Furthermore, the NBAA also states that it is using its best endeavors to ensure that its members who work in the public sector are properly trained and have access to trainings and capacity building programs related to IPSAS. The institute states that it incorporates IPSAS into training and final examinations, and carries out continuing professional development courses on the public sector, with at least one IPSAS workshop lasting four days. In 2016, the institute reports it carried out three workshops on IPSAS.
Moreover, in February 2016, the NBAA launched its IPSAS Diploma course in response to the growing demand for public sector entities to prepare and present high-quality, transparent financial statements. The six-month course is designed to provide an in-depth understanding of the practical application of IPSAS. The institute issued its first diplomas from the course in August 2016 and indicates that the course will be an ongoing activity moving forward.
Finally, the NBAA indicates that it circulates exposure drafts from the IPSASB to members and key stakeholders to gather input and submit comments.
SMO 6: Investigation and Discipline
Under the Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments, the NBAA is responsible for establishing an investigative and disciplinary (I&D) system for its members and has established a Disciplinary and Ethics Committee to carry out the I&D processes.
As of February 2017, the current I&D system falls short of fulfilling all the SMO 6 requirements as there are no separate investigative and disciplinary process. However, the institute reports that it is working to strengthen the I&D system to meet the SMO 6 requirements and is in the process of revising its bylaws to achieve this objective. The NBAA expects to have new bylaws approved and gazetted by the end of April 2017 which will allow the institute to enhance its I&D procedures. Nonetheless, the institute also notes that implementing the necessary actions to strengthen its I&D system will require capacity building initiatives in the areas of staff recruitment and training. Accordingly, the NBAA reports that it is seeking a partnership and donor assistance to support the implementation of the I&D system with an intended completion date of June 2017.
In addition, the institute states that it is raising awareness of the I&D procedures through its website, publications, and continuing professional development programs, and will encourage the public to utilize the system.
After the NBAA’s review of the its I&D system, the institute has identified a gap in its disciplinary process. In its next Action Plan submission, the institute is encouraged to provide an update on the actions it has taken to address this gap, specifically how the approval and implementation of its of new bylaws has helped strengthen the I&D system. Additionally, the NBAA is encouraged to update the SMO 6 section of its Action Plan following the guidance provided by IFAC staff.
SMO 7: International Financial Reporting Standards
As the corporate accounting standard-setter in Tanzania under the Companies Law of 2002 and the Auditors and Accountants (Registration) Act No. 33 of 1972, the NBAA has adopted IFRS and IFRS for SMEs without modifications and including effective dates since 2004 and 2010, respectively. Accordingly, the NBAA focuses its efforts on supporting its members’ implementation of the standards.
The institute states that it includes new IASB pronouncements and IFRS into its professional training programming and final assessments for candidates pursuing NBAA membership. The NBAA states that new standards and tax laws are incorporated into the examinations upon their effective date. Additionally, each year it conducts trainings and seminars as part of its continuing professional development programming that cover both IFRS and IFRS for SMEs.
Finally, the NBAA 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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