Ordre des Experts Comptables et Financiers de Madagascar
Member | Established: 1962 | Member since 1999
OECFM is a mandatory membership organization, which was established in 1962 in accordance with Ordinance No. 62-104 of October 1, 1962. It offers the title of “Expert comptable et financier” (Chartered Accountant). OECFM’s mandate and responsibilities, which are outlined in Ordinance No. 92-047 of November 5, 1992 related to the Organization of the Profession of Chartered Accountant (and all subsequent amendments), are: (i) to ensure members’ compliance with ethical standards, rules of professional conduct, and standards; (ii) to organize and monitor professional education and training; (iii) to monitor the performance of its members through a quality assurance review system; (iv) to implement and to manage an investigation and disciplinary system to address members’ breaches of professional conduct; (v) set ethics and audit standards; (vi) maintain a registry of Charted Accountants; and (vii) represent and defend the interest of the profession, nationally and internationally.
In addition, OECFM is an adviser to the accounting standard-setting body, Conseil Supérieur de la Comptabilitié (CSC). In addition to being an IFAC Member, OECFM is also a member of the Fédération Internationale Des Experts-Comptables Francophones (FIDEF) and the Pan African Federation of Accountants (PAFA).
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 accordance with Article 70 of Ordinance No. 92-047 of November 5, 1992 (and subsequent amendments), the OECFM is responsible for the establishment of a quality assurance (QA) review system.
The institute reports that its QA review procedures largely align with SMO 1 requirements, however, there are still some components that remain to be formalized and included within the bylaws prior to implementation. These include: the approach for selecting firms for QA review; linking the QA review results to the investigation and discipline mechanism; and regular reviews to assess the implementation of the system.
Through the European Union-funded Program of Support to Employment and Regional Integration (PROCOM) and training support from the professional accountancy organizations in France, the OECFM began implementing QA reviews in 2018 after beginning pilot reviews in 2014. The institute has trained 13 quality control reviewers but notes that it does face a challenge in recruiting additional volunteers to serve as reviewers. Thirteen firms were subject to a first round of QA reviews in February 2018 and June 2018. OECFM expects to review another 13 more by Q4 2019 and will complete the first cycle of reviews by 2021. OECFM members have also benefited from trainings through PROCOM on ISQC 1 and other relevant standards.
OECFM indicates that it is implementing the following support activities as related to QA reviews: (i) collecting feedback on difficulties encountered by members in the practical application of ISQC1 in their practice; (ii) issuing advice and other notices; and (iii) initiating training seminars. In 2019, the OECFM will be organizing a training on ISQC 1, the proposed ISQM 1, and anti-money laundering with the support of FIDEF. Lastly, the institute states that it also shares standards and other implementation guidance through its website and emails to members.
OECFM delayed the implementation of its QA review system due to the pandemic.. OECFM is developing new quality review manual in line with the QM standards. OECFM should outline the trainings it will provide members as QA reviews continue and any deficiencies are identified. OECFM is encouraged to continue monitoring and preparing members for the changes from quality control standards to quality management standards that being proposed and reviewed by the IAASB.
SMO 2: International Education Standards
Initial professional and continuing professional development (IPD and CPD respectively) requirements are outlined in the Decree No.92-960 of November 11, 1992 for “Expert comptable et financier” (Chartered Accountants). In accordance with the decree, the OECFM determines education and practical experience requirements. The institute states that there are legal constraints in fully aligning national IPD and CPD requirements with the latest IES. A proposal is with the government to align national requirements and it continues to await approval. The institute states its Education Board is working to compare national requirements to the revised IES to identify any changes that might need to be made but face challenges as there is no French translation of the IES.
Despite these obstacles, OECFM reports it has initiated various processes to facilitate convergence with revised IES at the national level. For example, after finding that some education providers were not meeting high-quality benchmarks, the OECFM began an accreditation process for universities and educational institutions such that only individuals with a diploma from accredited institutions will be permitted to sit for the entrance exam to become a student at OECFM. As of October 2018, the OECFM has accredited five higher education institutions.
IPD requirements also stipulate three years’ practical experience in a member accounting or audit firm of OECFM along with a presentation and defense of a thesis. As of June 2016, the training regulations adopted by the Council state the involvement of eight supervisors in charge of monitoring all candidates who are selected based on the results of the entrance exam. Supervisors must affirm candidates’ competencies and quality of their practical experience to OECFM. In September 2018, the institute signed Memorandum of Understandings (MoUs) with Institut National des Sciences Comptables et de l'Administration d'Entreprises (INSCAE) to support candidates in writing their final thesis and the Institut Supérieur de la Communication des Affaires et du Management (ISCAM) to strengthen the institute’s communications.
The OECFM receives support from the French PAOs by having representatives serve on the dissertation panel and preparing the final written exam. The final exam includes topics that a CA would encounter in their professional work—e.g. accounting, audit, tax, and legislation.
Once a member of OECFM, individuals must fulfill 40 hours of CPD per year (120 over a three-year period which meets the input-based approach outlined in IES 7 and 8) and submit return forms to monitor compliance. The institute offers training throughout the year to help members meet this requirement. In 2018, OECFM has collaborated with the Service de Renseignement Financier Madagascar (SAMIFIN) in regards to anti-money laundering and the Tax Authority to hold trainings and conferences to enhance the quality of financial statements. In 2019, trainings will be offered on the 2018 Code of Ethics; ISQC 1 and the proposed ISQM 1; anti-money laundering; and cybersecurity.
Overall, it seems that while some accountancy educational requirements in Madagascar incorporate the revised IES requirements, there might require further changes necessary given that the revised IES emphasize a learning-outcomes and demonstrating competencies approach as opposed to theoretical knowledge. The OECFM has already taken positive steps in accrediting universities to bolster the quality of accountancy education and monitoring practical experience. As part of its planned review of the national requirements against the revised IES requirements the institute may consider engaging with other PAOs that have educational programming already aligned with the revised IES. The institute may consider undertaking a self-assessment using 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
Under Ordinance No. 92-047 of November 5, 1992 (and subsequent amendments), the OECFM is responsible for defining applicable auditing standards. Since 2009, the OECFM has adopted all ISA as issued by the IAASB and has signed an agreement with IFAC to use the French translation of the 2018 ISA Handbook.
Dissemination of standards to members is regularly done through circulars and trainings; for example, in 2018 trainings were held on the new auditor’s report and in 2019, on ISA 300 and ISA 240. Additionally, the OECFM has received the authorization from the French accountancy organization to use the “Pack Petites Entreprises” or "Pack PE"—a set of tools enabling the auditor to facilitate the formalization of audit procedures and to document audit works for small companies in conformity with the ISA.
OECFM is encouraged to comment on the Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) Exposure Draft (due January 31, 2022
SMO 4: Code of Ethics for Professional Accountants
The OECFM is responsible for the adoption of ethical standards in accordance with Ordinance No. 92-047 of November 5, 1992 (and subsequent amendments). OECFM reports that it has adopted the 2018 IESBA Code of Ethics for application in June 2019.
OECFM has been proactive in keeping up-to-date with the latest ethical standards. It circulated the 2018 IESBA Code to members in April 2018. Subsequently, in September 2018, OECFM reports that its Ethics Commission presented the 2018 IESBA Code to the General Assembly for information and adoption. The 2018 IESBA Code was then adopted for application in June 2019. The Ethics Commission and the Council are planning to offer trainings to members on the new ethical Code. Thus far, the institute has shared the resources and videos on the IESBA website. It intends to utilize recent webinars held by the IESBA as part its Annual General Assembly presentation in September 2019 to further raise awareness on the new Code.
The OECFM has stated further plans to create a questionnaire/survey for members to collect feedback on their needs and interests pertaining to the new ethics code. Moreover, the OECFM indicates it will train its accredited tertiary educational institutions on the 2018 Code and will have a seminar to support students’ learning.
OECFM is encouraged to continue providing training on the requirements of the requirement of the 2020 Handbook of the International Code of Ethics for Professional Accountants. The new code incorporates IESBA’s revisions to Part B of the Code (effective June 2021) and revisions to Sections 100, 110, 120, and 220 (effective December 2021) to form plans to support members with implementation.
SMO 5: International Public Sector Accounting Standards
The Conseil Supérieur de la Comptabilité (CSC) within the Ministry of Finance and Budget determines public sector accounting standards in accordance with Decree No 89-161 of June 13, 1989 amended by Decree No. 98-442 of June 18, 1998. Since 2006, government entities are required to apply the “Plan Comptable des Opérations Publiques” (PCOP). The PCOP is cash-basis and based on the 2004 version of IPSAS while also incorporating elements of the National Accounting Plan, Plan Comptable General (PCG) 2005, which is based on the 2004 version of IAS/IFRS.
OECFM, with no direct responsibility for adoption of standards in this area, continues to raise awareness of the benefits of IPSAS adoption. There was previously a project to create a task force to collaborate on IPSAS adoption, but it did not move forward due to changes in the government. The OECFM acknowledged that it is not very involved in this area although the General Secretary of the CSC is an OECFM member and part of OECFM’s Council so that the institute remains engaged with the CSC in that manner.
The institute also recognizes the need for training on IPSAS but is awaiting further action and decisions from the CSC-level before utilizing resources to pursue implementation. In September 2019, the OECFM met with USAID regarding financing projects related to transparency in the public sector—this could include training on IPSAS.
The 2015 version of the IPSAS have been translated into French. The OECFM may consider encouraging the CSC to sign a Permissions agreement with IFAC raise awareness and enhance knowledge of the standards. Given the identified need for training on IPSAS in the jurisdiction, the institute may consider whether it can include a training offering on public financial management matters for government representatives.
SMO 6: Investigation and Discipline
The Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for the establishment and administration of an investigative and disciplinary (I&D) system for its members in accordance with Ordinance No. 92-047 of November 5, 1992 (and subsequent amendments).
The OECFM’s I&D procedures are outlined in the institute’s bylaws dated July 19, 2013. The institute has an Ethics & Discipline committee that will conduct investigations and report findings to the Disciplinary Chamber. The Disciplinary Chamber will issue any sanctions and members have the option of appealing. A representative from the government oversees the Disciplinary Chamber proceedings.
The OECFM has indicated that its I&D procedures would benefit from further improvements to meet the SMO 6 requirements—for example, having non-accountants serve on the Disciplinary Chamber, formalizing the link with quality assurance (QA) reviews, administrative processes, and public interest considerations such as publishing results and the how the public can bring a complaint. OECFM is considering having the government representative be a member of the Disciplinary Chamber as opposed to just overseeing the proceeding to address one gap. The institute states it is revising some articles within its bylaws to address and formalize other issues; a proposal is with the government to finalize these changes which continues to await approval.
Pending government approval of the proposed changes to its I&D mechanism, the OECFM may consider what actions it could currently take to strengthen its procedures, such as informing the public what misconduct may initiate an investigation and ensuring that any deficiencies identified in the QA reviews are addressed as necessary. The institute is encouraged to continue utilizing the SMO 6 best practices as the benchmark in any reviews and advocacy for the update and approval of its procedures.
SMO 7: International Financial Reporting Standards
The Conseil Supérieur de la Comptabilitié (CSC), which is based within the Ministry of Finance and Budget, is responsible for setting corporate accounting standards. Companies are required to prepare financial statements in accordance with the National Accounting Plan, Plan de Comptable General (PCG) 2005, which is based on the 2004 version of IFRS. Banks and other financial institutions are required to apply the Plan Comptable des éstablissements de crédit (PCEC), while insurance companies must use Insurance Accounting Plan (PCAs) which are also based on the 2004 IFRS.
The OECFM notes that it supports the CSC in monitoring compliance with applicable accounting standards and assists the standard-setter in its convergence efforts with IFRS. Additionally, the General Secretary of the CSC is an OECFM member and part of OECFM’s Council so that the institute remains engaged with the CSC in that manner.
Historically, the OECFM has provided training to members on the local standards given that there are penalties for non-compliance. However, in May 2018, the International Monetary Fund (IMF) requested that the financial statements of the Central Bank agencies conform to the most recent version of the IFRS. The OECFM has been tasked with undertaking a study in collaboration with the CSC to determine the feasibility of adopting the most recent IFRS and—due to resource constraints—is seeking support for training on the most recent IFRS to support members that will be preparing financial statements for the Central Bank agencies. The institute will also share available resources that are translated into French on the IFRS.
Considering new stakeholder requests and market demands, the OECFM should consider demonstrating how it is promoting the update of the adopted standards to the CSC and how it can more frequently disseminate resources (via email, website, and training) on the latest version of the IFRS. Any actions related to implementation support—such as trainings and the impact study on IFRS—should be highlighted as examples in its Action Plan.
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