Member | Established: 1995 | Associate since 2013
The PACPA was established in 1995 under a license (No. 5026) from the Ministry of Interior and membership is mandatory for practicing Certified Public Accountants that are licensed auditors and for audit firms. Other segments of the profession may choose to voluntarily join PACPA and be subject to its rules and regulations. In accordance with Article 25 of the Auditing Profession Law No. 9 of 2004, PACPA has the authority to: (i) maintain an audit license registry; (ii) investigate and discipline members for non-compliance with applicable rules, regulations, the code of ethics, practicing without a license, and breaches of professional conduct subject to the final approval by the BPA if the sanction is suspension or expulsion; and (ii) establish and operate a quality assurance review system. In addition to being a Member of IFAC, PACPA is a Member of the Arab Federation of Accountants and Auditors and the Mediterranean Federation of Certified 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
PACPA, which has the legal responsibility for establishing and implementing a quality assurance (QA) review system in Palestine, reports to have operationalized a mandatory QA system and developed the working procedures for this system through its QA Committee. In 2015, the association aligned the QA review system with SMO 1 requirements and continues to review the system on an annual basis to ensure continued alignment.
PACPA reports it has also developed guidelines to help members understand the review process and comply with quality control standards since it has adopted ISQC 1 for its members’ application. PACPA reports that it hired qualified reviewers and conducted training sessions in preparation for visits commencing in December 2020. In 2022, PACPA conducted reviews for 24 individual practitioners and 4 audit firms on a risk-based approach and completed stage 2 of implementation (beginning of 2023) resulting in alignment with ISQM 1 and ISQM 2. At the March 2023 PACPA Board meeting, it was agreed to hire a full-time staff person to manage the audit QA review program which includes overseeing implementation of ongoing training and workshops on ISQM 1 & 2.
With the support of a World Bank grant and technical expertise from another international professional accountancy organization, PACPA prepared and translated a QA manual in 2014, provided training for members, and organized and delivered an awareness program. In November 2019, PACPA printed and distributed the QA manual to all members and continues to offer ongoing training. As of the date of this assessment, the QA manual was last revised in Q1 2023 to include ISQM 1 & 2.
SMO 2: International Education Standards
Initial professional development (IPD) requirements are outlined in the Accounting Profession Law No. 9 of 2004 for requirements for Certified Public Accountants (CPAs (auditors)). PACPA, on the other hand, is responsible for setting the continuing professional development (CPD) requirements for its membership, which may include other accountancy segments like bookkeepers.
In 2022, PACPA participated in the Middle East North Africa (MENA) IES Project led by IFAC/IPAE during which it completed a gap analysis questionnaire of national education requirements against revised 2019 IES; completed an interview with IFAC / IPAE to further clarify alignment and support needed; and presented at the MENA IES Webinar: Connecting the Accountancy Education Ecosystem which took place on June 21, 2022.
PACPA indicates that it raises awareness and promotes the need to incorporate IES requirements into the IPD programming offered through universities and the Board of Professional Auditing (BPA), the body responsible for licensing auditors in Palestine. For example, in December 2019, PACPA provided BPA with material on SMO 2 requirements to raise awareness during the PACPA General Assembly. As a result of similar engagement efforts with universities, PACPA reports that one of the leading universities has included IFRS and ISA in its curricula and the BPA adopted the requirements of IES 8 as part of license renewals. Between 2014-2019, PACPA entered into partnership agreements with universities to offer IFRS and ISA courses, and in December 2019 held a workshop for staff and students at Arab American University, Birzeit University, Al Najah National University and Abu Dies University on IFRS and ISA.
PACPA members are required to attend a minimum of 90 cumulative training hours (CPD) every three years. PACPA reports that its Continuing Education Committee monitors CPD fulfillment and does not renew licenses for those who are in non-compliance with the requirements. PACPA states that its Continuing Education Committee meets regularly to update its working procedures and strengthen its CPD program.
To update its working procedures and strengthen its CPD program, the Committee exchanges and shares relevant information with the Saudi Organization for Chartered and Professional Accountants (SOCPA)—the IFAC member organization in Saudi Arabia—and has developed a feedback mechanism to evaluate the effectiveness of its courses. Additionally, in 2013, it conducted needs assessments to better tailor its CPD course offerings. The results of the needs assessments formed the basis of training offered to bridge gaps. PACPA also accredits training providers to enhance the quality of CPD training and workshops delivered to its members.
SMO 3: International Standards on Auditing
ISA as issued by IAASB are automatically adopted and required for application in the jurisdiction via legislation and therefore PACPA focuses on supporting members with implementation.
PACPA coordinates with the International Arab Society of Certified Accountants (IASCA) to make translated versions of ISA available to its members. It has disseminated the Arabic translations of the 2018 Handbook along with ISA 315, ISQM 1, ISQM 2, and ISA 220 to its members via its website and provides ongoing training on standard-related topics in its continuing professional development programs. In addition, specialized training is also provided for members in applying ISA in the audits of small- and medium-sized entities.
PACPA also details that it regularly hosts or participates in conferences aimed at raising the awareness and the skill level of auditors on the use of ISA. In addition, the association states that it engages with Palestinian universities to encourage the inclusion of ISA within university accounting curricula. Lastly, PACPA also participates in the international standard-setting process by providing comments in collaboration with the Board of Professional Auditing (the entity that licenses auditors) on exposure drafts issued by the IAASB.
SMO 4: Code of Ethics for Professional Accountants
The Companies Law No. 12 of 1964 outlines ethical requirements in Palestine. The Board of Professional Auditing’s (BPA) approved amendments on January 27, 2019, which require adoption of the International Code of Ethics as issued by IESBA.
The Palestinian Association of Certified Public Accountants (PACPA) amended its own bylaws to require members’ adherence with the International Code of Ethics as issued by IESBA. The association’s membership is mandatory for all auditors in the jurisdiction and includes other segments of the profession, such as bookkeepers, that voluntarily decide to join.
PACPA reports that it focuses on supporting compliance with the Code through educational activities. The association raises awareness of the requirements of the Code—including new and revised requirements, which are adopted at its annual meetings via the Ethics Committee—through training courses and workshops. The PACPA Ethics Committee includes representatives from the BPA as well as a legal advisor.
PACPA has instituted mandatory annual ethics trainings in its continuing professional development programs and includes ethics-related topics in professional examinations.
In addition, it has prioritized strengthening the linkage between compliance with the Code and PACPA’s investigative and disciplinary system. In this regard, its Code of Professional Conduct Committee collaborates with the Board of Directors to resolve cases related to violations of the Code.
In addition to disseminating the latest English version of the IESBA Code to its members, PACPA also distributes the latest version of the Arabic translation of the Handbook available (2018 Handbook as of 2022).
PACPA also participates in the international standard-setting process by providing comments in collaboration with the Board of Professional Auditing on exposure drafts issued by the IESBA.
SMO 5: International Public Sector Accounting Standards
The Palestinian Ministry of Finance is responsible for issuing public sector accounting policies, which are implemented by the Palestinian National Authority. According to the IFAC/CIPFA International Public Sector Financial Accountability Index 2020, government entities are transitioning from cash-basis IPSAS to accrual-basis IPSAS. By 2030, national standards will be on a partial accrual basis (IPSAS modified for local context)
With no legal responsibility for the adoption of public sector accounting standards in the jurisdiction, PACPA indicates that it works to raise awareness amongst the entities responsible for the adoption and implementation of the public sector accounting standards on the benefits of IPSAS adoption as part of fulfilling SMO 5 obligations. In January 2020, PACPA sent a formal letter to the President of Palestine explaining the importance and the positive effects resulting from the adoption of IPSAS. It is also planning to send the President a copy of the translated IPSAS. PACPA reports having received a positive response from the State Audit & Administrative Control Bureau regarding the formal letter that was sent.
To this end, the association has established an internal committee to promote the adoption of IPSAS, and states that it collaborates with regional and international institutions to gather information and cases on IPSAS adoption and implementation experiences to share with the State of Palestine. PACPA states that it organizes workshops and publishes articles and bulletins on IPSAS-related topics. Furthermore, PACPA actively participated in the Middle East North Africa: Moving from Cash-basis to Accruals-basis Accounting webinar which was held on June 22, 2022, and co-hosted by IFAC, the World Bank MENA Group, and the Arab Federation of Accountants and Auditors (AFAA).
Lastly, PACPA participates in the international standard-setting process by providing comments in collaboration with the Board of Professional Auditing on exposure drafts issued by the IPSASB.
SMO 6: Investigation and Discipline
In Palestine, PACPA and the Board of Professional Auditing (BPA) share responsibility for the investigation and discipline (I&D) of auditors. Accordingly, PACPA has established and operates a complaint based I&D system that incorporates all the requirements of SMO 6. It has the authority to levy sanctions on all regulated accountancy professionals for non-compliance with applicable rules, regulations, the code of ethics, and standards of professional conduct. PACPA is not allowed to expel or suspend members but may make recommendations to do so to the BPA, which licenses members of the profession, and ultimately determines the applicability of these sanctions.
The association reports that it has an ongoing process in place to periodically benchmark its I&D system against the requirements of SMO 6; and a comparison was completed in 2022. It reports in its 2022 SMO Action Plan that 20 cases were investigated over the past three years, and 9 of which resulted in disciplinary actions.
The association reports having established a link between the QA and investigation & disciplinary systems since the QA review system became operational in 2020.
PACPA also collaborates with other authorities such as the Palestinian Capital Market Authority, Palestinian Stock Exchange, and the Palestinian Monetary Authority, that have operational I&D systems to support continued alignment with SMO 6 requirements at the jurisdiction level.
Finally, PACPA notes that it raises the awareness of the public and its members about the features of the I&D system through its website, where the public is readily able to find the section to submit a complaint, and other publications such as its magazine.
SMO 7: International Financial Reporting Standards
Corporate accounting standards are adopted by law in Palestine and, therefore, PACPA has no responsibility for the adoption of these standards. Amendments to Companies Law No. 12 of 1964 were approved on January 27, 2019, requiring the adoption of IFRS and IFRS for SMEs.
Since IFRS and IFRS for SMEs are adopted in the jurisdiction, PACPA focuses on supporting its members with implementation. PACPA reports that it promotes the inclusion of standard-related topics in the initial professional development curriculum of universities and organizes workshops and other trainings on the standards in its annual continuing professional development program.
PACPA also reports to publish guidance specifically related to adoption challenges and participates in sessions carried out by firms and other organizations. PACPA states that it notifies its members of all new and revised IFRS, and other pronouncements issued by the IASB via its website and magazine. To further support its members, PACPA indicates it provided its members with an Arabic version of the 2019 IFRS Handbook and maintains ongoing processes to provide updated translations in a timely manner.
Lastly, PACPA participates in the international standard-setting process by providing comments in collaboration with the Board of Professional Auditing on exposure drafts issued by the IFRS Foundation.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.
Al Bireh P.O.Box 2397
Al- Silwadi Bld 1st floor
Ramallah, West Bank
Palestinian Territory, Occupied