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The Saudi Organization for Chartered and Professional Accountants (SOCPA)

Member | Established: 1992 | Member since 1993

SOCPA was established in 1992 as a mandatory membership organization for Certified Public Accountants (CPAs) in accordance with the CPA Regulation No. M12 of 1991 to regulate professional accountants. Subject to oversight by the Ministry of Commerce, SOCPA is responsible for: (i) setting accounting and auditing standards; (ii) establishing ethical requirements; (iii) administering professional examinations and delivering continuing professional development programs; (iv) approving CPA offices that can offer training to candidates wishing to fulfill the requirements for certification; and (v) establishing and operating a quality assurance review system. Investigation and discipline of members of the profession is the responsibility of a committee that was established by the Ministry of Commerce and includes a SOCPA representative. In addition to being a Member of the International Federation of Accountants, SOCPA is a member of the Asian-Oceanian Standard-Setters Group and the Gulf Cooperation Council Accounting & Auditing Organization.

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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.

Methodology
Last updated: 03/2023
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    The Certified Public Accountants Regulation No. M12 of 1991 require the establishment of a mandatory quality assurance (QA) review system for all audits in Saudi Arabia.

    SOCPA is responsible for establishing and operating a QA review system, under the supervision of the Ministry of Commerce. SOCPA uses a cycle-based approach where quality control reviews take place every three years for public interest entities (PIEs), and every five years for non-PIEs. PIEs are defined as banks and insurance companies, and all other entities are considered non-PIEs. SOCPA adopted ISQC 1 without any modifications in March 2016, which came into effect in January 2017.

    SOCPA first established its Quality Review Committee (QRC) in 1992 in line with the CPA Regulation, and initiated its first reviews with the assistance of the American Institute of Certified Public Accountants in 2001. SOCPA continues to review its QA review system on an ongoing basis to ensure alignment with SMO 1 requirements. For example, in February 2017, SOCPA’s QRC recruited an external consultant to review SOCPA’s QA review process and recommend improvements. It has since reported that the QA review system continues to be in line with the requirements of SMO 1.

    To support its members, SOCPA: (i) conducts workshops with the Institute of Chartered Accountants of England and Whales and the Institute of Chartered Accountants of Pakistan in order to disseminate information about the system nationwide and improve QA review processes and procedures; (ii) translates ICAP’s Audit Practices Manual into Arabic for use by SMPs in Saudi Arabia; (iii) issues guidelines such as the Periodic Inspection Guide, and a quality control manual; and (iv) disseminates information on quality control standards to its members and stakeholders on an ongoing basis.

    Current Status: Sustain

  • SMO 2: International Education Standards

    The CPA Regulation, along with SOCPA internal regulations, specify initial and continuing professional development (IPD and CPD, respectively) requirements, and outline the areas of responsibility of other entities involved in regulation which includes the Ministry of Higher Education. While the Ministry of Higher Education sets the accountancy degree criteria, SOCPA establishes and provides professional examinations as well as the accountancy education program that is needed.

    SOCPA’s Education Committee monitors new and revised standards and will notify the Ministry of Higher Education of any changes.

    In order to obtain the CPA designation, the law stipulates that individuals are required to be Saudi nationals; have at least a bachelor’s level degree in accounting or equivalent (as determined by the Ministry of Higher Education); fulfill practical experience requirements; and become members of SOCPA. Individuals with bachelor’s level degrees in accounting or equivalent (as determined by the Ministry of Higher Education) may apply for membership as CPA trainees, and are referred to as “Associate Members.” Associate Members can practice bookkeeping. Associate Members are subject to SOCPA’s rules and regulations, including CPD requirements.

    CPAs are required to remain members of SOCPA in good standing as evidenced by being included in the SOCPA License List. They may continue to practice the audit profession as long as they complete their CPD requirement of 20 verifiable CPD units (60 hours) every year and continue to adhere to SOCPA’s rules and regulations.

    In 2022, with input from IFAC, SOCPA launched a model accountancy education curriculum for universities in Saudi Arabia in line with 2019 IES.

    As of the date of this assessment, SOCPA completed a comprehensive review of the existing educational requirements for professional accountants in the jurisdiction against those of the revised 2019 IES and confirms alignment.

    Current Status: Sustain

  • SMO 3: International Standards on Auditing

    The Certified Public Accountants (CPA) Regulation No. M12 of 1991 designates SOCPA as the audit standard-setter in the jurisdiction, under the supervision of the Ministry of Commerce. As of the date of this assessment, the 2020 version of ISA has been endorsed for application in the jurisdiction. SOCPA translated ISQM 1 & 2, ISA 220, ISA 315, ISA 600, and ISRS 4400 into Arabic in line with the IFAC translation policy, available here.

    SOCPA reports that it monitors new and revised standards promulgated by the IAASB with the intention of updating education and examination programming and translating the standards accordingly on an ongoing basis.

    To support implementation, SOCPA notifies its members of all new and revised ISA and other pronouncements issued by the IAASB through its website and magazine, and provides training and implementation guidance to promote proper understanding and use of ISA. SOCPA also developed a certification examination on ISA for its members which has been available since May 2017.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    The Certified Public Accountants (CPA) Regulation No. M12 of 1991 delegates authority to the Saudi Organization for Certified Public Accountants (SOCPA) to set ethical requirements for professional accountants, under the supervision of the Ministry of Commerce.

    As of the date of the assessment, SOCPA reports that it adopted the 2022 Handbook of the International Code of Ethics for Professional Accountants, including international independence standards, which is the latest version of the Code. SOCPA also noted that some parts of the Code have been modified (e.g., Section 600 was modified to state that the only permissible non-assurance services are listed in a permissible services list).

    SOCPA reports that it monitors new and revised standards or pronouncements issued by IESBA. SOCPA assists members in complying with the prescribed ethical standards by ensuring that they have access to rules and regulations on the website, via print media, and published reports.

    Lastly, SOCPA signed a contract with the Institute of Chartered Accountants of England and Whales (ICAEW) to provide free access to its small and medium practices for the ICAEW portal, which provides online information and knowledge on ethical standards.

    SOCPA is encouraged to participate in the international standard-setting process by providing comments on Exposure Drafts and other IESBA pronouncements.

    Current Status: Sustain

  • SMO 5: International Public Sector Accounting Standards

    The Ministry of Finance and the General Auditing Bureau are responsible for defining public sector accounting standards subject to approval by the Council of Ministers.

    SOCPA reports that as of the date of the assessment, IPSAS have been adopted without any amendments.

    SOCPA participates in the government-led implementation committee with the Ministry of Finance and the General Auditing Bureau responsible for enhancing public sector accounting and overseeing implementation. The implementation committee is planning to select a few government agencies eligible for the pilot program of implementing IPSAS; assign a specialized consultancy firm to supervise the pilot program; and develop a strategy for continuous development of the government’s accounting system. SOCPA reports that the implementation committee maintains an ongoing process to review SMO 5 requirements to consider the adoption of new or revised standards.

    SOCPA continues to raise awareness of the importance of IPSAS through its organization and delivery of workshops on IPSAS. SOCPA reports to be planning to provide training to members in Arabic on accrual basis IPSAS.

    If deemed feasible and relevant, it would be beneficial for SOCPA, to participate in the international standard-setting process by providing comments on exposure drafts and other IPSASB pronouncements.

    Current Status: Sustain

  • SMO 6: Investigation and Discipline

    In accordance with the Certified Public Accountants (CPA) Regulation No. M12 of 1991, the Ministry of Commerce is responsible for establishing and operating an investigative and disciplinary (I&D) system for professional accountants.

    It includes a representative from the SOCPA Board, Deputy Minister of Commerce, and a legal advisor.

    SOCPA completed an assessment and reported that the I&D system aligned with SMO 6 requirements once the revised CPA Regulation No. M12 of 1991 was adopted in 2016 (effective 2017). The revised regulation that was adopted in 2016 included the following changes which enabled the system to be in line with SMO 6 requirements: (i) establishing a separate disciplinary entity; (ii) establishing a process for the independent review of complaints on which there was no follow-up established; and (iii) publicizing the results of the investigative and disciplinary proceedings.

    SOCPA is encouraged to promote ongoing reviews of the I&D system against SMO 6 requirements by the Ministry of Commerce to ensure continued effectiveness and alignment.

    Current Status: Sustain

  • SMO 7: International Financial Reporting Standards

    Certified Public Accountants (CPA) Regulation No. M12 of 1991 stipulates that the Saudi Organization for Certified Public Accountants (SOCPA) is the accounting standard-setter under the supervision of the Ministry of Commerce for all companies. Public interest entities (PIEs) in Saudi Arabia are defined as banks and insurance companies, while all other entities are considered non-PIEs. PIEs are required to use SOCPA-endorsed IFRS, in line with the Companies Act No. M/6 of 1965 (as amended in 2016), the SAMA Banking Control Law of 2008, and SAMA’s By-Laws. The ‘endorsed’ standards are IFRS as issued by the IASB in addition to requirements and disclosures added to some standards by SOCPA. The ‘other standards and pronouncements’ are those standards and technical releases that are endorsed by SOCPA for matters not covered by IFRS such as the subject of Zakat (religious tax/obligation).

    SOCPA adopted IFRS for SMEs as of January 2018 for non-PIEs. The only modifications made by SOCPA were to add some disclosures, mainly to reflect Sharia or local law. SMEs are also permitted to use full IFRS as endorsed by SOCPA, with two conditions: (i) SMEs must apply full IFRS in full, not selectively; and (ii) once an SME elects to use full IFRS, it must continue applying those standards.

    To support implementation of the standards, SOCPA regularly provide IFRS training sessions in English and Arabic. SOCPA also publishes guidance specifically related to adoption challenges and participates in sessions to carried out by firms and other organizations. SOCPA 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, SOCPA indicates it provided its members with an Arabic version of the IFRS Handbook and maintains ongoing processes to complete translations in a timely manner.

    Lastly, SOCPA actively participates in the standard-setting process as a nominee on the IFRS Foundation Board of Trustees (since 2013) and the IFRS SME Implementation Group. It also actively participates in the Asian-Oceanian Standard-Setters Group and the International Financial Reporting Interpretations Committee.

    Current Status: Sustain

Disclaimer

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.

Contact

P O Box : 22646
Riyadh 11416
Saudi Arabia
info@socpa.org.sa