The Saudi Organization for Chartered and Professional Accountants
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.
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 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.
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.
Since the Ministry of Higher Education determines requirements for obtaining an accounting degree, SOCPA engages with the Ministry to promote revised 2015 IES, as well as to identify any gaps. 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.
SOCPA reported that it was in the process of executing plans to be fully complaint with revised 2015 IES, which emphasize competency-based learning, by the end of 2017. As of the date of the assessment, further information is needed to confirm if the national accountancy education requirements have incorporated the revised IES.
SOCPA is encouraged to report on the extent to which the national requirements for accountancy education align with the revised 2015 IES requirements (effective as of July 2016) and consider developing a specific plan with a defined timeline to eliminate differences, if any.
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 2019, the 2018 version of ISA has been endorsed for application in the jurisdiction. SOCPA translated the handbook in line with 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.
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 2020 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.
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. It also indicates that implementation of IPSAS is expected to be completed by 2021. The 2018 Arabic version of the IPSASB Handbook is available here.
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.
SOCPA is encouraged to obtain permission to disseminate the translated 2018 version of the Handbook to members, available here. 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.
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.
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
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