Self-regulatory Organization of Auditors Association “Sodruzhestvo”
Associate | Established: 2009 | Associate since 2014
The Self-regulatory Organization of Auditors Association “Sodruzhestvo” (SRO AAS) was established by Order No. 721 of the Ministry of Finance in 2009 and is an accredited SRO. It is comprised of auditors and audit firms, although it also welcomes non-auditing professionals. SRO AAS has been an Associate of IFAC since 2014 and is a member of the International Association for Accounting Education and Research.
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
SRO AAS, as one of the five the Self-Regulatory Organizations (SROs) of auditors in the Russian Federation, is responsible for conducting quality assurance (QA) reviews of its members. In 2014, the association translated the revised SMO 1, reviewed its requirements, and developed QA program based SMO 1. To operationalize its system, SRO AAS updated internal and external quality control documents, organized training for inspectors and members, including on ISQC 1, and developed implementation guidance.
In 2016, SRO AAS reported that, apart from the adoption of ISQC 1 and ISA 200, the QA review system that it administers fully complies with the requirements of SMO 1.
The association also contributes to the QA regulatory policy-making process through its participation in the Committees and Working Group of the Council on Auditing Activities of the Ministry of Finance and by providing comments on draft policies and regulations prepared by the Ministry. Cooperation with other SROs to ensure effectiveness and coordination of QA practices is also envisioned in the Action Plan.
SRO AAS should consider working with other bodies that are involved in QA reviews to promote incorporation of the revised SMO 1 requirements at the jurisdiction level, especially given the forthcoming changes related to SROs, and to make available to its members translated copies of IFAC resources such as SMO 1, the Guide to Quality Control for Small- and Medium-sized Practices, and the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities.
- SMO 2: International Education Standards
SRO AAS shares responsibility for the implementation of the initial professional development and continuing professional development requirements for auditors, which are established by law, with other Self-Regulatory Organizations (SROs) and regulators. Overall, the extent of alignment of educational requirements in the Russian Federation with those of the revised IES is not clear.
In its 2016 Action Plan, SRO AAS outlined a number of initiatives dedicated to monitoring and promoting the IES and incorporating IES requirements into national requirements. In particular, SRO AAS reported that it plans to work with higher education providers to ensure that their programs are in line with IES 1. Additionally, SRO AAS is also intends to update its own training programs to ensure they are in line with IES and conduct selective inspections of the training providers it certifies. Finally, consultations are underway with the Association of Chartered Certified Accountants (ACCA) to conclude an MoU to (1) enhance the prestige of the auditing profession in the Russian Federation by working with the students of Russia’s leading universities; (2) provide trainings and hold joint events; and (3) work to align professional certifications.
SRO AAS is encouraged to indicate in its SMO Action Plan the legal and regulatory framework for the education of professional accountants in the Russian Federation and conduct a review of the national requirements against those of IES. As a first step, it is recommended that SRO AAS work, possibly in cooperation with other stakeholders involved in the education of professional accountants in the Russian Federation, to translate the revised IES and raise awareness about their requirements. Participation in the international standard setting process such as submitting comments to the IAESB Exposure Drafts and other public consultations should also be considered.
- SMO 3: International Standards on Auditing
As a Self-Regulatory Organization (SRO) of auditors, SRO AAS is responsible for contributing to the adoption of the Federal Auditing Standards through its representation on the Audit Council of the Ministry of Finance and has worked to promote the adoption of ISA in the jurisdiction. Representatives of SRO AAS are currently involved in the activities of the ISA Working Group of the Ministry of Finance tasked with the endorsement of ISA.
With mandatory application of ISA finally becoming effective in 2017, SRO AAS detailed several activities in its 2016 Action Plan to support the implementation process. These include establishing an ISA committee responsible for conducting training of members and other activities such as webinars and seminars to prepare members of SRO AAS implementation of ISA; participating in the translation process of ISA; planning trainings on ISA to assist members with application of the standards; disseminating information on the international developments in the area; and regular updating its education, training and continuing professional development programs.
With the application of ISA set to become effective in 2017/2018, SRO AAS is encouraged to work with educational providers to ensure that initial professional development syllabi and courses, as well as education and exam material include up-to-date standard related topics. The association is also encouraged to make available translated copies of IFAC resources such as the Guide to Using International Standards on Auditing in the Audits of Small-and Medium-sized Entities for their SMP members and to establish ongoing processes to incorporate new and revised ISA into its initial and continuous professional development programs. Also, the association should consider collaborating with other stakeholders in order to jointly participate in the international standard-setting process by submitting comments to the IAASB Exposure Drafts and other public consultations.
- SMO 4: Code of Ethics for Professional Accountants
As a Self-Regulatory Organization (SRO) of auditors, SRO AAS is responsible for the adoption of the Professional Code of Ethics and the Rules of Independence issued by the Ministry of Finance for its members. In the past, the association participated in the development process of the Russian Code and it indicated in its 2016 Action Plan that it planned to conduct its review against the requirements of the IESBA Code to identify the extent of alignment by August 2015. However, the results of this review are unknown at the time of the assessment as well as any follow-up actions the SRO AAS may have undertaken in this regard.
The association reported in its 2016 Action Plan that it supports the implementation of Russian Professional Code of Ethics and Rules of Independence through its continuing professional education course offerings and hosts seminars for its members. SRO AAS also indicated that it published ethical requirements on its website, hosted teleconferences and organized consultations to assist members with compliance.
Additionally, it stated in its 2016 SMO Action Plan that it intends to monitor new and revised requirements to the IESBA Code, incorporate them into ethical requirements for its members, raise awareness of pronouncements issued by IESBA, and update educational and continuous professional development programs accordingly.
SRO AAS is encouraged to indicate in its SMO Action Plan the results of the comparison between national ethical requirements and the IESBA Code of Ethics. If gaps exist, actions need to be developed to bring the national Code in line with IESBA Code and to establish ongoing processes to incorporate the new and revised pronouncements of IESBA into national requirements. In this respect, collaboration with other bodies responsible for setting and enforcing ethical standards, for example in the translation of the IESBA Code of Ethics, would be beneficial. In addition, SRO AAS should consider working with other stakeholders to jointly participate in the international standard-setting process through the provision of comments on Exposure Drafts and other pronouncements issued by IESBA.
- SMO 5: International Public Sector Accounting Standards
SRO AAS, with no direct responsibility for setting public sector accounting standards, reports that it supports the adoption and implementation of IPSAS in the Russian Federation in general. The SRO AAS indicated in its 2016 Action Plan that it plans to on an ongoing basis raise awareness of the standards and participate in conferences, trainings, and seminars on IPSAS; monitor changes to the standards and update educational programs, continuous professional development programs, and certification exams material.
SRO AAS is encouraged to provide an update in its SMO Action Plan on the execution of its proposed actions to comply with SMO 5 and to indicate in its SMO Action Plan the progress to date on the issuance of national public sector accounting standards based on IPSAS. The association is encouraged to collaborate with regulatory bodies and other stakeholders to make available up-to-date translations of IPSAS and other pronouncements issued by IPSASB.
- SMO 6: Investigation and Discipline
In line with the requirements of the Federal Law on Auditing Activities No. 307-FZ of 2009, SRO AAS is responsible for the development of an investigative and disciplinary (I&D) system to address violations by its members of applicable laws, auditing standards, and the Russian Professional Code of Ethics and Rules of Independence.
The association reports that it established an I&D system in 2010 and in 2014 conducted its review. The review included revising the regulations, policies, and procedures to address new ethical and legislative requirements; developing administrative and complaints procedures that comply with SMO 6; and restructuring the Disciplinary Committee to ensure that members of the Committee have appropriate legal education and work experience to carry out their duties effectively. It also raised awareness of all updates to the I&D system, incorporated changes in initial and continuous professional development programs course material, and began publication of the results of all disciplinary proceedings. In 2016, SRO AAS reported that it is almost fully complies with the requirements of SMO 6, with further improvements needed in the administrative processes.
The association is encouraged to consider further actions to ensure full compliance with SMO 6 and establishing ongoing processes to make sure that the system is functioning effectively. SRO AAS should also consider sharing the revised SMO 6 requirements with other stakeholders that are involved in the investigation and discipline of the profession in order to promote compliance at the jurisdiction level, and facilitate collaboration on the establishment of a unified system.
- SMO 7: International Financial Reporting Standards
SRO AAS, with no direct responsibility for setting private sector accounting standards, and being an organization uniting mostly auditors, reports that it supports adoption and implementation of IFRS through monitoring changes to IFRS and preparing comments on Exposure Drafts and other pronouncements issued by the IASB; raising awareness of new and revised changes by distributing information on the standards; and collaborating with other stakeholders to facilitate effective implementation through its participation in conferences and working groups. The association also indicated plans to acquire and share knowledge of IFRS, and incorporate standard-related topics into its various initial and continuous professional development programs as well as certification examination programs.
SRO AAS is encouraged to provide an update on the progress made to comply with SMO 7.
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