Yemeni Association of Certified Public Accountants
Associate | Established: 1993 | Associate since 2021
YACPA is legally recognized as a mandatory membership professional association for Certified Public Accountants (CPAs) under Audit and Review of Accounts Law No. 26 of 1999, with the authority to (i) participate in drafting resolutions related to the profession; (ii) ensure members’ compliance with ethical, accounting, and auditing standards and cooperating with MIT to support investigation & disciplinary (I&D) processes; (iii) organize and monitor professional education and training; (iv) deliver continuing professional development (CPD); (v) administer Certified Public Accountant (CPA) examinations; (vi) maintain the CPA registry; and (vii) operate the QA review system under the Ministry of Industry and Trade’s (MIT) supervision.
YACPA’s membership comprises (i) accountants that are working in business, industry, and the public sector; (ii) auditors that hold audit licenses from the Ministry of Industry and Trade; and (iii) partners in audit firms. YACPA plans to include students in its membership base within the next one to three years as Associate-level members.
In addition to being an Associate member of IFAC, YACPA is a member of the Arab Federation of Accountants and Auditors (AFAA), and the Gulf Cooperation Council Accounting and Auditing Organization (GCCAAO).
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.
Last updated: 01/2022
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Status of Fulfillment by SMO
SMO 1: Quality Assurance
Prior to 2020, in the absence of a QA review system, while YACPA had no direct responsibility for the establishment of a QA review system, it actively promoted the need for such a system to the regulators. YACPA proactively engaged with the Ministry of Industry and Trade (MIT) and other entities such as the Chamber of Commerce to promote the passage of the resolution that would enable the adoption of a QA review system in line with SMO 1 requirements. YACPA also supported the Minister’s Council in drafting the legislation.
When YACPA was granted authority by MIT to establish and operationalize the audit QA review system in 2020, YACPA finalized the framework for the review system that is in line with SMO 1 requirements, and immediately offered its members continuing professional development training that included topics related to QA to prepare them for the implementation of the mandatory audit QA reviews. Due to the COVID-19 global pandemic, training sessions were conducted through Zoom.
In April 2021, YACPA delivered a webinar to its members pertaining to QA review system processes as a preliminary step towards preparing them for QA reviews the following year. YACPA established the mechanisms while referencing the SMO 1 checklist provided by IFAC staff in 2019.
YACPA adopted International Standard on Quality Control 1 (ISQC 1) and provides training to its members on quality control via the training institute. YACPA also provides its members with English and Arabic translation of guidance material. It also reports to raise awareness of quality control standards and supports the profession in establishing the related system in line with ISQC 1 and ISA 220, including through its educational programming. YACPA reported that it plans to conduct at least one webinar introducing the Quality Management standards to members in 2021.
YACPA’s contribution to the development of a mandatory QA review system in the jurisdiction and its willingness to conduct the reviews are commendable. Considering that implementation of the QA review system is in the development stage, implementation of the first round of QA reviews and building YACPA’s technical capacity are important next steps. Best practice for this area should guide YACPA and the institute can consider how to offer additional trainings and continuing professional development on the most common deficiencies found and ensure appropriate links with its investigation and disciplinary system. Lastly, the new suite of Quality Management standards that will become effective in 2021– 2022 will require significant change management for regulators and firms. YACPA is encouraged to prepare members and raise awareness of stakeholders in the jurisdiction of the changes from quality control standards to quality management standards and update its training programming to ensure that its members are sufficiently prepared to apply the standards once they become effective
SMO 2: International Education Standards
The Council of Ministers Resolution No. 51 of 2019 and Audit and Review of Accounts Law No. 26 of 1999 (as amended 2004) outline some general entry and educational requirements for Certified Public Accountants (CPAs) and auditors and the Yemeni Association of Certified Public Accountants (YACPA) is empowered by the Ministry of Industry and Trade (MIT) under Law No. 31 of 1992 to set more specific initial and continuing professional development requirements for professional accountants.
YACPA conducted a self-assessment of education requirements at the jurisdiction level against the IES and reported gaps in alignment at the jurisdiction level in February 2014. YACPA reports to be in the process of conducting a follow-up gap analysis, particularly in reviewing university curricula, to determine the extent of alignment with the revised IES of 2019.
Between 2013-2021, YACPA engaged (see example 1 and example 2) with the Ministry of Higher Education to promote updating all Yemeni university curricula and education material to be in line with the IES. It also provided the universities with the most up-to-date publications and guidance (in Arabic) of the international accounting and auditing standards and best practices to include in their curricula. YACPA reports that the universities that it engages with are those that have been able to align national standards with the IES 1-6 requirements. Then in September 2020, YACPA received approval from Public Accounts Permitting Committee (PAPC) to require a minimum of 40 continuing professional development (CPD) hours annually in order to review licenses. YACPA issued a circular to members informing them that non-compliance with the CPD requirement will result in disciplinary sanctions, effective 2022 onwards. To support its members with implementation of this requirement, YACPA provided them with an explanatory guide on how to calculate CPD hours. Furthermore, YACPA reportedly ensures that members have access to at least 30 webinars annually to complete CPD hours.
YACPA reports that it continues to progress gradually in its fulfillment of SMO 2, reviewing the changes, identifying any gaps, and establishing plans to fully align with the 2021 revisions to IES 2, 3, 4, and 8 by the end of 2021.
YACPA is encouraged to conduct, and report on the results of the comprehensive review of the existing educational requirements for professional accountants in Yemen as well as its own educational programming against those of IES 2,3,4, and 8. For areas of less than full compliance, specific actions to close the gaps, if any, with a defined timeframe need to be developed and included in the SMO Action Plan. 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
Before ISA were adopted by law in Yemen, YACPA focused its efforts on promoting adoption through its meetings with key officials in Government. Dr. Hajar Abdulmalek, YACPA Chairman, published an academic piece titled ‘Adopting and Implementing the International Accounting and Auditing Standards in the Republic of Yemen’ for use in discussions with key officials in Government such as the Ministry of Industry and Trade (MIT) and Chamber of Commerce to support adoption of ISA by law. YACPA also supported the Minister’s Council in drafting the legislation. Prior to the enactment of Council of Ministers Resolution No. 51 of 2019, YACPA self-regulated its members and required application of the latest Arabic available translation of the Handbook available from the Saudi Organization for Chartered and Professional Accountants (SOCPA).
As of the date of the assessment, ISA are adopted by law in Yemen. Therefore, its more recent activities are focused on raising awareness and supporting implementation of the standards. YACPA provides its members with the latest Arabic translation available, which as of the date of the assessment is the 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. Furthermore, Arabic translations are also available for ISA 315 (Revised 2019) and the International Standard on Related Services (ISRS) 4400 (Revised 2019).
Since all practitioners in Yemen are required to obtain their CPA licensing from YACPA, all are subject to YACPA’s examination which includes the latest ISA that are in effect. Furthermore, YACPA works with the Ministry of Higher Education and Universities to include the most up-to-date ISA in accountancy curricula.
To support its members with implementing the standards, YACPA notes that it includes ISA and standard-related topics in its newly established mandatory continuing professional development (CPD) program. There are plans to offer a full suite of training on the ISA to prepare members and practitioners for changes that will be implemented in 2022-2023. Due to in-country war and an ongoing COVID-19 pandemic, most work is conducted virtually, and YACPA launched a seminar via Zoom on financial reporting considerations for both accountants and auditors in Yemen which attracted nearly 300 participants.
YACPA notifies its members of all new, proposed, and revised international standards and other pronouncements issued by the IAASB. It also reports to continuously support its members with implementation of the standards by (i) disseminating implementation guidance; (ii) developing training activities with local universities; and (iii) raising awareness about the standards through the institute’s e-Journal and various social media platforms.
YACPA’s contribution to the adoption of ISA is commendable. As a next step, YACPA is encouraged to establish and maintain ongoing processes to ensure that its educational programming continues to incorporate the latest international standards. Furthermore, YACPA is encouraged to also establish an ongoing mechanisms to ensure that the latest translated international pronouncements are disseminated to members for application. IAASB has issued an exposure draft of the proposed separate standard for audits of Less Complex Entities. YACPA is encouraged to participate in the public consultation process for this landmark new draft standard.
SMO 4: Code of Ethics for Professional Accountants
Before the IESBA Code of Ethics was adopted by law in Yemen, YACPA focused its efforts on promoting adoption through its meetings with key officials in Government. It reports to have actively promoted the IESBA Code of Ethics to the Ministry of Industry and Trade (MIT) as well as other entities such as the Chamber of Commerce. YACPA also supported the Minister’s Council in drafting the legislation.
Since the IESBA Code of Ethics has been adopted as issued by IESBA, YACPA focuses its efforts on raising awareness and supporting implementation of the Code. YACPA reports to provide government entities such as MIT, Ministry of Legal Affairs, and Ministry of Justice, with regular updates and clarifications on revisions or updates to the IESBA Code of Ethics. It also reportedly works with the Ministry of Higher Education and Universities to include the most up-to-date ethical requirements in the curricula, as well as including ethics-related topics in its continuing professional development courses. YACPA reports to update its CPA curricula annually to include the developments in international standard-setting. It also organizes virtual seminars and events on the subject and reportedly provides materials, resources, and examples on practical application of the Code.
YACPA monitors its members’ compliance with ethical requirements and works with the Ministry of Justice to investigate and sanction members. Sanctions are imposed in line with Audit and Review of Accounts Law No. 26 of 1999 (as amended 2004).
Prior to the enactment of Council of Ministers Resolution No. 51 of 2019, YACPA self-regulated its members and required application of the latest Arabic available translation of the Code available. YACPA supports its members by providing them with Arabic translations of the Code from the Saudi Organization for Chartered and Professional Accountants (SOCPA). The latest Arabic translation available is the 2018 International Code of Ethics for Professional Accountants published.
Lastly, members are informed about the developments in the area at the international level and information on the IESBA exposure drafts is provided via its various social media platforms and e-Journal.
YACPA’s contribution to the adoption of the IESBA Code of Ethics is commendable. As a next step, YACPA is encouraged to establish and maintain ongoing due processes to ensure that its educational programming continues to incorporate the latest ethical requirements. Furthermore, YACPA is encouraged to also establish an ongoing mechanism to ensure that the latest translated international pronouncements are disseminated to members for application.
SMO 5: International Public Sector Accounting Standards
While YACPA is not responsible for the establishment of public sector accounting standards, it reports to participate in discussions with government officials to bring awareness on the importance of IPSAS and continues to identify opportunities where it may be able to cooperate with the government to support government accounting training and capacity building efforts.
In 2020, YACPA participated in a workshop held by the Central Organization of Control and Audit (COCA) in which the association recommended amending legislation to adopt IPSAS as issued by IPSASB. It also sent letters to the Ministry of Industry and Trade (MIT) and COCA encouraging the adoption of IPSAS.
To support its members that work in the public sector, YACPA organized virtual seminars and continuing professional development (CPD) for public sector accountants in 2020 and notes that it continues to offer CPD on public sector accounting standards to members and government staff. The institute is committed to keeping stakeholders and members aware of latest developments with IPSAS and best practices. It disseminates information on public sector accounting developments among other topics via social media and publications.
YACPA has demonstrated that, within the scope of its authority, it is committed and has established an ongoing process to meet SMO 5 requirements. YACPA’s recent engagement and technical involvement in the advising on the adoption and implementation of IPSAS is commendable. The institute is encouraged to continue this path and is encouraged to further consider opportunities in the area of public sector accounting and, if deemed feasible, develop a plan with a defined timeline and specific activities in the area.
SMO 6: Investigation and Discipline
Serious crimes (e.g. fraud) are addressed through the Yemeni judiciary system and by the courts. YACPA has been granted formal recognition by the Ministry of Justice to provide technical experts to support this legal process. The Yemeni legislation outlines very specific penalties for non-compliance with various aspects of professional and ethical standards. These include monetary fines as well as imprisonment for a period of six (6) months to one (1) year. These are applicable in cases such as fraud, falsifying information, signing an audit report for a company the CPA did not audit, and practicing without a license (permit).
In September 2020, the MIT approved YACPA’s proposal that entails a joint collaborative process in the area of investigation and discipline (I&D) between the Ministry’s Public Accounts Permitting Committee (PAPC) and YACPA. According to this newly approved mechanism, complaints are relayed to the joint Investigative Committee (comprising one PAPC member, one YACPA Administrative Council member; and one YACPA member from a Big 4 Firm, well-known local firm, or expert in Tax / IT). Since the Disciplinary Council has not yet been established, YACPA imposes sanctions on its members, with PAPC oversight, in line with Article 67 of the Audit and Review of Accounts Law No. 26 of 1999 (as amended 2004).
YACPA developed its own basic internal system of investigation and discipline to address professional and ethical complaints from members. Complaints are sent to the Chairman and the Administrative Council to appoint a team of YACPA members responsible for investigating the case. Decisions are brought before the Administrative Council which then implements final decisions issued against YACPA members.
YACPA conducted a self-assessment of the current I&D practices in the jurisdiction, which includes its own I&D processes, against SMO 6 requirements and reported several gaps pertaining to the scope of the system, initiation of proceedings, investigative process, disciplinary process, and public interest considerations. Nevertheless, YACPA is reportedly working with the Government to explore whether the establishment of a Disciplinary Council is feasible given the political and economic challenges facing the country, or if there may be an opportunity to amend current laws to provide YACPA with full authority to undertake I&D processes in line with SMO 6 by 2022.
YACPA notes that it has been keeping its members informed of all provisions of the ethics code and other applicable professional standards along with the consequences of non-compliance through an appropriate communications plan, which includes its CPA Program and holding informational webinars via Zoom. In the interest of transparency and raising public awareness, the association also details the process of making a complaint on its website, via Twitter, YouTube, webinars (example 1, example 2, example 3), and trainings (example 1, example 2).
YACPA reported that there has been an increase in reporting complaints which signals increased public awareness and trust in YACPA to handle professional misconduct of accounting professionals in the absence of a Disciplinary Council.
Effective and efficient I&D procedures are foundational to maintaining public trust and confidence in the profession. As a matter of priority, YACPA should report on how it is working towards addressing the gaps it has identified in its self-assessment, and to report on the progress accomplished while the Disciplinary Council is not yet established. YACPA is encouraged to continue its efforts to build its capacity in this area by learning from other PAOs in the region.
SMO 7: International Financial Reporting Standards
With no direct responsibility for setting corporate accounting standards, YACPA actively participates and contributes to the standard-setting process. For example, it reports to have actively promoted the standards to the Ministry of Industry and Trade (MIT) and the Minister’s Council in drafting the legislation for adoption which culminated in the passage of Council of Ministers Resolution No. 51 of 2019.
YACPA first organized a workshop with the World Bank in Cairo on December 19-20, 2013 focused on the importance of adopting IFRS in Yemen. The success of this event led to national stakeholders developing a national roadmap for IFRS adoption. Dr. Hajar Abdulmalek, former YACPA Chairman, also published an academic piece titled ‘Adopting and Implementing the International Accounting and Auditing Standards in the Republic of Yemen’ for use in discussions with key officials in Government such as the MIT and Chamber of Commerce to support adoption of IFRS by law.
YACPA includes the most up-to-date versions of the standards (2021 as of the date of the assessment) in its education and training material and supports implementation amongst small- and medium-sized entities (SMEs) and non-member stakeholders of financial reporting. In particular, YACPA worked closely with the governmental entity ‘Small and Micro Enterprise Promotion Services (SMEPs)’ to increase awareness of IFRS for SMEs amongst small and micro-sized enterprises.
YACPA participated in reviewing the Arabic translation of the IFRS Standards prior to distributing the Arabic version to its members to support implementation, and continues to provide them with training programs, forums, and guidance materials. It also reports to participate both in the national and international standard-setting process by encouraging its members to provide comments on the exposure drafts.
Given that IFRS and IFRS for SMEs were recently adopted, YACPA is encouraged to consider offering training courses for members geared toward the practical implementation of both IFRS and IFRS for SMEs (given the number of SMEs in the country) as well as establishing ongoing processes to ensure distribution of the most recent Arabic translation versions of the IFRS Standards. Furthermore, YACPA is encouraged to establish and maintain ongoing processes to ensure that its educational programming continues to incorporate the latest international standards.
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