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.
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 promoted the need for such a system to 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 a 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 completed a final review of the QA review system in January 2022 with World Bank support. Between 2021-2022, YACPA engaged in extensive outreach with its members, audit firms, Central Bank of Yemen, Central Organization for Control and Auditing (COCA), and MIT to increase awareness of a strong QA system and the steps required to operationalize it. The intention is to begin with voluntary reviews.
To support its members, in 2023, together with IFAC staff, YACPA has been in contact with the Palestinian Association of Certified Public Accountants (PACPA) to organize a training program for 25 YACPA members on the quality review process during 2023-2024 (pending procurement of funding). YACPA has also been offering its members continuing professional development training that include topics related to QA to prepare them for the implementation of future mandatory audit QA reviews. It also provided members with training to introduce ISQM 1 and ISQM 2 in September 2022.
YACPA’s contribution to the development of a mandatory QA review system in the jurisdiction, which contributes to audit quality, and its willingness to conduct the reviews are commendable. YACPA is encouraged to continue building its capacity and leveraging experiences of PAOs as it approaches the first implementation of voluntary reviews.
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.
In 2022, YACPA participated in an IES alignment project with IFAC & the International Panel on Accountancy Education (IPAE) and confirmed gaps in alignment with 2019 revised IES at the jurisdiction level. YACPA reports to be in the process of conducting a follow-up gap analysis, particularly in reviewing university curricula.
YACPA engages with the Ministry of Higher Education to promote updating all Yemeni university curricula and education material to be in line with the IES. In March 2023, YACPA visited universities to discuss revised 2019 IES requirements which resulted in agreement to update syllabi to incorporate accountancy standards as issued by the standard setting bodies. 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.
In September 2020, YACPA received approval from Public Accounts Permitting Committee (PAPC) to require a minimum of 40 continuing professional development (CPD) hours annually to renew licenses. YACPA issued a circular to members informing them that non-compliance with the CPD requirement will result in disciplinary sanctions, effective January 2022. To support its members with implementation of this requirement, YACPA provided them with an explanatory guide on how to calculate CPD hours. Furthermore, YACPA 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.
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. Specific actions to close 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 be used to conduct an assessment and to consider available implementation support materials. Furthermore, the revised 2019 IES emphasize the need for professional accountants to demonstrate competencies to carry out their roles and responsibilities throughout their initial professional development programs. It is not clear from the available information if the IPD requirements, particularly university accounting education and practical experience arrangements, align with the IES requirements.
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. YACPA’s 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. 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).
Now the Council of Ministers Resolution No. 51 of 2019 requires the application of ISA and related pronouncements as issued by IAASB in all mandatory audits. The 2021 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is in use.
YACPA’s current 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 2020 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements.
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 mandatory continuing professional development (CPD) program. In 2022 YACPA organized five seminars and two training seminars in 2023 on IAASB pronouncements to improve the quality of resulting audits and enhance understanding of new and revised standards.
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.
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 meetings with key officials in Government. It 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 self-regulated its members and required application of the latest Arabic available translation of the Code available.
YACPA supported the Minister’s Council in drafting Resolution No. 51 of 2019, which came into effect on January 1, 2020 and requires all professional accountants in the jurisdiction to adhere to the IESBA Code of Ethics and related pronouncements as issued by IESBA. YACPA indicates that the 2022 Handbook of the International Code of ethics for Professional Accountants including International Independence Standards is in effect.
YACPA focuses its current 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 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 updates its CPA curricula annually to include the developments in international standard-setting.
The association also organizes virtual seminars and events on the subject and provides materials, resources, and examples on practical application of the Code. Members are informed about the developments at the international level and information on the IESBA exposure drafts is provided via its various social media platforms and e-Journal. Additionally, 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 2021 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).
SMO 5: International Public Sector Accounting Standards
While YACPA is not responsible for the establishment of public sector accounting standards (which follow a national Unified Reporting System), 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 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 on an annual basis. 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 indicated that, within the scope of its authority, it is using best efforts 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
Legally, the Ministry of Industry and Trade (MIT) is empowered by Audit and Review of Accounts Law No. 26 of 1999 (as amended 2004) (Articles 67-70 & 73) to establish a Disciplinary Council responsible for investigation and disciplinary processes of professional accountants. However, the Council has not yet been established. 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 the 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). YACPA will then impose 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).
For more 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.
YACPA developed its own 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 working with the Government to explore whether the establishment of a state-level 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 in the foreseeable future.
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 state-level Disciplinary Council.
Effective and efficient I&D procedures are important as part of 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. 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. YACPA’s former 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. These initiatives ultimately culminated in the passage of Council of Ministers Resolution No. 51 of 2019 that adopted IFRS and IFRS for SMEs.
YACPA includes the most up-to-date versions of the standards in its education and training material and supports implementation amongst small- and medium-sized entities (SMEs) and other 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.
Since YACPA has an open license agreement with the IFRS Foundation, it participates in reviewing the Arabic translations of the IFRS Standards prior to distributing 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.
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.
Haddah Complex Building No. 3