Kenya

The Companies Act, 2015 establishes the corporate financial reporting and audit framework in Kenya. The Act requires companies to keep accounting records and prepare financial statements for each financial year. It also provides for the preparation, circulation, filing, and audit of financial statements. Small companies may qualify for an exemption from statutory audit under Section 711 of the Act, subject to specified turnover and net asset thresholds.

The Accountants Act, 2008 establishes the Institute of Certified Public Accountants of Kenya (ICPAK) and authorizes its Council to issue standards of professional practice, including accounting and auditing standards, that form the basis of accountancy practice for members in the preparation, verification, and audit of financial statements. The Act further requires persons offering public accountancy services to hold a practising certificate issued under the Act.

Kenya has adopted International Financial Reporting Standards (IFRS) Accounting Standards and International Standards on Auditing (ISA) for use in the jurisdiction through ICPAK. Full IFRS is required for domestic publicly accountable entities, while the IFRS for SMEs Accounting Standard is permitted for entities that are not publicly accountable. This is consistent with the IFRS Foundation’s jurisdictional profile for Kenya.

Banks and other deposit-taking institutions, listed entities, insurance companies, and regulated savings and credit co-operatives are subject to sector-specific regulatory requirements in addition to the Companies Act. The Central Bank of Kenya (CBK) oversees banks and other deposit-taking institutions and retains approval powers relating to auditors. The Capital Markets Authority (CMA) requires listed entities and issuers seeking public offers to present audited financial statements prepared in accordance with IFRS. The Sacco Societies Regulatory Authority (SASRA) publishes lists of approved external auditors for regulated savings and credit co-operatives. Insurance companies are regulated by the Insurance Regulatory Authority (IRA), which requires the appointment of approved external auditors.

The Accountants Act, 2008 regulates the accountancy profession in Kenya and establishes the Institute of Certified Public Accountants of Kenya (ICPAK) as the professional body responsible for developing and regulating the profession. The Act sets out ICPAK’s functions, which include promoting standards of professional competence and practice, advising the Kenya Accountants and Secretaries National Examinations Board (KASNEB) on examination standards and policies, advising the Cabinet Secretary on matters relating to financial accountability, and exercising responsibilities connected with registration, professional standards, quality assurance, and discipline.

The profession is regulated through a shared framework involving ICPAK, KASNEB, and the statutory Registration and Quality Assurance Committee established under the Act. KASNEB is responsible for preparing syllabuses, conducting professional and technician examinations, and issuing certificates to successful candidates. Persons seeking to undertake prescribed accountancy examinations are registered with KASNEB and, under the Act, also registered with ICPAK as trainee accountants.

The Accountants Act provides that persons who wish to practise as accountants must hold a practising certificate. The Registration and Quality Assurance Committee is responsible for considering and approving applications for registration as an accountant, granting practising certificates and annual licences, monitoring compliance with professional and quality assurance standards, and referring matters arising from quality assurance reviews for disciplinary inquiry where appropriate.

To qualify for registration as an accountant, a person must hold the Final Accountancy Certificate awarded by KASNEB or another qualification approved by the Council of ICPAK, with the approval of the Cabinet Secretary. The Act also permits the Registration and Quality Assurance Committee to require evidence of adequate knowledge of local law and practice, adequate accounting experience, and acceptable professional conduct and character.

ICPAK’s membership structure includes fellows, members, associate members, and trainee accountant members. The designation Certified Public Accountant (Kenya), or CPA(K), is reserved for members of ICPAK. ICPAK states that completion of the Certified Public Accountant qualification administered by KASNEB is required for registration as a member of the Institute.

In practice, ICPAK indicates that registration as a non-practising member is open to Certified Public Accountant graduates with at least three years of experience, while practising membership is open to existing ICPAK members with additional supervised experience in external audit. The current ICPAK licensing framework also sets further requirements for practising licences, including continuing professional development and mandatory training.

There is currently no independent public audit oversight authority in Kenya. Statutory auditors are regulated by the Institute of Certified Public Accountants of Kenya (ICPAK) under the Accountants Act, 2008.

Oversight of auditors is exercised through ICPAK’s statutory framework, including the Registration Committee, the quality assurance review system established under the Accountants (Quality Assurance Review) Regulations, 2022, and the Disciplinary Committee established under the Act. The Registration Committee is responsible for granting practising certificates and annual licences, conducting quality assurance reviews, and referring matters arising from quality assurance findings for disciplinary action where appropriate.

Accordingly, the regulation and oversight of statutory auditors in Kenya remain under a self-regulatory framework led by ICPAK, rather than an independent audit oversight body. Although the establishment of an independent oversight authority has been discussed in past reform reports, no such body has been established as of the date of this assessment.

Institute of Certified Public Accountants of Kenya (ICPAK) 

The Institute of Certified Public Accountants of Kenya (ICPAK), established in 1978, is the statutory professional accountancy organization responsible for regulating the accountancy profession in Kenya in accordance with the Accountants Act, 2008. Membership in the Institute is mandatory for individuals who wish to use the designation Certified Public Accountant (Kenya), or CPA(K), and for those offering public accountancy services.

ICPAK’s statutory functions include promoting standards of professional competence and practice among its members; advising the Kenya Accountants and Secretaries National Examinations Board (KASNEB) on examination standards and policies; advising the Cabinet Secretary on matters relating to financial accountability; establishing continuing professional development requirements; issuing practising licences; conducting quality assurance reviews; establishing ethical requirements; and administering investigative and disciplinary processes. The Institute also maintains registers of members and licensed firms and provides technical guidance and thought leadership on financial reporting, auditing, governance, and sustainability matters.

ICPAK’s membership comprises fellows, members, associate members, trainee accountants, and practising members. The Institute currently serves a broad membership base across public practice, business, public sector, academia, and other sectors of the economy.

In addition to being a full member of the International Federation of Accountants, ICPAK is also a member of the Pan African Federation of Accountants.

In accordance with the Accountants Act, 2008, the Institute of Certified Public Accountants of Kenya (ICPAK) has direct responsibility for establishing and implementing the quality assurance (QA) review system in the jurisdiction. The legal framework is further set out in the Accountants (Quality Assurance Review) Regulations, 2022, which establish the scope, procedures, reviewer requirements, and review cycle for the system.

The QA review system is operational and applies to members and firms in practice. Under the Regulations, firms and members in practice are subject to a three-year review cycle as routine visits, while firms whose profile or self-review indicates higher public risk may be selected for annual review. In addition, no person may be issued with an annual licence unless a QA review has been undertaken within the previous three years, or within the previous year in the case of public interest entity audits.

The QA framework covers all assurance work, including public interest entity audits, as well as non-assurance work and related services. Reviewers must meet prescribed competence requirements, sign declarations of independence, and comply with confidentiality requirements. The Regulations also establish a link between QA findings and further investigation, including referral where a firm’s operational practices are believed to have violated International Standards on Quality Management or other relevant standards.

International Standards on Quality Management 1 and 2 are adopted in Kenya through the Accountants (Standards of Professional Practice and Ethical Conduct) Regulations, 2022, which require members to comply with professional accountancy standards, including auditing standards, as issued by the International Federation of Accountants or other applicable regulatory or international standards. ICPAK’s current implementation and training materials also confirm active application of International Standards on Quality Management 1 and 2 within the jurisdiction.

Based on the current legal and regulatory framework, the QA review system is established and operational for all mandatory audits and is broadly aligned with Statement of Membership Obligations 1 requirements. The combination of mandatory coverage, risk-based and cyclical reviews, reviewer competence and independence provisions, and links to investigative follow-up supports an Adopted assessment.

Current Status: Adopted

The Accountants Act, 2008 establishes initial professional development requirements, including adequate knowledge of local law and practice, experience in accounting, and acceptable professional conduct. Responsibility for the education and training of professional accountants is shared between the Institute of Certified Public Accountants of Kenya (ICPAK) and the Kenya Accountants and Secretaries National Examinations Board (KASNEB).

KASNEB is the statutory body responsible for setting the Accounting Technician Diploma and Certified Public Accountant curricula and administering examinations for candidates seeking registration as professional accountants. Both ICPAK and KASNEB state that the curricula and examinations are aligned with the International Education Standards (IES). In 2021–2022, ICPAK jointly with KASNEB undertook a comprehensive review of the structure and content of the professional education program to ensure continued alignment with the IES and to incorporate emerging issues and developments in the profession.

ICPAK has also established continuing professional development requirements for its members and indicates that these requirements are aligned with the latest IES. The periodic review of the qualification framework and continuing professional development requirements supports the conclusion that the IES are adopted for aspiring and professional accountants in the jurisdiction.

Current Status: Adopted

The Accountants Act, 2008 authorizes the Institute of Certified Public Accountants of Kenya (ICPAK) to issue standards of professional practice for members. The Accountants (Standards of Professional Practice and Ethical Conduct) Regulations, 2022 require members to comply with accounting and auditing standards as issued by the International Federation of Accountants or any other applicable regulatory or international standards. Accordingly, International Standards on Auditing (ISA) are adopted in Kenya through direct reference to the international standards and apply in the jurisdiction without local modifications. On this basis, the applicable handbook in use is the 2025 edition, and the adoption status remains Adopted. ICPAK is also providing training on the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, although no separate legal source was identified expressly confirming its formal adoption.

Current Status: Adopted

In accordance with the Accountants Act, 2008, the Institute of Certified Public Accountants of Kenya (ICPAK) is mandated to establish ethical requirements for its members. The legal basis is further supported by the Accountants (Standards of Professional Practice and Ethical Conduct) Regulations, 2022, which require members to comply with professional and ethical standards as issued by the International Federation of Accountants and other applicable regulatory standards.

ICPAK first adopted the 2009 International Ethics Standards Board for Accountants (IESBA) Code of Ethics as the ICPAK Code of Ethics and has continuously updated it to incorporate new and revised requirements issued by the IESBA. Accordingly, the applicable handbook in use is the 2025 edition, and the adoption status remains Adopted.

Current Status: Adopted

Under the Public Finance Management Act, 2012, the Public Sector Accounting Standards Board (PSASB) is authorized to prescribe generally accepted standards for the development and management of accounting and financial systems by all state organs and public entities in Kenya.

The Board has adopted International Public Sector Accounting Standards (IPSAS) issued by the International Public Sector Accounting Standards Board for application in the public sector. Current PSASB guidance, reporting templates, and published handbooks confirm that accrual-basis IPSAS are being applied across significant segments of the public sector, including national government entities, county governments, state corporations, semi-autonomous government agencies, and public funds and schemes. The PSASB website currently provides International Public Sector Accounting Standards Board 2024 handbooks and 2024–2025 accrual reporting templates for these entities.

PSASB has also continued to issue local implementation guidance and templates based on newly issued IPSAS standards, including guidance issued in 2025 and 2026 on leases, property, plant and equipment, measurement, and budget reporting under accrual accounting. This demonstrates an active and ongoing process to incorporate new and revised standards into the Kenyan public sector reporting framework.

Notwithstanding this significant progress, different reporting frameworks continue to apply across categories of public entities, and implementation remains phased across the public sector. Accordingly, the adoption status remains Partially Adopted.

Current Status: Partially Adopted

The Accountants Act, 2008 establishes the legal foundation for the investigative and disciplinary system in Kenya and empowers the Institute of Certified Public Accountants of Kenya (ICPAK) to investigate and discipline its members. The Registration Committee may undertake investigations, requisition evidence, and examine records and documents, while the Disciplinary Committee conducts inquiries and recommends sanctions. The 2022 Accountants Regulations further define acts of professional misconduct. The system is operational for professional accountants regulated by ICPAK. However, as the investigation function is not carried out by a separate independent investigation body and appeals are made to the Council, the system does not appear to fully incorporate all Statement of Membership Obligations 6 requirements. Accordingly, the adoption status remains Partially Adopted.

Current Status: Partially Adopted

The Accountants Act, 2008 establishes the Institute of Certified Public Accountants of Kenya (ICPAK) as the recognized accounting standard-setting authority for the profession. Kenya has adopted International Financial Reporting Standards (IFRS) Accounting Standards as issued by the International Accounting Standards Board without modifications, including the effective date.

According to the IFRS Foundation jurisdictional profile for Kenya, IFRS Accounting Standards are required for listed companies, financial institutions, and certain government-owned companies. This includes domestic publicly accountable entities such as listed entities, banks, insurance companies, and other entities that hold assets in a fiduciary capacity for a broad group of outsiders.

The IFRS for SMEs Accounting Standard is also adopted in Kenya and is permitted for all entities that are not publicly accountable and that prepare general purpose financial statements. Alternatively, such entities may elect to apply full IFRS Accounting Standards. The IFRS Foundation specifically states that for all SMEs other than certain government-owned entities, the IFRS for SMEs Accounting Standard is permitted.

Banks and similar financial institutions, deposit-taking savings and credit cooperatives, non-deposit-taking cooperatives, listed companies, and insurance companies are regulated by different authorities; however, as publicly accountable entities, these entities are required to apply full IFRS Accounting Standards. Accordingly, the adoption status remains Adopted.

Current Status: Adopted

Relevant Organizations

• Central Bank of Kenya (CBK)
• Institute of Certified Public Accountants of Kenya (ICPAK)
• Insurance Regulatory Authority (IRA)
• Kenya Accountants and Secretaries National Examinations Board (KASNEB)
• Public Sector Accounting Standards Board (PSASB)
• Sacco Societies Regulatory Authority (SASRA)

Relevant Legislation

• Accountants Act, 2008
• Accountants (Quality Assurance Review) Regulations, 2022
• Accountants (Standards of Professional Practice and Ethical Conduct) Regulations, 2022
• Companies Act, 2015
• Public Finance Management Act, 2012

Relevant Publications

• ICPAK, Annual Report 2024
• ICPAK, SMO Action Plan, 2023.
• IFRS Foundation, Use of IFRS Standards by Jurisdiction: Kenya
• Public Sector Accounting Standards Board, Financial Reporting Templates and IPSAS Guidance
• World Bank, Report on the Observance of Standards and Codes (ROSC): Accounting and Auditing, Kenya, April 2010