Updating Accounting and Auditing Legislation Restructuring the NBAA and establishing ICPAT.
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Transcript of Updating Accounting and Auditing Legislation Restructuring the NBAA and establishing ICPAT.
![Page 1: Updating Accounting and Auditing Legislation Restructuring the NBAA and establishing ICPAT.](https://reader035.fdocuments.us/reader035/viewer/2022081515/56649d0f5503460f949e4e2b/html5/thumbnails/1.jpg)
Updating Accounting and Auditing Legislation
Restructuring the NBAA and establishing ICPAT
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Agenda
Project Background and Objectives
Approach and Methodology
NBAA/TAA (ICPAT)
Financial Reporting Act
Discussion
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Project Background and Objectives
(a)ROSC (April 2005)
(b) Stakeholders’ Workshop (March 2006)
(c) Project Implementation (August 2006)
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Project Background and Objectives
•Improve statutory framework
•Strengthen enforcement mechanisms
•Upgrade professional education and training
•Enhance capacity of regulatory and professional bodies
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Project Background and Objectives
• Raises the status of the profession in
Tanzania and internationally
• Increases the flow of well qualified
accountants
• Supports economic and business
development
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Approach and Methodology
• Extensive consultation with stakeholders
• Safeguard existing strengths e.g. examinations
• Consider international/regional practice
• Design NBAA and ICPAT structure (separation of government and private sector)
• Draft a Financial Reporting Act
• Workshop
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NBAA and TAA (ICPAT)
NBAA today:
• Regulator
• Professional members’ body
• Strong examination system
• Highly respected
• Board dominated by accountants
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NBAA and TAA (ICPAT)
TAA:
• Members’ association
• Little incentive for qualified accountants to join
• Limited resources
• No real disciplinary powers
• Participation by senior well respected professional accountants
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NBAA and TAA (ICPAT)
What is needed?
Need to separate roles and responsibilities of a regulator from those of a professional members’ body
Develop and strengthen NBAA as a regulator with public interest oversight functions
Establish a new stronger professional body using the experience in TAA
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NBAA
NBAA to be restructured:
• Membership functions passed to the new professional body
• Technical regulatory departments set up
• Examinations retained
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NBAA
New NBAA technical regulatory departments:
(i) Standards Setting
(ii)Monitoring
(iii)Audit Review
(iv)Enforcement
(v)Education (already there)
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NBAA
Reconstituted NBAA Governing Board e.g.
(i) 9-12 members
(ii) Chairman
(iii)Ex-officio members (6)
(iv)Academic member (1)
(v) Representatives of the accountancy profession---
expert members (1-2)
(vi)Eminent members (1-2)
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NBAA
(vi) Maximum of 3 qualified accountants
(apart from ex-officio members)
(vii) CEO and Heads of Technical
Departments to attend meetings
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NBAA
The NBAA will act in the public interest as a regulator of accountants and auditors in Tanzania to ensure integrity, best practice and compliance with international standards in the preparation of financial statements and the audit of those statements.
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Public Interest Entity
First Schedule of the Act:
(a)Listed companies(b)Banks and financial institutions(c)Insurance companies(d)Any entity with an annual revenue
that exceeds an amount to be determined by the Board
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Public Interest Entity
(e) Any entity that meets any two of the
following as determined by the Board:
• Revenue less than (d)
• Number of employees
• Total assets
• Total liabilities (excluding shareholders’
equity)
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Public Interest Entity
(f) Per Second Schedule any Public
Corporation or NGO that meets the criteria
set out in (d) or (e)
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NBAA
Regulatory functions include:
• Register PIEs
• Register auditors of PIEs
• Undertake practice review of audit firms
• Standards setting and monitoring
• Accredit professional bodies
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ICPAT
The draft Financial Reporting Act (FRA)
establishes a strong professional
body for accountants and auditors:
“The Institute of Certified Public
Accountants of Tanzania”
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ICPAT
As a members’ body ICPAT will
represent the interests of its members
and, in particular:
• Register members and students
• Determine practical training
requirements
• Issue certificates for public practice
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ICPAT
• Establish disciplinary procedures
• CPE/professional development
• Technical guidance
• Ensure high standards of professional
and ethical conduct
• Eventually IFAC membership
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NBAA Funding
NBAA will receive income from
(a)the Ministry of Finance
(b)auditors of PIEs registration fees
(c)PIE registration fees
(d)Examination fees
(e)Publications
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ICPAT Funding
ICPAT will receive income from:
(a)Membership fees
(b)CPE
(c)Set up costs from World
Bank/Ministry of Finance
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FRA
FRA is divided into the following main parts:
• NBAA
• Registration of Auditors
• ICPAT
• Professional Accountancy Bodies
• Setting of Standards and Monitoring
• Miscellaneous provisions
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FRA
Composition of the NBAA Board:
(a)Chairman
(b)Six ex-officio members (Regulatory
Members)
(c)Academic member
(d)Expert member (max.2)
(e)Eminent member (max.2)
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FRA
Objectives, functions and powers of the NBAA:
• S12 sets out the objectives
• S13 sets out the functions
• S14 sets out the powers
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FRA
The Technical Departments will have several functions (S20) including:
(a)Standards Setting
• Develop and adopt accounting/auditing standards after consultation with ICPAT
• Issue guidelines
• Ensure consistency with IFRS/IAS and ISA
• Standards for SMEs
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FRA
(b) Monitoring
• Review and analyse financial reports
• Identify any failures of compliance
• Monitor compliance with CPA employment rules
• Report to the Enforcement Department
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FRA
(c) Audit Review
• Register PIEs and auditors of PIEs
• Conduct practice reviews
• Ensure auditor compliance with the Act
• Accredit and oversee professional bodies
• Report non-compliance to the Enforcement Department
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FRA
(d) Enforcement
• Review findings reported by other departments or directly to the Board by other Government Agencies
• Recommend the appropriate course of action/sanctions
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FRA
(e) Education
• Preparing syllabi
• All aspects of the examination process
• Accrediting/exempting training providers
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FRA
Enforcement Procedures:
(a)Board Hearing Panel to hear objections from PIEs, auditors etc
(b)The Panel confirms, amends or quashes the recommendations/findings of the Enforcement Department
(c)Accounting and Auditing Appellate Tribunal to hear appeals from the Panel
• High Court Judge and
• 4 with demonstrated expertise
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FRA
Registration of Auditors:
(a)To audit a PIE an auditor needs to be registered with NBAA
(b)Need to register the audit firm with NBAA
(c)NBAA will review quality assurance procedures of audit firms
(d)Sanctions
(e)Material Irregularities
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FRA
ICPAT:
(a)Covered by S42-64
(b)Council S45-47
(c)Establishes a potentially strong professional body
(d)Extensive objectives and functions set out in the Act
(e)Registration, practical experience and disciplinary functions
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FRA
(f) Certification
(g) CPE and training
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FRA
NBAA Oversight of Professional Bodies:
(a)For accreditation by NBAA a professional body (including ICPAT) must demonstrate it is undertaking various activities in a satisfactory manner (S65)
(b)NBAA has public oversight of professional bodies
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FRA
Setting of Standards and Monitoring:
(a)IFRS/IAS for PIEs
(b) SMEs
(c) ISA
(d) Compliance and Monitoring
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FRA
(e) Practice review of auditors
(f) Powers of investigation
(g) Sanctions possible against registered auditors, PIEs and their officers/directors
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Transitional Provisions
(a)Transfer of professional membership
(b)Continuity in audit of PIEs
(c)Continue audit practice
(d)Standards apply to SMEs
(e)SOEs deferred compliance
(f)IFAC membership
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Effect on other legislation
• S78 repeal of the Auditors and
Accountants (Registration) Act, 1972
• Recommendations to amend 25 other
listed Acts