Institute of Chartered Accountants of Namibia

The Public Accountants’ and Auditors’ Board (PAAB) is legally responsible for establishing and implementing a quality assurance review system in the jurisdiction. According to ICAN, the PAAB’s QA review system, originally established by ICAN, is line with the SMO 1 requirements. The PAAB’s QA methodology was recently updated to address the quality management standards and circulated to all the PAAB-registered auditors.

ICAN participates on the PAAB’s Quality Assurance Committee (QAC) and communicated the significance of the quality management standards (ISQM 1, 2, and ISA 220 revised) to the PAAB and audit firms. It is also supporting members to prepare for effective implementation of the standards by updating its implementation guidance and providing CPD courses.

Looking forward, ICAN indicates that the PAAB is in the process of updating its enabling legislation to increase the scope of its regulation from registered auditors to all practitioners providing accounting services in Namibia.

ICAN has demonstrated that it has ongoing process in place to maintain its level of fulfillment with the SMO 1 obligations and is committed to continuous improvement.

Current Status: Sustain

ICAN is responsible for implementing initial professional development (IPD) that are determined by the Public Accountants’ and Auditors’ Board (PAAB) and establishing continuing professional development (CPD) requirements for professional accountants. The current educational requirements in Namibia are aligned with the latest IES — both the PAAB and ICAN use the South African Institute of Chartered Accountants (SAICA) as a model for IPD and CPD requirements.

The education process to receive ICAN’s qualification is as follows: a formal competency-based academic education (university program); a standard-setting examination – Initial Test of Competence (ITC); a formal competency-based professional education (professional program); a professional examination – Assessment of Professional Competence (APC); and practical experience (training program). ICAN has a memorandum of agreement with South African Institute of Chartered Accountants (SAICA) to use the SAICA professional examinations and is bound by agreement to apply the SAICA training and regulations. One difference is that as from 2019, the APC examination run by ICAN is a local Namibian exam which applies and is based on Namibian legislation.

In 2018, ICAN compiled a joint accreditation manual with the National Council for Higher Education, which is responsible for accrediting Namibian tertiary institutions that provide accountancy programs leading to ICAN’s qualifying examinations. This manual provides the accreditation methodology and assessment criteria for Namibian tertiary education institutions and reduces the risk conflicting communications from the NCHE and ICAN regarding tertiary programming rigor. Four university programs have been accredited since 2019.

Meanwhile, the PAAB has adopted the SAICA Training model and Regulations as Namibian Regulations its practical experience requirements, stipulating that that trainee accountants must obtain and present evidence of their competency in four core subjects, Namibian Income Tax, and VAT from a PAAB-accredited training office. ICAN, through its Training and Education Committee (TRECO), monitors changes to the IES and communicates them to the PAAB to ensure that accredited training offices are reviewed for compliance with the requisite IES requirements.

Additionally, the TRECO sets CPD requirements. ICAN members must annually submit a CPD declaration to confirm compliance with the CPD requirements. In 2019, ICAN states that its CPD policy was revised to reflect revised IES 7. ICAN states that it advertises the CPD events in local media and via email and provides its members with a copy of the CPD policy and declaration statement to reinforce members’ knowledge of their obligations. In 2020-2022, it offered CPD on a variety of topics, including: IPSAS, IFRS, NOCLAR, ethics corporate governance, and ethics, tax, and prevention of organized crime. .

ICAN has demonstrated that it has implemented new initiatives to further meet the SMO 2 obligations and is committed to continued improvement.

Current Status: Sustain

In 2014, the Public Accountants’ and Auditors’ Board (PAAB) officially delegated the responsibility of issuing guidance and standards on audit and assurance to ICAN. In turn, ICAN has adopted all ISA and pronouncements as issued by the IAASB. ICAN reports this is a standing adoption and all new pronouncements are adopted as and when they are effective, with no time lag in effective date or modifications.

ICAN has established an Accounting and Auditing Standards Committee which is responsible for monitoring changes to the standards and pronouncements issued by the IAASB. As part of its collaboration with other stakeholders, ICAN has invited a member of the PAAB, the Bank of Namibia, and the Namibia Financial Institutions Supervisory Authority to sit on its Technical Committee.

ICAN’s Technical Committee supports its members by responding to queries received on technical matters on ISA. When the Technical Committee, after consultation with relevant stakeholders, determines that certain queries require guidance for its members it will subsequently issue a Circular to inform its entire membership. Circulars are binding on members of the institute. ICAN then uploads the Circulars to its website to inform its members and uses an instant messaging software to alert its members of pronouncements, legislative changes, and other pertinent issues.

In 2019, ICAN strengthened its operational capacity by hiring a Technical Standards Executive to support the Accounting and Auditing Standards Committee. The Executive ensures that members receive updates to the standards—for example, the new ISQM 1, 2, and ISA 220 were sent out as an alert to all audit firms in Namibia—and organizes CPD training on audit and assurance throughout the year. ICAN issued guidance to support the adoption of new & recently revised standards, including updates for ISRS 4400 (Revised) and a summary of the quality management standards for SMPs.

Finally, ICAN also participates in the international standard-setting process by submitting comments to exposure drafts published by the IAASB through its Technical Committee. ICAN has demonstrated that it has ongoing process in place to maintain its level of fulfillment with the SMO 3 obligations and is committed to continuous improvement.

Current Status: Sustain

ICAN is responsible for establishing ethical requirements for its members— Chartered Accountants. ICAN has adopted the latest IESBA Code of Ethics and confirmed that its Council’s policy decision is that all pronouncements issued by the IESBA are adopted as and when issued. In addition, ICAN has successfully encouraged the Public Accountants’ and Auditors’ Board (PAAB) to also adopt the 2021 International Code of Ethics for Registered Accountants and Auditors through its representatives on the Board.

ICAN revised all historical circulars, which contained illustrative audit reports, that were impacted by the amendments per the 2018 Code. In 2020, ICAN issued Circular – 2020-01 Guidance to Chartered Accountants (Namibia) on NOCLAR.

In 2021, ICAN introduced the CA leadership Masterclass for ICAN members. The masterclass covers the module “Ethical leadership”.

In 2022, ICAN, in partnership with the Namibia Institute of Corporate Governance (NICG), facilitated Corporate Governance training for ICAN members. The training reiterated the importance of ethical leadership for professional accountants. In 2023, ICAN plans to host, in addition to the annual ethics CPD, a dedicated CPD for the newest revisions on Non-Assurance Services and fees in the 2022 IESBA Code.

Nationally, ICAN participated in a review of the King III Code on Corporate Governance in collaboration with the Namibian Stock Exchange and the Institute of Directors of Southern Africa to adapt the Code to Namibian legislation. The results of the review were published as the NAMCODE and are being promoted to the government and private sector as a guidance to best practices in governance. ICAN has demonstrated that it has ongoing process in place to maintain its level of fulfillment with the SMO 4 obligations and is committed to continuous improvement.

Current Status: Sustain

Central government financial reporting is determined by the State Finance Act of 1991 which stipulates cash-basis reporting while regional and local government financial reporting is governed by the Local Authorities Act of 1992. The latter legislation does not prescribe applicable accounting standards. ICAN reports that one municipality has adopted IPSAS for financial reporting purposes. In 2018, as part of the best endeavors concept, ICAN endorsed IPSAS as a reporting framework. The endorsement of IPSAS by ICAN allows Namibian entities to apply IPSAS if they choose to do so but ICAN is not authorized to mandate the reporting frameworks for public sector entities.

Following ICAN’s endorsement of IPSAS as a public sector reporting framework, it held two CPD events for members and stakeholders. It notes it has increased its engagement with regional and local authorities by sitting on interim steering committees working on capacity building within Regional Councils and Local Authorities for Internal Auditors and appropriately qualified CEOs who wish to use IPSAS as their financial reporting framework.

ICAN reports that there has been a gradual shift in decisions to adopt IPSAS with some commercial banks now requiring financial statements be in line with IPSAS to access capital. ICAN engages regularly with the Auditor General’s Office and the Ministry of Finance on the topic and in 2016, formalized a Terms of Reference for a Public Sector Committee comprised of representatives of the Ministry of Finance, the Auditor General and the Accountant General. The Committee is intended to create a platform that will allow for the discussion of IPSAS and how the institute can support the adoption of IPSAS, starting with cash-basis.

In 2021, ICAN formally constituted the Public Sector Committee. In 2022, the ICAN Public Sector Committee met with the organization responsible for public sector training in Namibia regarding the progress of IPSAS training and the challenges faced. In addition, ICAN engaged PAFA regarding how they could assist. The focus for 2023 will be engaging with the Accountant General and Ministry of Finance to understand progress and offer support.

ICAN has demonstrated that it has ongoing process in place to maintain its level of fulfillment with the SMO 5 obligations and is committed to continuous improvement.

Current Status: Sustain

ICAN has established I&D procedures for its members and reports its I&D system is operational and functioning. In 2019, ICAN reviewed its I&D procedures against the SMO 6 best practices as well as other PAOs’ I&D systems in comparable jurisdictions and reports that its procedures mostly meet SMO 6 best practices. ICAN has one committee tasked with investigation of complaints and one that administers disciplinary actions. It notes that although members are appointed to the committees with careful consideration of independence, only members of ICAN serve on the committees and composition does not include any non-professionals. Additional areas for improvement include setting a timeframe for disposal of cases and establishing an independent review of complaints for which there was no follow-up.

Subsequently, in 2020 and 2021, ICAN made a comparison between and SAICA’s disciplinary processes and updates were made to ICANs by-laws, which were approved in 2021. The changes clarified the steps to be followed by ICAN and included a process for alleged misconduct.

In 2022, ICAN engaged a legal practitioner for advice on what ICAN’s powers are with respect to complaints regarding personal misconduct. In 2023, ICAN will draft an internal Investigation & Disciplinary policy to formalize how it will handle such complaints.

In 2021 and 2022, ICAN investigated 4 cases involving members and trainee accountants. ICAN will only deal with a complaint related to a Registered Accountant and Auditor once the PAAB has completed its findings. This is to avoid contradictory findings being reached between ICAN and the audit regulator on the same complaint.

All new members are provided with a copy of the institute’s Constitution, By-laws and the Code of Ethics at the annual new member welcoming event and are informed of consequences of non-compliance with standards and any misconduct. ICAN notes that it is reviewing how it can be more proactive in dealing with minor complaints and media reports of any members. It has partnered with the Law Society to determine what its legal options are as part of restoring trust in the profession. The institute has also started an ongoing peer review process that identifies substandard or deficient work among professional accountants. ICAN has demonstrated that it is carrying out I&D procedures but there is opportunity to review its procedures to identify and make changes that would enable to it completely fulfill the SMO 6 obligations.

As is possible, ICAN is encouraged to consider how it may incorporate components of SMO 6 best practices which the institute has previously identified as areas for consideration and improvement as part of fulfilling its public interest mandate and commitment to ensuring public trust in the profession.

Current Status: Review & Improve

As authorized by the Companies Act 2004, ICAN is the entity responsible for adopting private sector accounting standards in Namibia and having adopted all IFRS as issued by the IASB since 2005 and all IFRS for SMEs since 2010, it focuses on ensuring the proper implementation of the standards.

ICAN has established an Accounting and Auditing Standards Committee which is responsible for monitoring changes to the standards and pronouncements issued by the IASB. The Committee is also responsible for commenting on drafts issued by the IASB. The Committee supports ICAN members by receiving queries and requests from members regarding technical matters on IFRS. After consultation with relevant stakeholders, it will issue a Circular to inform and guide its entire membership. ICAN then uploads the Circulars to its website and alerts its members of pronouncements, legislative changes, and other pertinent issues. In 2019, ICAN strengthened its operational capacity by hiring a Technical Standards Executive to support the Accounting and Auditing Standards Committee.

ICAN states that it offers IFRS seminars three times a year for a total of four days of training. These are taught by external experts contracted by ICAN especially for the seminar. ICAN has demonstrated that it has ongoing process in place to maintain its level of fulfillment with the SMO 7 obligations and is committed to continuous improvement.

Current Status: Sustain