Federation of CPA Associations of Chinese Taiwan

In Chinese Taiwan, both the Financial Supervisory Commission (FSC) and the Federation of CPA Associations of Chinese Taiwan (FCPAACT) are responsible for quality assurance (QA) reviews. Both organizations operate distinct QA review systems with the FSC monitoring the QA review mechanism of the FCPAACT.

The FCPAACT’s Peer Review Committee is responsible for administering the institute’s QA review mechanism. The Peer Review Committee includes representatives from local CPA firms, university academics, and experts in the profession who perform inspections via the practice review program. Annual reviews are carried out every five years for member firms. In addition, the committee maintains an ongoing process to review the structure of the practice review program to ensure that it operates in line with Republic of China Generally Accepted Auditing Standards (ROC GAAS). The FCPAACT reports that a total of 31 reviews were conducted.

As of May 2024, the FCPAACT reports that most of the requirements of SMO 1 have been incorporated; however, improvements are needed around the frequency of quality control reviews The FCPAACT offers its members continuing professional development (CPD) programs on quality management policies and procedures and analyses of common audit deficiencies. Upon completion of a QA review, the Peer Review Committee will follow-up with the firm(s) to ensure suggested improvements are being undertaken.

Current Status: Sustain

The Certified Public Accountants Act (the Act) establishes all initial professional development (ID) and continuing professional development (CPD) requirements in Chinese Taiwan. As prescribed under the Act, the Financial Supervisory Council (FSC) is responsible for administering all IPD for individuals to become Certified Public Accountants (CPAs), while the Federation of CPA Associations of Chinese Taiwan (FCPAACT) is responsible for implementing CPD requirements for CPAs as overseen and prescribed by the FSC. Local universities are responsible for establishing and administering the accounting degree programs that are required to be completed for individuals to enter the profession. The CPA exam, which is taken following the attainment of a university degree, is administered by the Ministry of Examination. As of May 2024, the IES are adopted.

The FCPAACT’s Professional Education Committee (PEC) develops and facilitates CPD courses for FCPAACT members and has an ongoing process to implement disciplinary measures for members who do not comply with CPD requirements. The institute has amended its bylaws to enhance its monitoring and verification mechanisms to ensure that members comply with CPD requirements.

Current Status: Sustain

The Financial Supervisory Commission (FSC) is authorized to set auditing standards and has delegated its responsibility in this area to the Auditing Standards Committee of the Accounting Research and Development Foundation (ARDF). In turn, the ARDF has adopted the Republic of China Generally Accepted Auditing Standards (ROC GAAS), which are converged with the 2021 International Standards on Auditing (ISA). The FCPAACT concentrates on providing standard-setting and implementation support.

The FCPAACT is responsible for reviewing all updates and revisions as issued by the IAASB and ensuring that continuing professional development (CPD) courses are up to date. The institute offers different seminars on the updates to the standards. The FCPAACT also participates and supports standard-setting activities by responding to exposure drafts issued by the IAASB, disseminating updates to the profession, and working with the ARDF to ensure that there is an ongoing process to update the relevant standards to be applied in Chinese Taiwan.

The FCPAACT is encouraged to provide updates when the 2023 ISA will be adopted.

Current Status: Review & Improve

Under the Certified Public Accountants Act of 2009, the Federation of CPA Associations of China Taiwan (FCPAACT) is responsible for establishing ethical requirements for Certified Public Accountants, with approval by the Financial Supervisory Commission (FSC). The FCPAACT’s Ethics Code Committee (ECC) has established an ongoing process for reviewing the latest IESBA Code of Ethics. As of May 2024, the 2018 Code is adopted.

In addition to maintaining up-to-date ethical requirements, the ECC is also responsible for organizing continuing professional development (CPD) training on the Code of Ethics and other ethical matters to raise awareness and support implementation. The FCPAACT also shares information related to ethical requirements in its publications and via dedicated ethics webinars. Issues and knowledge- sharing are also distributed in publications and the institute and its members have participated in various webinars on ethics. All CPAs are provided the FCPAACT’s Code and are required to sign a CPA practicing declaration adhering to the Code. Any cases of non-compliance to the Code are referred to the CPA Discipline Committee for further action. In addition, the FCPAACT reports that a dedicated inbox has been established for members to lodge complaints regarding violations of the Code via its website. Lastly, the institute reports that it participates in the international standard-setting process by reviewing and responding to exposure drafts issued by the IESBA.

The FCPAACT is encouraged to clarify when there will be plans to adopt the latest Code.

Current Status: Execute

Under the Accounting Act, the Directorate General of Budget, Accounting & Statistics (BAS) of the Executive Yuan have the responsibility to adopt accounting standards for the public sector. The current procedures and standards for public sector accounting were updated in 2019 with the publication of the revised Governmental Accounting Concepts Statements and Governmental Accounting Pronouncement. The FCPAACT indicates that the pronouncement refers to the IPSAS and follows best practices adopted by other jurisdictions. As reported by the FCPAACT, the pronouncement adopts a system of accrual-based accounting except for activities of the treasury which still follows a cash-based system.

The FCPAACT supports the implementation of government accounting standard activities by working with the BAS and ensuring the BAS is updated on matters related to the IPSASB and IPSAS. A representative of the FCPAACT sits on the Government’s Public Sector Accounting Standards Committee that is responsible for issuing guidance and procedures for accounting in the public sector. The FCPAACT is also identifying other opportunities to engage with relevant government agencies to promote the adoption of IPSAS and assist in training on IPSAS for its members who work in the public sector.

Lastly, the FCPAACT reports that it has actively promoted to its members to comment on exposure drafts issues by the IPSASB and the institute itself participated in the International Public Sector Financial Accountability Index: 2018 Status Report.

Current Status: Sustain

Under the Certified Public Accountants Act of 2009 (the Act), both the Federation of CPA Associations of Chinese Taiwan (FCPAACT) and the Financial Supervisory Commission (FSC) are responsible for establishing an investigative and disciplinary (I&D) system for Certified Public Accountants (CPAs) and CPA firms. The FCPAACT communicates the results of its I&D proceedings to the FSC for sanctioning and publication on the FSC’s website.

The FCPAACT states that it maintains a consistent evaluation and review process of its I&D process to ensure that it operates effectively. As of May 2024, the following gaps remain: timeframe targets for disposal of all cases; ensuring that the public is made aware of results of investigations; a process for an independent review of complaints where there is no follow up; and liaising with external bodies on possible serious violations that have occurred. The FCPAACT reports that depending on the individual circumstances of each case, a timeframe is only set once the case has been scheduled to be heard. Meanwhile, regarding public interest considerations, the FCPAACT must collaborate with the FSC to determine the type of information that is made public on the FSC website.

The FCPAACT indicates it publishes guidance and conducts training seminars to raise awareness of I&D procedures to members and the public, including the ability to appeal. These seminars also analyze previous disciplinary cases to further educate its members.

Effective and efficient I&D procedures that meet SMO 6 requirements are foundational to maintaining public trust and confidence in the profession. Using the results of its self-assessment against SMO 6 requirements, the FCPAACT is encouraged to continue working with the FSC to ensure that the resulting system incorporates international best practices in the area.

Current Status: Execute

Under the Securities and Exchange Act, the Financial Supervisory Commission (FSC) and the Accounting Research and Development Foundation (ARDF) are responsible for establishing national accounting standards in Chinese Taiwan.

The Act requires all public companies to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) as endorsed by the FSC, or with permission, IFRS.

The FCPAACT indicates it supports its members’ implementation of national accounting standards by conducting training on IFRS, covering the IFRS and Enterprise Accounting Standards recognized in the jurisdiction in its continuing professional development (CPD) courses, and participating in the IASB work program and other international meetings to exchange information on IFRS application. The FCPAACT also participates in the local standard-setting process by collaborating with the ARDF during the review of newly issued standards, including developing a Q&A on IFRS, and providing opinions on exposure drafts.

Current Status: Sustain