Iraqi Union of Accountants and Auditors

In accordance with the Law of the Iraqi Union of Accountants and Auditors No. 185, 1969 (as amended in 1973), IUAA is responsible for establishing and implementing a quality assurance (QA) review system. IUAA established an independent Quality Assurance & Inspection Committee (QAIC) in 2003 to operate a cycle-based QA review system. Despite being formally independent, the QAIC’s development and functions are supported by the IUAA Board. IUAA reports that it implements a peer review process, with approximately 200 firms reviewed annually.

The IUAA completed a self-assessment and reports that the QA review system is in line with the SMO 1 requirements.

However, as of November 2024, the Iraqi Board of Accounting and Auditing Standards (IBAAS) has not officially adopted the International Standards on Quality Management (ISQM) 1 and 2, or the revised International Standard on Auditing (ISA) 220. IBAAS continues to develop and implement national accounting and auditing standards tailored to Iraq's specific economic and regulatory environment. While these national standards may incorporate elements of international best practices, they do not fully align with the ISQM and ISA as issued by the IAASB. Nevertheless, in 2023, IUAA communicated and coordinated with ARICPA and the Ministry of Higher Education to update training programming to ensure that its professionals are prepared for the application of the standards. IUAA holds workshops to raise awareness about SMO 1 requirements among auditors, and provides them with guidance material.

IUAA reports to continuously monitor and review the QA system to ensure ongoing alignment with SMO 1 requirements.

IUAA is encouraged to provide an update on the status of adoption of ISQM 1 and ISQM 2, as well as all new and revised ISA as issued by IAASB.

Current Status: Review & Improve

The Law of the Iraqi Union of Accountants and Auditors No. 185, 1969 (as amended in 1973) outlines basic requirements for professional accountants in Iraq. The Iraqi Union of Accountants and Auditors (IUAA), alongside other entities such as the Ministry of Higher Education’s Accounting Sector Committee and the Arab Institute of Certified Public Accountants (ARICPA), are responsible for adopting and implementing initial and continuing professional development requirements in the jurisdiction further. Specifically, IUAA reports to participate in the Accounting Sector Committee (ASC) to align university accountancy curricula with revised IES, working with Iraqi universities and the Ministry of Higher Education. IUAA collaborates with ARICPA to provide post-qualification education for professional accountants, including a five-year program with rigorous practical and theoretical requirements.

IUAA indicates that it has mandated 20–40 hours of CPD every three (3) years for auditors and will conduct a randomized sample audit to ensure compliance. Non-auditors are not required to fulfill any CPD requirements. Consequently, its CPD requirements require further alignment with IES, and it remains unclear if IUAA is executing plans to mandate CPD requirements for non-auditors.

To support its members with fulfilling CPD, IUAA develops and implements annual events & CPD calendar that offers a range of training activities on key topics such as audit and assurance, financial reporting, tax, ethics and integrity, and leadership. Courses are offered online and in-person to support its members continuing education. IUAA also publishes educational and examination requirements in its IUAA Quarterly Magazine to increase awareness and understanding of the entry requirements in the jurisdiction and support candidates’ preparation.

IUAA is encouraged to review and compare the existing education requirements in Iraq with the revised 2019 IES requirements (effective January 2021) for all professional accountants. The IES Checklist (available in Arabic) and the Accountancy Education E-Tool developed by IFAC may be used to conduct an assessment and to consider available implementation support materials. Specific actions to close gaps—such as CPD requirements—need to be developed and included in its SMO Action Plan.

Current Status: Execute

The Iraqi Board of Accounting and Auditing Standards (IBAAS) is responsible for developing and issuing auditing standards.

However, IUAA, which is a mandatory membership organization for all accountancy professionals in Iraq, requires its members to adhere to the most recent Arabic translations of ISA. As of the date of the assessment, this is the 2022 IAASB Handbook. This means that, in practice, many auditors in Iraq follow ISA as part of their professional obligations. However, the extent of ISA adoption may vary, and some entities might still adhere to national standards developed by the

Since 2013, IUAA has collaborated with ARICPA to secure permission for using Arabic translations of ISAs, following IFAC’s translation policy. IUAA also disseminates translated ISAs through publications like the Accountant Magazine, making them accessible to Iraqi auditors.

IUAA, through its Training & Continuous Professional Development Committee (TCPDC) and in partnership with the Iraqi Association of Certified Accountants (IACA), provides regular training on ISAs for its members. These programs also incorporate updated training on new technologies, such as auditing computerized data. IUAA also organizes technical conferences on audit standards and related topics with universities. This helps ensure that new and revised standards are included in the courses that candidates/students must take in pursuing their qualification.

Finally, the institute states that it reviews and submits comments to Exposure Drafts issued by the IAASB.

Current Status: Sustain

The Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969 (as amended in 1973) grants the Iraqi Union of Accountants and Auditors (IUAA) with the authority to set ethical requirements for professional accountants in Iraq.

IUAA reports that it revises its Code of Ethics on a regular basis to converge with the IESBA Code of Ethics. As of the date of this assessment, IUAA requires its members to adhere to the latest Arabic version of the Handbook available, which is the 2022 Handbook of the International Code of Ethics for Professional Accountants.

To support implementation of the IESBA Code of Ethics, IUAA has been incorporating requirements (including new and revised ones) of the Code into its continuing professional development program for auditors, including case studies. IUAA monitors the activities of the IESBA and has developed a system for communicating new developments and changes in national and international standards and other guidance to IUAA membership and the public through magazines, emails, and its website.

The 2024 Handbook is currently in effect but is not yet available in Arabic. Access to translations of international standards is an important implementation support tool. IUAA is encouraged to collaborate with stakeholders to establish an ongoing process for the translation and publication of the International Code of Ethics to reduce the time lag & ensure that the latest version is being properly applied.

Current Status: Review & Improve

The Ministry of Finance is responsible for setting public sector accounting standards. As of the date of the assessment, IUAA reports that self-financing public entities use Iraqi Unified Accounting System (IUAS) on an accrual-basis, whereas entities that are funded by government use the Governmental Accounting System (GAS) on a cash-basis. There are no reported plans to adopt IPSAS.

Although the public sector falls outside IUAA's direct scope, IUAA’s Association of Internal Auditors (AIA) focuses on raising awareness of IPSAS among IUAA members, especially for those working in public sector units. IUAA organizes workshops and training sessions on IPSAS implementation. It also raises awareness and promotes the adoption of accrual-basis IPSAS to the Ministry of Finance and Ministry of Planning.

IUAA publishes information on the developments occurring in the field of public sector accounting via its quarterly magazine, and reports to distribute the Arabic translation of the IPSASB Handbook (the 2022 Handbook is latest version available in Arabic as of the date of this assessment) to its members as well as the Ministry of Finance to increase awareness.

The IUAA is encouraged to continue its technical and advocacy support to the Ministry of Finance as part of enhancing public financial management in the jurisdiction. It may find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful in this regard.

Current Status: Sustain

IUAA has responsibility for the investigation and discipline (I&D) of its members, which are all professional accountants in Iraq, in accordance with Article 28 of the Law of Iraqi Union of Accountants and Auditors No. 185, 1969 (as amended in 1973). IUAA indicates that it established a Discipline Committee (DC) with the authority to monitor compliance with rules, regulations, and standards. Disciplinary decisions and sanctions are enforced by specialized courts, and in the case of serious crimes, by the Justice Council.

In 2019 (and again in 2024), IUAA completed a self-assessment and reports that the I&D system is in line with SMO 6 requirements. Since 2016, IUAA has been including information on the requirements and procedures of the I&D system in the continuing professional development programming for auditors. Non-auditors are also kept informed of the I&D processes through informational sessions and workshops that are accessible virtually. The institute also raises awareness of the system through the publication of cases and verdicts in its quarterly newsletter and provides members with guidance on how to initiate complaints through its website and monthly email announcements.

Lastly, IUAA regularly reviews its I&D system to ensure continued alignment with SMO 6.

Current Status: Sustain

The IFRS Foundation notes that the Iraqi Banking Law (2004) includes a general provision for applying "international accounting standards" within banking institutions (Article 42) but does not explicitly require the adoption of IFRS Standards as the sole basis for accounting. While the law does not specifically mandate IFRS, sub-section 1.c of Article 42 requires that the principles and methods of accounting used in financial statement preparation align with any special directives from the Central Bank of Iraq (CBI). In 2016, the CBI issued an instruction mandating that Iraqi banks use IFRS Standards as the designated "international accounting standards." This requirement was further reinforced in 2019 when the CBI mandated compliance with IFRS 9, and in March 2020, it provided additional guidance on IFRS 9 application. Additionally, in 2004, the Iraqi Company Law (Number 21, 1997, article 133) was amended to refer generally to "international accounting standards" for joint-stock and private companies, although IFRS Standards are not specifically cited. This ambiguity has led to uncertainty regarding the legal requirement to adopt IFRS Standards in Iraq. Consequently, many Iraqi companies continue to apply standards developed by the Iraqi Board of Accounting and Auditing Standards (IBAAS).

IFRS for Small and Medium-sized Enterprises (SMEs) are not required and there are no known plans for adoption. For SMEs that are not required to use the IFRS for SMEs Accounting Standard, they use National Accounting Standards as the accounting framework.

IUAA supports implementation efforts and trains its members on the application of the standards. Additionally, IUAA promotes the application and understanding of the standards by disseminating IFRS and IFRS for SMEs-related materials to universities in Iraq to encourage its incorporation in the accounting curricula. IUAA offers its members an IFRS specialization certification, which has been well-received by professionals since 2005. This 9-day (66 hour) course provides practical IFRS training for Certified Public Accountants, financial managers, and expert accountants.

IUAA delivers annual training programs on IFRS, including workshops tailored for accountants at the Ministry of Finance, university students, and SME accountants. This includes workshops specifically designed to address IFRS implementation challenges for SMEs.

In 2023, IUAA signed a Memorandum of Understanding (MoU) with ACCA to train Chartered Accountants in Iraq on IFRS. On January 3, 2024, complimentary training was provided for 120 members, and there are plans in place to train 1,000 members by the end of 2025.

IUAA also supports the translation of IFRS materials into Arabic and publishes relevant articles in The Accountant Magazine, increasing accessibility for Iraqi professionals.

Lastly, IUAA participates in the international standard-setting process by providing comments to exposure drafts.

IUAA is encouraged to continue engaging regulators and stakeholders to promote adopting and implementing IFRS and IFRS for SMEs as the applicable accounting standards in the jurisdiction. This would help bring reporting in line with international best practices and would likely benefit the SME financial reporting environment in the country.

Current Status: Sustain