Cayman Islands Institute of Professional Accountants

CIIPA is empowered by the Accountants Act of 2020 and Accountants (Quality Assurance) Regulations of 2016 to enforce its own quality assurance review system (QARS), established in line with SMO 1 requirements, for all audits. CIIPA successfully promoted the legislative approval of its Accountants (Quality Assurance) Regulations to specify the powers of the QARS and the adoption of ISA and US GAAS as the applicable auditing standards. ISQM 1 and ISQM 2 are both adopted, and CIIPA has been proactive in implementing these standards.

Additionally, in 2016, CIIPA and the Auditors Oversight Authority (AOA)—the national authority responsible for supervising auditors and firms of listed companies—developed a Memorandum of Understanding (MoU) to clarify the role of CIIPA and the AOA in this area. The MoU stipulates that CIIPA can continue carrying out QA reviews for all audits provided that there is an information exchange in the scheduling of visits and for firms that are AOA-registered. The MoU was executed in February 2017 and is now effective with the goal of permitting for more cooperation. In the event of deficiencies, CIIPA would delay undertaking an investigation if the AOA is already or planning to investigate the case. The institute would subsequently determine its appropriate next steps.

Furthermore, CIIPA engages with the Cayman Islands Monetary Authority (CIMA) for more cooperation regarding QA reviews and the licensing process to ensure that all public practice firms are licensed and subject to reviews.

Aside from proactively engaging with the AOA and CIMA, CIIPA has also been enhancing its own QA review system. CIIPA’s first QA reviews commenced in July 2013 with the assistance of the Institute of Chartered Accountants in England and Wales (ICAEW), the second in 2017, and the third in 2020. ICAEW carries out the QA review visits and then issues detailed reports to CIIPA in order to assist firms in identifying and correcting deficiencies in the quality of their audit work. CIIPA will continue to publish an annual public report summarizing results of QARS.

Current Status: Sustain

As the majority of CIIPA’s members hold foreign qualifications, CIIPA itself does not set initial professional development requirements but rather is responsible for ensuring its members comply with IES through a due diligence process of verifying and thereby enforcing the initial professional development (IPD) requirements of recognized Overseas Professional Accountancy Institute (OPAIs) prior to admission in CIIPA and implementing an application process to obtain a license to engage in public practice. CIIPA states that it conducted an analysis of OPAI’s compliance with IES requirements in 2012–2014 and that it has policies in place to annually review its registration and licensing procedures.

In addition, continuing professional development (CPD) requirements are defined in its Accountants (Application for Membership) Regulations. These CPD requirements for Practitioner Members comply with 2019 revised IES7 and IES8. The CPD requirement for Regular Members complies with 2019 revised IES 7, and apply to members whose OPAI does not have CPD requirements in compliance with IES7 or which does not apply those requirements to its members. CIIPA notes that it monitors members’ fulfillment of the requirements in two ways: annual declaration of compliance on renewal and two percent of members are sampled annually. Practitioner Members are subject to CPD monitoring reviews every five years.

CIIPA indicates that it offers an array of CPD opportunities and has also specified other training providers that members may use to fulfill their CPD requirements. Its CPD offerings are publicly available for review on its website as well as materials from particular courses. CIIPA also obtained National Association of State Boards of Accountancy (NASBA)-approval as a training provider so that its US members may apply attendance at CIIPA trainings toward their CPD requirements. Preparations are underway for an international conference in partnership with AICPA and all sessions will be NASBA accredited in Q4 of 2022.

CIIPA issued a Helpsheet on competence and capability for Licensing to reflect the revised IES 8 and issued a Helpsheet-Applying for and Renewing a License to provide further guidance on the policy. In 2015, CIIPA has developed its own Cayman business environment training course for all new members. In 2021, the course was revised and renamed ‘Cayman Business Law’. Completion of this course is a condition of registration and CIIPA plans to offer this course online.

CIIPA established a Joint Examination Scheme (JES) with the Association of Chartered Certified Accountants (ACCA). This partnership, formalized in June 2024, enables students in the Cayman Islands to register with both CIIPA and ACCA, allowing them to work towards full membership with both organizations simultaneously. The JES aims to build additional professional accountant capacity within the Cayman Islands to support the financial services industry and the economy.

Current Status: Sustain

Accountants Act of 2020 and Accountants (Quality Assurance) Regulations prescribe that audits must be conducted in accordance with ISA, US GAAS or a standard assessed as equivalent with those by the Cayman Islands Institute of Professional Accountants or the IAASB.

CIIPA states that it has been committed to promoting the adoption of ISA as the applicable standards in audits of financial statements since 2013 and supporting implementation when its members do apply the standards.

As part of promoting the adoption of ISA and engaging with relevant stakeholders, since 2012, CIIPA has organized quarterly meetings with the Cayman Islands Monetary Authority (CIMA) to discuss options to formalize the use of ISA.

In 2016, the Accountants (Quality Assurance) Regulations were approved due to CIIPA’s active involvement and engagement with government authorities. The new Regulations prescribe ISA and US GAAS as the auditing standards to be applied. There is an option to assess other standards as equivalent to ISA and GAAS and allow those to be used. CIIPA indicates that there is an assessment underway to ascertain which other standards firms may choose to use and those standards will be assessed and any considered equivalent will be published on July 1, 2017 for use from December 15, 2017. At the time of this assessment, CIIPA reports that no firms have formally indicated they seek to use other standards.

In regards to its members, CIIPA issued a Policy on the Use of ISA in 2013 which recommended the application of ISA and IAASB pronouncements by its members.

Additionally, to support its members, CIIPA states that it organizes annual continuing professional development (CPD) trainings on the standards as well as IAASB and GAAS pronouncements and updates. The institute also continuously updates its website to provide links to IAASB training resources and pronouncements. In line with this, it has posted information on the new auditor reporting standards and encouraged members to review the IAASB’s toolkit and summary of changes.

Lastly, in 2010, CIIPA established its Policy on Responding to Legislative and Policy Consultations to provide for contributions to the IAASB exposure drafts and other public consultations. There are currently two sub committees who review pronouncements: the Public Practice and a new Consultative Committee. The institute provided commentary with regard to the IAASB Overview-Invitation to Comment-Enhancing Audit Quality.

As deemed relevant and viable, CIIPA is encouraged to continue promoting and supporting the full adoption of ISA for all mandatory audits in the jurisdiction and note in its SMO Action Plan the results of its meetings with CIMA. Since the last SMO Action Plan update, the 2023-2024 Handbook is now effective.

Current Status: Sustain

CIIPA is responsible for setting ethical requirements for its members, which include Practitioner and Regular Members, and its new Accountants (Quality Assurance) Regulations of 2016 prescribe adherence to the most current version of the IESBA Code of Ethics. Since 2019, CIIPA’s Ethics Committee is responsible for establishing and monitoring the ethical requirements.

All members are required to confirm their compliance with the latest IESBA Code when first applying for CIIPA membership and during the annual renewal process. With the amendment to the IESBA Code in relation to the definition of public interest entity, CIIPA plans to issue its own Code of Ethics which will be predominantly based on the IESBA Code of Ethics with minimal adaptations as necessary for the unique features of the Cayman Islands.

To support its members with adherence to the IESBA Code, CIIPA has made the IAESB’s Ethics Education Toolkit, other training resources, and a link to the IESBA Code available to its members in combination with regular ethics trainings. Ethics training is continuously offered to members. For example, CIIPA partnered with the CFA Society of the Cayman Islands to host two ethics challenges for teams and individual members. Additionally, links to IESBA support material such as videos, fact sheets, and publications are included in member newsletters as well as on the CIIPA website. During CIIPA’s 2021 Anti-Money Laundering and Fraud training, IESBA Deputy Director, Diane Jules, presented a section on the Code with a focus on NOCLAR.

Moreover, the institute has had plans to draft a proposal to establish a confidential counseling service or contract a third-party provider that could provide members with advice when dealing with ethical issues. CIIPA has conducted tentative research on overseas services that would be the most efficient for the institute to utilize and submitted proposals in 2022.

Finally, CIIPA states that it participants in the international standard-setting process by submitting comments to exposure drafts issued by the IESBA.

Current Status: Sustain

CIIPA does not have responsibility for setting public sector accounting standards, which are consistent with generally accepted accounting practice (GAAP) as required by the Public Management and Finance Law (2013 Revision). The Law defines GAAP as IPSAS or, where is no guidance provided by those standards, the IFRS as issued by the IASB. The institute does indicate that it supports the implementation of the standards by providing advice to the Cayman Islands Government (CIG) and technical support to members.

To further enhance support for IPSAS, CIIPA has established an internal Public Sector Committee that will advise and support the CIG and will review the effectiveness of its communications and relations with public sector accountants on a semi-annual basis.

As part of assisting its members with implementation, CIIPA states that since November 2013, CIIPA collaborates with the CIG to offer its annual Professional Development Week which consists of three days of training and professional development for persons in the public and private sectors. The program brings in leading international and Cayman experts to cover a range of topics from corporate and public sector accounting to ethics, and corporate governance. 

Additionally, CIIPA notes that it includes sections in its member newsletter and website that cover public sector accounting issues.

If deemed relevant and feasible, CIIPA is encouraged to participate in the international standard-setting process by submitting comments to exposure draft issued by the IPSASB.

Current Status: Sustain

CIIPA is responsible for establishing an investigative and disciplinary (I&D) system for members that breach professional standards. In 2012, CIIPA adopted its I&D policies and in 2016, the Accountants (Disciplinary) Regulations of 2016 were successfully enacted by law. CIIPA most recently updated its I&D policy in 2019. The institute had one case in 2014, 2015, and 2021. In 2020, seven complaints were received, and determined to be frivolous and not within the scope of the complaints regime.

CIIPA has incorporated all of the SMO 6 requirements into its I&D system and reports that it is working to promote awareness of its complaints process. CIIPA reviews and reconsiders its communication methods, such as its website and articles in local media, to relevant stakeholders regarding the I&D system on a quarterly basis. The institute indicates that its I&D information is included on its website which is updated regularly. Additionally, CIIPA states that it issued a Helpsheet which provides information on submitting a complaint and the I&D process.

Lastly, CIIPA states that it had been reviewing whether “gross professional negligence” is a legally recognized term in jurisdiction. Amendments to the 2016 Accountants (Disciplinary) Regulations did not specify this; however, CIIPA has identified this as item where there is a need to form a consultative committee to consider the issue.

Current Status: Sustain

Applicable international accounting standards in the Cayman Islands are not stipulated in law and often depend on the parent company due to the international nature of business in the Cayman Islands. In practice, the majority of financial statements are prepared under U.S. GAAP or IFRS. Accordingly, CIIPA indicates that it is committed to promoting adoption of IFRS and supporting its members that do apply the standards.

As part of its commitment to promoting the IFRS, CIIPA reports that holds meetings with Cayman Islands Monetary Authority and it annually presents a Discussion Paper to its Council on the need to promote convergence with IFRS through meetings and other communications. However, no specific activities to this effect have been reported. In addition, CIIPA also raises the issue that there is a need to address gaps in legislation regarding accounting standards for small- and medium-sized entities.

To assist with implementation amongst its members, it holds a recurring one-day course throughout the year covering the major updates and differences between IFRS and US GAAP in order to assist members understanding the updated accounting requirements and their impact upon the financial statements presentation. The institute also notes that there is a section in its member newsletter and website dedicated to IFRS-related topics and raising awareness of IASB pronouncements. In addition, CIIPA is in the process of utilizing its Quality Assurance Review System to gather information on the accounting standards utilized with a future objective to be more informed when promoting IFRS.

Lastly, CIIPA mentions that it submitted comments to an IASB survey in 2013 and participates in the international standard-setting process by submitting comments.

As deemed relevant and viable, CIIPA is encouraged to continue promoting and supporting the full adoption of IFRS and IFRS for SMEs for application in the jurisdiction.

Current Status: Review & Improve