The Brunei Darussalam Institute of Certified Public Accountants (BICPA)

Although BICPA is not responsible for establishing a quality assurance (QA) system in Brunei, it has declared its intent to support the work of the Public Accountants Oversight Committee (PAOC)—the entity responsible for establishing and implementing a QA system. BICPA states it will provide the PAOC with all necessary and relevant feedback to ensure the successful establishment and implementation of the system. At this time, no QA system has been established in the jurisdiction. However, in January 2022, the PAOC did adopt ISQM 1, 2, and ISA 220 (revised) for application by all public accountants and accounting entities registered with PAOC.

Most of the actions planned by BICPA have been postponed pending the commencement of a QA review system by the PAOC. The original plan included drafting the procedures to ensure all public accountants are subject to peer review (at a minimum, all public accountants who perform audits of public interest entities and/or government-linked companies), and establishing an agreement with an independently appointed body to conduct Practice Monitoring Reviews on behalf of PAOC, among other activities.

Because there is a significant public interest regarding the quality in audits of financial statements, BICPA – within its capacity – is encouraged to proceed further in supporting the PAOC to establish a QA review system. This includes moving forward in drafting procedures to discuss with the PAOC, raising awareness of its members about the inspection process and purpose, and supporting members to implement the new quality management standards. The resulting QA review system, when established, should align with the SMO 1 benchmark. BICPA should continue to provide an update, when available, about the timeframe for this important initiative.

Current Status: Plan

There is no national qualification framework. The Brunei Darussalam Companies Act and the Accountants Order 2010 sets out a list of accountancy organizations—and consequently the educational requirements for the jurisdiction—whose members can be a public accountant and apply for BICPA membership: CPA Australia, the Association of Chartered Certified Accountants (ACCA), the Chartered Accountants of Australia and New Zealand, CPA Canada, the Institute of Chartered Accountants of England and Wales (ICAEW), the Institute of Chartered Accountants of Ireland, and the Institute of Chartered Accountants of Scotland (ICAS). Members of these foreign institutes are required to fulfill the initial professional development and continuing professional development (CPD) requirements of their respective institutes and then may apply to BICPA to practice as an auditor.

The BICPA Council approved a requirement that its members—individuals who received their qualifications from one of the eight recognized foreign professional accountancy organizations—comply with the IPD and CPD requirements of their respective mother institutes and have the relevant years of local experience as per the PAOC requirement.. BICPA communicates with these PAOs to confirm BICPA members are in compliance. The institute had also indicated plans to introduce a requirement for the applicants for public accountant licenses to comply with IES 5; however, no indication of progress in this initiative has been reported.

To support its members’ training, BICPA has an ongoing Memorandum of Understanding with the Association of Chartered Certified Accountants (ACCA) for CPD. BICPA has also been operating an Accountancy Academy called BICPAAcademy Sendirian Berhad to offer CPD locally for individuals who are members of the institute.

BICPA has also collaborated with the ASEAN Federation of Accountants for resource persons to conduct some of its CPD courses.

As all BICPA members qualify to practice through foreign PAOs, BICPA may consider ways to ensure that there is sufficient understanding of local legislation and market demands – either through specific CPD training that it offers and/or a local practical experience component. BICPA may also consider formally outlining its own CPD requirements for its membership in addition to the requirements of foreign PAOs. This would help align national education with the principles of the IES requirements.

Current Status: Consider

The Public Accountants Oversight Committee (PAOC) is responsible for setting auditing standards in Brunei Darussalam. In 2020, the PAOC announced the adoption of ISA and ISQC standards as issued by the IAASB. Subsequently, in 2022, the PAOC adopted the ISQM 1, 2, and ISA 220 (revised) standards.

To assist its members with the implementation of ISA, BICPA conducts regular training workshops that cover new IAASB pronouncements and the ISA Guide for Small and Medium Entities. It also disseminates information on ISA updates and participates in the international standard-setting by providing comments on the IAASB exposure drafts.

Given that adoption of ISA and new quality management standards is effective – a significant recent accomplishment for the jurisdiction – the implementation support that BICPA provides members is equally important. Further examples of its implementation support would be beneficial to report in its SMO Action Plan.

Current Status: Execute

Under the Accountants Order of 2010, the Public Accountants Oversight Committee (PAOC) is responsible for establishing ethical requirements for accountants in Brunei. It appears that the PAOC has adopted the 2016 IESBA Code of Ethics for all accountants in the jurisdiction with effect from January 1, 2017. All public accountants must declare annually their adherence to the IESBA Code of Ethics.

Prior to 2017, BICPA reports that is has adopted the most recent IESBA Code of Ethics to be applied by its members and also required its members to comply with their foreign, qualifying PAO’s Code of Ethics – all of which adopt the latest International Code of Ethics. BICPA also advocates for the PAOC to adopt the latest IESBA Code and ensures that its members are informed of the most up-to-date international ethical standards.

If BICPA is authorized, it should continue to establish ethical requirements for its membership and continue its adoption of the latest International Code issued by the IESBA. It is in the public interest and important to society that professional accountants are adhering to the latest ethical standards in their work. Therefore, if the PAOC has not updated its adoption of the IESBA Code since 2017, the BICPA is also encouraged to communicate the revisions that have been issued since then – there have been several new and revised requirements. Implementation support is also essential and BICPA should report on how it is supporting its members to apply the ethical requirements.

Current Status: Plan

The Accountant General’s Office of the Brunei Darussalam Government is responsible for setting public sector accounting standards. Information on the nature of the existing public-sector accounting standards and extent/alignment and/or a timeframe for the adoption of IPSAS have not been provided.

Given BICPA’s capacity, mandate, membership composition, and the legal and regulatory environment, the public sector is not a primary focus of BICPA’s activities.

BICPA does report it promotes the adoption of IPSAS to the Accountant General’s Office through its members who are representatives in the Accountant General and Auditor General’s offices. BICPA also states that it endeavors to support the public sector by reviewing accounts for alignment with IPSAS as well as providing training courses for public sector employees.

Information and clarity on the currently applicable public sector standards (e.g., reporting basis and standards) would be beneficial for a future stocktaking and roadmap exercise that might assist the jurisdiction to adopt IPSAS.

Current Status: Sustain

While practicing members of BICPA are subject to the investigative and disciplinary (I&D) procedures that are to be established by the Public Accountants Oversight Committee (PAOC), BICPA has the responsibility under its Constitution to establish an I&D system for non-practicing members. Complaints are referred to the Investigation Committee of BICPA by the secretary, which in turn decides whether to refer the case to the Disciplinary Committee.

In 2014, BICPA reported that a task force was to review the requirements of SMO 6, produce a comparison with BICPA’s existing system, and develop recommendations on how BICPA could more fully align its investigatory and disciplinary system with the global best practices. In addition, the plan included disseminating information about the complaints process on the BICPA’s website. However, due to resource constraints, the implementation of the plan has been postponed.

In 2016, BICPA was discussing with other members of the ASEAN Federation of Accountants ways to raise awareness of members of the I&D procedures. It is however unclear if progress has been made on this initiative.

Enforcement mechanisms are an important component of enhancing public trust and confidence in the profession – if misconduct or non-compliance with professional standards is identified, there must be proportionate action taken. The SMO 6 benchmark outlines the best practices for an effective PAO’s I&D system. There appears to be no I&D system operational in Brunei which is not in the public interest. It should be one of the priorities of the BICPA to pursue its plans to evaluate how its I&D system can better meet the SMO 6 requirements and can be effectively utilized when/if complaints arise. Similarly, it should also be a priority of BICPA to communicate with the PAOC about its enforcement mechanism – e.g., if it is operational, the results of any investigations or disciplinary actions, and if it aligns with SMO 6 best practices as relevant. BICPA’s plans and actions should be reported in its SMO Action Plan and as part of its strategic plans.

Current Status: Plan

The Brunei Darussalam Accounting Standards Committee (BDASC) is responsible for establishing corporate accounting standards to be implemented in the jurisdiction. Public interest entities in the jurisdiction, such as banks, financial institutions, insurance and takaful companies are required to use IFRS. Non-Public Interest Entities (non-PIEs) are required to apply the Brunei Darussalam Accounting Framework and Standards (BDAS) for non-PIEs.

BICPA states that it is cooperates closely with the BDASC. BICPA states that it supports members with the implementation of IFRS by holding regular training in collaboration with the BDASC.

Lastly, BICPA reports that it is contributing to the international standard-setting process through its participation in the BDASC consultations.

Given that adoption of IFRS for PIEs is effective, implementation support that BICPA provides members is important. Further examples of its implementation support would be beneficial to report in its SMO Action Plan. BICPA may also consider training on BDAS for non-PIEs to support members that likely work with smaller companies.

Current Status: Review & Improve