Union of Accountants and Auditors

With no direct responsibility for the establishment or implementation of a quality assurance (QA) system, the UAA reports that it has offered its support to the State Service for Regulating and Supervising of the Financial Market (SSRSFM) in establishing such a system and supports its members who provide auditing services with implementation of quality control standards.

As of the date of the assessment, SSRSFM has a dedicated department, which conducts reviews according to a formal questionnaire and process. As of 2020, however, a moratorium on conducting the reviews has been imposed pending the adoption of a new law on auditing activities. The UAA indicates that it has initiated discussions with the SSRSFM about the potential involvement of professional accountancy organizations in the QA process and plans to continue those as the SSRSFM is working to establish QA arrangements.

To support its members with the application of quality control standards, the UAA has included ISQC1—which has been adopted in the jurisdiction but requires implementation support—in the annual continuing professional development (CPD) program.

UAA is also involved in the regional cooperation of professional accountancy organizations (PAOs) on the issues related to opening up of audit markets as part of the Eurasian Economic Union integration. The Agreement on Audit Activities within the Framework of the Eurasian Economic Union contains provisions related to quality control and quality assurance of audits.

The UAA has demonstrated that, within the scope of its authority, it is committed to meet the SMO 1 obligations. While recognizing that regulation of auditors is currently the responsibility of the SSRSFM, the UAA is encouraged to further raise the regulator’s awareness of the need to establish the QA system in accordance with international best practices, including those formulated in SMO 1, and to establish translation processes that ensure availability of the most recent quality control standards in the jurisdiction. It is positive that UAA is offering its expertise to the regulator and, given that the regulator is considering future involvement of PAOs in the QA process, further develop its own technical capacity around quality control and quality assurance, such as sourcing and training reviewers. The UAA should also consider ways to further enhance support to its members in the implementation of quality control standards, such as providing checklist and/or questionnaires to prepare members. It will be important to focus on the introduction of the new quality management standards, and follow and disseminate relevant information to its members, regulators, and other stakeholders. Educational programming, both initial and continuing, needs to be updated to incorporate the new international requirements to prepare for the effective date of the new QM standards in 2022.

Current Status: Execute

The UAA is not involved in establishing educational requirements for the profession, which are set in law and are implemented by the government and universities, and which, as of the date of the assessment, are not fully aligned with IES. UAA does participate in the working groups of the Ministry of Science and Education that establishes standards for the universities to comply with. It also collaborates with the State Service for Regulation and Supervision of the Financial Market of the Kyrgyz Republic (SSRSFM), which enforces the initial professional development (IPD) and continuing professional development (CPD) requirements for auditors.

Since late 1990s, the UAA has offered a two-tiered voluntary certification scheme for obtaining the Certified Accounting Practitioner (CAP) and Certified International Professional Accountant (CIPA) designations. However, the materials were not kept fully up to date with the developments in the international standard-setting and the revisions of IES.

A major development has been preparation of a syllabus for a new three-level qualification for professional accountants, along with learning materials, in the Russian language that is fully in line with the 2019 IES. The syllabus and the materials were developed as part of the Strengthening the Capacity of the Accountancy Profession in the Kyrgyz Republic (2016-2020) project implemented by the Institute of Chartered Accountants of England and Wales (ICAEW) under the UK Department for International Development (DFID)-funded IFAC Professional Accountancy Organization Capacity Building Program.

The qualification will be administered by the UAA, with the expectation that local universities would incorporate the first level curriculum into their undergraduate degree program, leading to exemptions for graduating students. The third level would be used for audit certification and exams to be administered by the SSRSFM.

UAA has actively participated in the development of the materials by providing expert advice and quality review. UAA reports that it is working with SSRSFM to have the new qualification recognized as sufficient for take the auditor certification exam. In 2020-21, the Union reports to be working on the necessary governance arrangements and infrastructure required for effective administering of the qualification that will commence in July 2021, a delay from 2020 caused by the pandemic.

In 2021, the UAA also reports plans to review its CPD policy and programming to bring it in line with IES 7.

The UAA has demonstrated that, within the scope of its authority, it is planning to meet the SMO 2 obligations. The UAA is encouraged to continue raising awareness of and assist all stakeholders with aligning national accountancy education programming with IES, in particular ensuring that the new Law on Auditing, the new Law on Accounting, and the educational standards developed by the Ministry of Science and Education of the Kyrgyz Republic are in line with international best practices formulated in IES. UAA is also encouraged to closely work with the universities and assist them with incorporating the requirements of the new syllabus into their programming. The IES Checklist and the Accountancy Education E-Tool developed by IFAC may be used to monitor incorporation of the IES requirements into national educational system and to consider available implementation support materials. Technical capacity of UAA to administer the qualification effectively and efficiently will also need to be strengthened, possibly with the assistance of donor community. Finally, the UAA is encouraged to monitor international developments as they relate to evolving competencies and skills required of professional accountants and to disseminate them to its membership, regulators, universities, and the public.

Current Status: Plan

With ISA adopted by law, the UAA reports that it is generally committed to assist the State Service for Regulating and Supervising of the Financial Market (SSRSFM) in the process of adoption and implementation of ISA leveraging their expertise. UAA participated in the public consultations of the new Law on Auditing and offered to be involved in the translation review of ISA.

Since early 2000, UAA has been offering a voluntary certification of Certified Accounting Practitioner or Certified International Professional Accountant designation. (CAP/CIPA) certification. Although UAA indicates that the syllabus has been updated since its initial development by USAID in 1990s, it remains to be established whether the latest international pronouncements have been incorporated.

A major change, however, was introduced as part of implementation of the project Strengthening the Capacity of the Accountancy Profession in the Kyrgyz Republic, implemented by the Institute of Chartered Accountants of England and Wales (ICAEW) under the UK Department for International Development (DFID)-funded IFAC Professional Accountancy Organization Capacity Building Program. New syllabus and the learning materials were developed that are compliant with the IES in effect as of 2021 and incorporate the latest international standards. The new qualification is expected to be launched in 2021. The UAA Strategy for the period of 2020-2023 was also developed as part of the project that envisions, inter alia, more focus on ISA implementation support.

UAA reports that it currently includes ISA in its CPD programming and informs its members about new and revised standards. However, it is not clear whether the latest changes in ISA have been incorporated in the programming and how information is disseminated.

The UAA reports that it continues to cooperate with other Russian-speaking bodies to exchange experiences regarding implementation of ISA and to jointly contribute to international standard-setting. In 2020, UAA participated in the regional discussion of ED on Proposed International Standard on Auditing 600 (Revised), with consolidated comments subsequently submitted to the IAASB.

The UAA has demonstrated that, within the scope of its authority, it is committed to meet the SMO 3 obligations. Given the challenges with the implementation of ISA in the jurisdiction and the proposed mandatory membership of auditors in a PAO, staff reiterate its previous recommendation to consider enhancing activities to support its members who provide auditing services with the implementation of ISA and to update its educational programming on an ongoing basis to ensure incorporation of the latest international standards. Disseminating information on the international and regional developments through different communications means to its membership, universities, regulators, and the public are also strongly recommended. The UAA is encouraged to consider translating and/or disseminating implementation support materials, such as for example The ISA Guide for SMEs. The UAA is also encouraged to work with the SSRSFM and other stakeholders to raise their awareness about the need to establish ongoing processes to translate ISA into the Kyrgyz language so that the latest international pronouncements are required for application in the jurisdiction in a timely manner and, if deemed feasible, to consider contributing to the translation process. UAA is also encouraged to continue working with SSRSFM, the World Bank, and other stakeholders to ensure that the revised legislation is appropriate for the Kyrgyz accountancy profession and incorporates international best practices. Lastly, the IAASB has issued an exposure draft of the proposed separate standard for audits of Less Complex Entities. UAA is encouraged to participate in the public consultation process for this landmark new draft standard.

Current Status: Execute

Although not required by law, since 2008, the UAA has required its members to follow the IESBA Code of Ethics, the 2010 version of which was adopted by UAA in 2014. In 2020, UAA reported that it plans to adopt the latest Russian language IESBA Code in 2022, once the translation is available.

UAA has promoted to the stakeholders the need to adopt the IESBA Code through law and actively participates in public consultations on the proposed revisions to the Law on Auditing—the draft of which now contains a clause on the mandatory application of the IESBA Code as translated in the Kyrgyz language by all auditors.

The UAA offers a voluntary CAP/CIPA certification for accountants as well as continuing professional development (CPD) programming for the accountancy professionals. It reports that since 2014 it has included ethics-related topics in CPD; however, no information on whether its current certification program includes ethical requirements and, if so, how often it is updated to reflect developments in international standard-setting is available.

As part of the project Strengthening the Capacity of the Accountancy Profession in the Kyrgyz Republic implemented by the Institute of Chartered Accountants of England and Wales (ICAEW) under the UK Department for International Development (DFID)-funded IFAC Professional Accountancy Organization Capacity Building Program, a new syllabus, learning materials, and question banks have been developed. Ethical matters underpin all modules of the qualification.

The new qualification is expected to be launched by UAA in 2021. The UAA Strategy for the period of 2020-2023 was also developed as part of the project that envisions, inter alia, more focus on enforcing ethical requirements and supporting members with compliance.

The UAA has demonstrated that, within the scope of its authority, it is planning to meet the SMO 4 obligations. UAA’s efforts to promote the adoption of the IESBA Code for auditors are commendable, and it is recommended that UAA continue raising awareness of and educating stakeholders about the need to subject all professional accountants in the jurisdiction, not only auditors, to ethical requirements.

As far as its membership is concerned, the UAA is encouraged to ensure that adherence to the Code of Ethics is explicitly required in its membership regulations and is being monitored, and to consider establishing processes to adopt the latest IESBA Code for its members on an ongoing basis, if not adopted at the jurisdictional level. Considering that the 2021 Handbook of the International Code of Ethics for Professional Accountants is currently in effect, UAA is encouraged to consider ways to raise awareness of and educate its members as well as the wider profession about its requirements. UAA should also consider establishing processes to monitor compliance with the Code and to link those with its investigation and discipline practices, which are yet to be established. Staff reiterate its previous recommendation to enhance HYPERLINK "https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/paying-professional-ethics-more-lip-service" activities to support its members with the implementation of the Code that may include holding seminars and focused trainings, establishing a hotline for confidential questions, and disseminating information on the developments in the area through different communications means, among other activities.

Current Status: Plan

The UAA does not have legal responsibility for setting public sector accounting standards, which falls withing the authority of the Ministry of Finance. IPSAS have not been adopted in the jurisdiction, and a strategy to adopt IPSAS does not appear to have been approved by the Government.

UAA reports that in 2015-2016 it was involved in the development of an implementation strategy for IPSAS adoption, the revision of the Unified Chart of Accounts for public sector, developing guidance on the application of accounting policies for the public sector, and continues to monitor developments to identify opportunities to promote adoption of IPSAS and assist the Government.

In its SMO Action Plan, UAA indicates that by September 2022 it plans to develop an IPSAS training module for public sector accountants, and by December 2023 introduce training modules on IPSAS.

The UAA has demonstrated that, within the scope of its authority, it is committed to meet the SMO 5 obligations. UAA is encouraged to clarify whether it has public sector accountants as its members and, if so, whether it provides support to this type of membership through training and other educational activities. In developing its public sector accounting module, UAA could consider Train the Trainer: Introduction to IPSAS, a package of training materials developed by IFAC and other IPSASB support materials. The UAA is also encouraged to further consider opportunities in the area of public sector accounting and, if deemed feasible, develop a plan with a defined timeline and specific activities in the area. Disseminating information on new and revised IPSASB pronouncements and developments in the public sector accounting to its members and other stakeholders is also recommended. Lastly, the 2021 Handbook of International Public Sector Accounting Pronouncements is now available and in effect. UAA may consider providing relevant stakeholders with the Handbook to encourage adoption

Current Status: Execute

As of the date of the assessment, there is no functioning I&D system at the jurisdiction level for either auditors or accountants. The State Service for Regulating and Supervising the Financial Market of the Kyrgyz Republic (SSRSFM) is responsible for investigative and disciplinary (I&D) procedures of auditors but as of the date of the assessment has not established an operational I&D system due to technical, financial, and legal reasons.

UAA, which unites accountants and auditors on a voluntary basis, reports to have established an I&D system for its members in 2009. Although plans have been reported since then to bring the system in line with SMO 6 by June 2016 and later by February 2017, as of the date of the assessment the system does not appear to incorporate the requirements of SMO 6 and be operational.

UAA indicates in its SMO Action Plan that in November 2017 it presented to the SSRSFM the requirements of SMO 6 but further collaboration with SSRSFM on I&D matters has been postponed as the Law on Auditing is being revised to address, inter alia, I&D of auditors. The draft law envisions mandatory membership of auditors in a professional accountancy organization (PAO), which will be required to have specific provisions related to I&D in its Charter as well as a designated I&D committee. The PAO will be obliged to report such violations to the regulator, which will ultimately be responsible for disciplining and imposing sanctions.

As of the date of the assessment, UAA reports that, following the merger with the Chamber of Accountants and Auditors in 2019, regulations on I&D are being developed to become effective in 2021.

Effective I&D arrangements that meet the SMO 6 benchmark are foundational to maintaining public trust and confidence in the profession. The UAA is strongly advised to make progress in meeting the SMO 6 obligations. Staff reiterate its recommendation that, as a matter of priority, UAA develop processes, procedures, and governance structures to establish and implement and I&D system for its members that is aligned with SMO 6 requirements. Seeking the assistance of donor community, learning experiences of other PAOs as well as reviewing available resources such as the Investigation & Discipline Systems Guide developed by the Confederation of Asian & Pacific Accountants are recommended. As the Law on Auditing and the Law on Accounting are being revised, UAA is encouraged to cooperate with the regulators to raise their awareness about international best practices for I&D that are formulated in SMO 6 to ensure that all professional accountants in the jurisdiction are subject to effective and efficient I&D mechanisms.

Current Status: Consider

IFRS were adopted in 2003 in Kyrgyz Republic. The UAA, which has no direct authority for the adoption of accounting standards, assisted the State Service for Regulating and Supervising of the Financial Market (SSRSFM) in the process of adopting and implementing IFRS by providing expert opinion in public consultations and has since then supported accountants with application of IFRS through educational activities.

In 2009, the UAA participated in the World Bank project to develop A Framework of Accounting and Audit Development in Kyrgyz Republic and provided input to the revisions of 2013 Accounting Law and other regulations. In 2020, UAA participated in the public consultations on the new Law on Accounting, which is expected to enhance implementation of the standards in the jurisdiction.

UAA was involved in the translation of the Russian version of IFRS in early 2000, and in 2019-2020, UAA provided its expert opinion in the translation of IFRS for SMEs into the Kyrgyz language carried out as part of the project Strengthening the Capacity of the Accountancy Profession in the Kyrgyz Republic (2016-2020) implemented by the Institute of Chartered Accountants of England and Wales (ICAEW) under the UK Department for International Development (DFID)-funded IFAC Professional Accountancy Organization Capacity Building Program.

In terms of supporting the profession with the implementation of IFRS, since early 2000s, UAA has been offering training courses on international standards and a voluntary certification of Certified Accounting Practitioner or Certified International Professional Accountant designation (CAP/CIPA). Although UAA indicates that the CAP/CIPA syllabus has been updated since its initial development by USAID, it remains to be established whether the latest international pronouncements have been incorporated.

A major change, however, has been a development by the IFAC/DFID/ICAEW project of a new syllabus, learning materials, and question banks that are in line with the IES in effect as of 2021 and incorporate the latest international standards. The new qualification is expected to be launched in 2021. The UAA Strategy for the period of 2020-2023 was also developed as part of the project that envisions, inter alia, more focus on IFRS implementation support.

UAA reports that it also includes IFRS in its CPD programming, informs its members about new and revised standards, and offers consulting services on IFRS implementation. However, it is not clear whether the latest changes in IFRS have been incorporated in the CPD programming and how information is disseminated.

The UAA has demonstrated that, within the scope of its authority, it is committed to meet the SMO 7 obligations. Given the challenges with the implementation of IFRS and IFRS for SMEs in the jurisdiction, staff reiterate its previous recommendation to consider enhancing activities to support its members with the implementation of IFRSs and IFRS for SMEs and to update its educational programming on an ongoing basis to ensure incorporation of the latest IFRSs and IFRS for SMEs. UAA may also consider adding an IFRS specialization/certification to its programming. Disseminating information on the international and regional developments through different communications means to its membership, universities, regulators, and the public are also strongly recommended. The UAA is also encouraged to work with the SSRSFM and other stakeholders to raise their awareness about the need to establish ongoing processes to translate IFRS into the Kyrgyz language so that the latest international pronouncements are required for application in the jurisdiction in a timely manner and, if deemed feasible, to consider contributing to the translation process. UAA is also encouraged to continue working with SSRSFM, the World Bank, and other stakeholders to ensure that the revised legislation is appropriate for the Kyrgyz accountancy profession and incorporates international best practices.

Current Status: Execute