Brunei

In Brunei Darussalam, financial reporting requirements are stipulated for public interest entities (PIEs).

Since January 1, 2014, International Financial Reporting Standards (IFRS) have been adopted by the Brunei Darussalam Accounting Standard Council (BDASC) in Brunei. Under the Accounting Standards Order 2010, PIEs such as banks, financial institutions, insurance companies and takaful companies are required to apply IFRS in the preparation of financial statements. Brunei does not have a stock exchange.

In October 2016, the BDASC issued an exposure draft on the Brunei Darussalam Accounting Framework and Standards (BDAS) for Non-Public Interest Entities (non-PIEs). The existing framework required non-PIEs to prepare financial statements in accordance to the Generally Accepted Accounting Principle in Brunei Darussalam (GAAP in Brunei Darussalam). The BDASC announced the adoption of the BDAS for non-PIEs with an effective date of January 1, 2018.

The Companies Act requires all PIEs to be audited; however, auditing standards in Brunei are not specified. In December 2009, the Brunei Darussalam Institute of Certified Public Accountants issued a recommendation to all its practicing members to adopt ISA in carrying out audit engagements and continues to recommend, but not to require, that its practicing members use ISA.

In accordance with the Accountants Order 2010, the Public Accountants Oversight Committee (PAOC) is responsible for regulating public accountants in Brunei Darussalam, under the oversight of the Ministry of Finance.

In Brunei, there is no national certification or qualification program. In order to qualify to practice accountancy, individuals must be a member of one of the following international professional accountancy organizations recognized by the Brunei Darussalam Companies Act and the Accountants Order 2010: CPA Australia, the Association of Chartered Certified Accountants (ACCA), the Institute of Chartered Accountants of Australia, the Institute of Chartered Accountants of Canada, the Institute of Chartered Accountants of England and Wales (ICAEW), the Institute of Chartered Accountants of Ireland, the Institute of Chartered Accountants of New Zealand, and the Institute of Chartered Accountants of Scotland (ICAS).

Members of these foreign institutes are required to fulfill initial professional development and continuing professional development (CPD) requirements of their respective institutes. In order to offer auditing services, Public Accountants must be a member of the Brunei Institute of Certified Public Accountants (BICPA) and receive a license from the Ministry of Finance’s Revenue Division. BICPA’s role is to provide advice and consultation to the PAOC. In accordance with its by-laws, BICPA is responsible for setting ethical requirements for its members and may investigate and discipline its non-practicing members.

Under the Accountants Order 2010, the PAOC is responsible to (i) keep and maintain a register of the public accountants, public accounting corporations, public accounting firms, public accounting limited liability partnerships and such other registers; (ii) consider and, as appropriate, grant or reject all applications for registrations of the above; (iii) inquire into any complaint or any information relating to any professional misconduct on the part of the above and if necessary institute disciplinary proceedings; (iv) conduct or arrange for the conduct of such examinations as it thinks necessary for the purposes of registering public accountants; (v) administer CPD programs for public accountants; and (vi) consult BICPA or such other entity as deemed fit. In addition, the PAOC has also established ethical requirements for all professional accountants in the jurisdiction and is also responsible for establishing quality assurance and investigative and disciplinary mechanisms.

There are no independent audit oversight arrangements in Brunei Darussalam.

In accordance with the Accountants Order 2010, the Public Accountants Oversight Committee (PAOC) is responsible for regulating public accountants in Brunei Darussalam, under the oversight of the Ministry of Finance. In order to offer auditing services, Public Accountants must be a member of the Brunei Institute of Certified Public Accountants (BICPA) and receive a license from the Ministry of Finance’s Revenue Division. BICPA’s role is to provide advice and consultation to the PAOC. In accordance with its by-laws, BICPA is responsible for setting ethical requirements for its members and may investigate and discipline its non-practicing members. Prior to renewing a Public Accountant’s license, the PAOC will request a declaration of the individual’s continuing professional development (CPD) hours.

Under the Accountants Order 2010, the PAOC is responsible to (i) keep and maintain a register of the public accountants, public accounting corporations, public accounting firms, public accounting limited liability partnerships and such other registers; (ii) consider and, as appropriate, grant or reject all applications for registrations of the above; (iii) inquire into any complaint or any information relating to any professional misconduct on the part of the above and if necessary institute disciplinary proceedings; (iv) conduct or arrange for the conduct of such examinations as it thinks necessary for the purposes of registering public accountants; (v) administer CPD programs for public accountants; and (vi) consult BICPA or such other entity as deemed fit. In addition, the PAOC has also established ethical requirements for all professional accountants in the jurisdiction and is also responsible for establishing quality assurance and investigative and disciplinary mechanisms.

As of 2017, although the PAOC has become operational, it faces a number of issues in trying to exercise its mandate.

The PAOC is not a member of the International Forum of Independent Audit Regulators.

The Brunei Darussalam Institute of Certified Public Accountants (BICPA), established in 1987, is a non-profit organization, managed and run through the voluntary service of accountants working in Brunei Darussalam. Membership of the institute is mandatory in order to practice as Public Accountant. BICPA’s objective includes, among others, to provide an organization for accountants to support and advance the status and interests of the accountancy profession; means for considering questions affecting the interests of the accountancy profession; to initiate, watch over, petition and take whatever action may seem desirable in relation to promoting recognition of the accountancy profession; to encourage the training and education of persons studying accountancy; and to provide a forum for accountants in Brunei Darussalam to join together and discuss mutual problems. In the mid-1990s, BICPA started to provide classes for aspiring Accounting Technicians and in 2002 started a joint venture academy with an education provider from Singapore to run the Association of Chartered Certified Accountants (ACCA) technician and professional courses. The Academy is the leading education provider for ACCA and other professional courses in Brunei Darussalam. Public Accountants in Brunei are required to be members of BICPA.

In addition to being an Associate of IFAC, BICPA is a member of the ASEAN Federation of Accountants, the regional accountancy body for ASEAN countries.

Under the Accountants Order 2010, the Public Accountants Oversight Committee (PAOC) is responsible for administering the Quality Assurance Review System (QARS). As of September 2017, the QARS has not been established in Brunei Darussalam. The Brunei Darussalam Institute of Certified Public Accountants reports that ISQC 1 and ISA 220 have not been adopted due to the fact there are no public-listed companies in the jurisdiction.

Once the QARS is established by the PAOC, all public accountants are expected to be subject to practice monitoring visits conducted by PAOC or a PAOC appointed body. No information on the expected timeframe for the launch of the QARS or the proposed requirements of the system is available.

Current Status: Not Adopted

There is no national qualification framework and the Brunei Darussalam Institute of Certified Public Accountants (BICPA) relies on the initial professional development (IPD) and continuing professional development (CPD) of foreign institutes to individuals offering services in the jurisdiction.

Only members of the eight international professional accountancy bodies recognized by the Accountants Order of 2010 may qualify to practice as a Public Accountant in Brunei Darussalam and be eligible for BICPA membership. Members of these foreign institutes are required to fulfill the IPD and CPD requirements of their respective institutes as practicing and professional members. The Brunei Darussalam National Accreditation Council is responsible for assessing and evaluating the status and quality of the professional qualifications awarded by local and overseas institutions, including those of professional accountants.

As of September 2017, BICPA reports that it was working with the PAOC to introduce a requirement for public accountants to comply with CPD requirements; however, no further information is available on this initiative.

Current Status: Partially Adopted

The Companies Act requires all public interest entities to be audited; however, auditing standards are not specified in Brunei. In December 2009, the Brunei Darussalam Institute of Certified Public Accountants (BICPA) issued a recommendation to all its practicing members to adopt ISA in carrying out audit engagements and continues to recommend, but not to require, that its practicing members use ISA.

BICPA reports that it is planning to approach the Public Accountants Oversight Committee of Brunei Darussalam, standard-setter in the jurisdiction, to promote the need to adopt ISA as the national standards for auditing.

Current Status: Not Adopted

Under the Accountants Order of 2010, the Public Accountants Oversight Committee (PAOC) is responsible for establishing ethical requirements for accountants in Brunei. As of September 2017, the PAOC has adopted the 2016 IESBA Code of Ethics for all accountants in the jurisdiction.

Current Status: Adopted

The Accountant General’s Office of the Brunei Darussalam Government is responsible for setting public sector accounting standards. The Brunei Darussalam Institute of Certified Public Accountants reports that the Accountant General’s Office endeavors to adopt International Public Sector Accounting Standards (IPSAS) where possible.

The extent and the timeframe for the adoption of IPSAS, the nature of the existing public-sector accounting standards, and the legal framework for public sector accounting standards remain to be clarified.

Current Status: Not Adopted

Under the Accountants Order 2010, one of the responsibilities of the Public Accountants Oversight Committee (PAOC) is to assist the Ministry of Finance with inquiring into any complaint or any information relating to any professional misconduct on the part of any practicing public accountant, accounting corporation, accounting firms or accounting limited liability partnership and if necessary institute disciplinary proceedings. As of September 2017, it is not clear if the PAOC has established an investigative and disciplinary (I&D) system.

Under the Brunei Darussalam Institute of Certified Public Accountants’ (BICPA) Constitution, BICPA is empowered to investigate and discipline its non-practicing members and has established an I&D system.

BICPA reported that in 2014, a task force was established to review the requirements of SMO 6, produce a comparison with BICPA’s system and develop recommendations on how BICPA could align its I&D system with SMO 6 requirements. BICPA reports that as of September 2017, the institute has not been able to progress the review of SMO 6 as first initiated in 2014.

Although the BICPA reports that practicing public accountants are covered under the PAOC, it is unclear if these members are also covered under BICPA’s I&D system.

Current Status: Partially Adopted

Under the Accounting Standards Order 2010, the Brunei Darussalam Accounting Standards Committee (BDASC) is responsible for establishing accounting standards to be implemented in the jurisdiction. Public interest entities in the jurisdiction, such as banks, financial institutions, insurance and takaful operators are required to adopt full IFRS effective for financial reporting starting January 1, 2014.

In October 2016, the BDASC issued an exposure draft on the Brunei Darussalam Accounting Framework and Standards (BDAS) for Non-Public Interest Entities (non-PIEs). The existing framework required non-PIEs to prepare financial statements in accordance to the Generally Accepted Accounting Principle in Brunei Darussalam (GAAP in Brunei Darussalam). The BDASC announced the adoption of the BDAS for non-PIEs with an effective date of January 1, 2018.

Current Status: Adopted

Relevant Organizations

• Brunei Darussalam Institute of Certified Public Accountants (BICPA)
• Brunei Darussalam Accounting Standards Commission (BDASC)
• Ministry of Finance

Relevant Legislation

• Accountants Order, 2010
• Accounting Standards Order, 2010
• Companies Act

Relevant Publications

• Adoption of BDAS for Non-Public Interest Entities in Brunei, November 2016.
• Adoption of Code of Ethics for Public Accountants and Professional Accountants, January 2017.
• BICPA, SMO Action Plan, October 2017.
• Current Status of the Accounting and Auditing Profession in ASEAN Countries, September 2014.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Brunei,” February 2017.