Rwanda

The Companies Act, 2018 sets the requirements for the preparation and presentation of financial statements in Rwanda, mandating that they be prepared in accordance with international accounting standards. The Law on the Institute of Certified Public Accountants (iCPAR) No. 11, 2008 (ICPAR Law 2008) authorizes the iCPAR, under Article 3, to set accounting standards consistent with IFRS. In line with this requirement, iCPAR adopted IFRS for application by companies with public accountability (i.e. banks, other financial institutions, and insurance companies) and IFRS for small- and medium-sized entities (SMEs) for application by all other companies.

The Companies Act 2018 states that the financial statements of all companies, except small private companies, must be audited annually by a licensed member of iCPAR. Article 3 of the iCPAR Law 2008 establishes iCPAR as the auditing standard-setter and requires that the auditing standards in Rwanda be consistent with ISA issued by the IAASB. In line with this requirement, iCPAR has adopted ISA as issued by the IAASB without amendment.

In addition to the requirements of the Companies Act, the Banking Act of 2002, as amended in 2017, empowers the National Bank of Rwanda (BNR) to regulate financial reporting by banks, other financial institutions, and insurance companies, and to issue accounting instructions governing the treatment of specific transactions. Lastly, the Capital Market Authority (CMA) defines the regulatory framework under which the Rwanda Stock Exchange (RSE) operates. The RSE Rulebook states that financial statements should be prepared in accordance with internationally acceptable accounting standards. In practice, listed companies are to comply with IFRS and to be audited in terms of ISA as adopted by iCPAR.

The accountancy profession in Rwanda is regulated at the professional level by the Institute of Certified Public Accountants of Rwanda (ICPAR) under the Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 (the Law).

Under the Law, ICPAR confers two qualifications: Certified Public Accountant (CPA) and Certified Accounting Technician (CAT) depending on their course of study.

To pursue the CPA qualification, an individual must first fulfill one of the following requirements: (i) passing the Senior Six Examination with a score of 30 or more points (high school diploma); (ii) holding a Certified Accounting Technician Certificate; (iii) holding a Bachelor’s Degree or Diploma in Accounting or Accounting Certificate from a recognized university/tertiary institution or professional body; or (iv) being a third year university students specializing in Accounting or Business studies.

Candidates must then pass ICPAR’s examinations set by the institute’s Education, Curriculum Development, and Examinations Commission and submit evidence of three-years’ practical experience in a position of responsibility to manage audits or accounting assignments. Various training institutions teach to ICPAR’s curriculum. Upon successful completion, candidates may apply for membership of ICPAR and then for a practicing certificate from the institute. When applying for the practicing certificate, individuals must submit evidence of two years of audit experience and a letter of recommendation from the supervisor, who also must be an ICPAR member and practicing certificate holder. Audit and assurance services must be conducted by CPAs that are ICPAR members and hold the requisite practicing certificate.

Entryways for the CAT qualification include (i) obtaining a score of 15 points or more on the Senior Six Examination; (ii) holding the Senior Six Examination certificate with at least two years of relevant work experience; (iii) holding a certificate from recognized institutions in accounting; (iv) holding a certificate from other recognized professional examination bodies; or (v) passing the Senior Six Examination with 15 or more points and having at least three year’s work experience. Candidates also are required to pass ICPAR’s CAT examination and have one-year of monitored practical experience. After successfully passing exams and completion of practical training, individuals must apply for membership of ICPAR. Services provided by CATs may include:

• Assisting with accounts preparation;
• Bookkeeping;
• Processing invoices;
• Recording payments;
• Preparing ledger balances;
• Submitting tax returns;
• Preparing VAT returns and National Insurance contributions;
• Processing company expenses; and/or
• Working with payroll software.

In accordance with Article 7 of ICPAR Law 2008, ICPAR is responsible for: (i) providing members with professional education in accountancy and related fields; (ii) advising on curricula for any accountancy courses; (iii) developing teaching programs to organize examinations and issuing certificates in matters relating to the accounting profession; (iv) establishing continuing professional development requirements; (v) issuing and promoting the implementation of accounting and auditing standards in the public and private sector; (vi) advising the government on matters relating to the profession; (vii) setting ethical requirements for members; (viii) issuing license of exercising the accounting profession to qualifying members requesting such license and withdrawing it in case of misconduct; (ix) operating a quality assurance (QA) review system for all audits; and (x) taking disciplinary measures against members.

There is no independent audit oversight entity in Rwanda.

Auditors are regulated by the Institute of Certified Public Accountants of Rwanda (iCPAR) in accordance with the Law on the Institute of Certified Public Accountants (iCPAR) No. 11 of 2008. Audits must be conducted by CPAs, who must be a member of and hold a Practicing Certificate (PC) from iCPAR. In accordance with Article 7 of iCPAR Law 2008, iCPAR is responsible for: (i) providing members with professional education in accountancy and related fields; (ii) advising on curricula for any accountancy courses; (iii) developing teaching programs to organize examinations and issuing certificates in matters relating to the accounting profession; (iv) establishing continuing professional development requirements; (v) issuing and promoting the implementation of auditing standards; (vi) setting ethical requirements for members; (vii) issuing license of exercising the accounting profession to qualifying members requesting such license and withdrawing it in case of misconduct; (viii) operating a quality assurance (QA) review system for all audits; and (ix) taking disciplinary measures against members.

Institute of Certified Public Accountants of Rwanda (iCPAR)

iCPAR was established under the Law on the Institute of Certified Public Accountants (iCPAR) No. 11 of 2008 (iCPAR Law 2008) with the mandate to regulate the accountancy profession in Rwanda. iCPAR confers two designations for its members: Certified Public Accountant (CPA) and Certified Accounting Technician (CAT) depending on their course of study. iCPAR membership is mandatory for CPAs, and only CPAs may conduct audits.

In accordance with Article 7 of iCPAR Law 2008, iCPAR is responsible for: (i) providing members with professional education in accountancy and related fields; (ii) advising on curricula for any accountancy courses; (iii) developing teaching programs to organize examinations and issuing certificates in matters relating to the accounting profession; (iv) establishing continuing professional development requirements; (v) issuing and promoting the implementation of accounting and auditing standards in the public and private sector; (vi) advising the government on matters relating to the profession; (vii) setting ethical requirements for members; (viii) issuing license of exercising the accounting profession to qualifying members requesting such license and withdrawing it in case of misconduct; (ix) operating a quality assurance (QA) review system for all audits; and (x) taking disciplinary measures against members.

In addition to being an IFAC Member, iCPAR is a member of the Pan African Federation of Accountants.

As part of the UK’s Department of International Development-funded IFAC PAO Capacity Building Program, the Association of Chartered Certified Accountants (ACCA) is working with iCPAR to implement its 2017–2021 strategy, which has included reviewing and strengthening the systems for accountancy education, qualification, and continuing professional development. Updates are included in relevant SMO sections.

iCPAR is also a co-signatory of the mutual recognition agreement (MRA) between professional accountancy organizations (PAOs) in the East African Community (EAC) Institutes of Accountancy. The EAC is moving towards the harmonization of its economies, including the harmonization of qualifications and regulation of qualifications. The objective of the MRA is to facilitate the mutual recognition of members of PAOs in the region who have completed a professional accountancy qualification in line with the IES requirements.

The Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 gives ICPAR the responsibility of establishing a quality assurance (QA) review system for all mandatory audits.

As a follow up on the policy recommendations made by a World Bank 2008 Report on the Observance of Standards and Codes, ACCA was contracted to establish ICPAR’s audit quality assurance function in 2015. With ACCA’s support, ICPAR launched a pilot Audit Quality Assurance (AQA) Review program in September 2015. The first review cycle was the pilot phase during which ACCA conducted audit reviews for all audit firms in Rwanda and provided them with an initial assessment of the quality of their audits.

During 2017–2018, ICPAR recruited a Professional Development Services Director and a Quality and Development Manager to run the next cycle of QA reviews, still with the support of the ACCA. The AQA reviews were expected to commence in Q1 of 2020; however, due to COVID-19 and the public health crisis, ICPAR has deferred this cycle to 2022. ICPAR states the AQA will meet the SMO 1 requirements once operational.

Current Status: Partially Adopted

The Institute of Certified Public Accountants of Rwanda (ICPAR) is mandated by the Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 to design the syllabus/curricula and conduct examinations leading to the available designations of Certified Public Accountant (CPA) and Certified Accounting Technician (CAT). It also has established practical experience requirements and may set continuing professional development obligations (CPD) for professional accountants in Rwanda. The curricula at training institutions, including universities which issue accounting degrees, are solely determined by the Higher Education Council (HEC).

ICPAR’s Education, Curriculum Development, and Examinations Commission establishes the syllabus, curriculum, and examinations. With the assistance of the Institute of Certified Public Accountants in Ireland, ICPAR reports its CPA qualification was developed in line with IES requirements as of 2010.

ICPAR reports that a new competency-based curriculum has been developed for its CAT qualification, which was launched in 2019, to align with the 2015 IES requirements. The curriculum entails content from various subject areas and competences, with an appropriate mix of soft skills; professional values, ethics and attitude that may be required for any professional accountant to work effectively. It intends to update its CPA curriculum in a similar manner.

The institute’s Education Development Services and Professional Development Services departments are responsible for implementing and monitoring compliance with the mandatory CPD requirements, which it states are in line with 2015 IES 7 and 8.

Current Status: Partially Adopted

The Companies Act 2018 states that the financial statements of all companies, except small private companies, must be audited annually by a licensed member of ICPAR.

Article 3 of the Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 establishes ICPAR with the mandate to adopt and implement auditing standards in Rwanda. The law requires that auditing standards in Rwanda be consistent with ISA issued by the IAASB.

ICPAR reports that it has adopted ISA as issued by the IAASB without modifications and including effective dates. The 2020 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is in use.

Current Status: Adopted

ICPAR is legally authorized to issue a Code of Professional Conduct and Ethics that is kept consistent with the IESBA Code of Ethics for Professional Accountants. ICPAR states that the 2021 International Code of Ethics is effective.

Current Status: Adopted

The East African Community (EAC) Protocol includes a requirement for member states to adopt accrual-basis IPSAS for central and local government, non-trading state-owned enterprise and regulatory bodies, and IFRS for state-owned enterprises. As a member state of EAC, the Rwandan Government aims to achieve full compliance with accrual-basis IPSAS by June 30, 2023.

Meanwhile, Article 3 of the Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 stipulates that within public institutions the accounting standards should be published by ICPAR and consistent with IPSAS. Under the law, ICPAR also is responsible for advising the Rwandan Government on matters related to public financial management and accountancy.

According to IFAC, CIPFA 2020, the central government, local government, and projects are on the modified cash basis of accounting transitioning to an accrual-basis and are consolidated in the general government financial statements. Government business entities utilize the IFRS framework.

Current Status: Partially Adopted

In accordance with Article 40 of the Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008, ICPAR is responsible for the investigation and discipline (I&D) of professional accountants for breach of rules and misconduct. ICPAR has established I&D procedures accordingly.

The institute has an Inspection Commission which, upon request by the Council, may investigate allegations/cases of professional misconduct and submit the report to the Governing Council.

The Council will in turn hand the report over to the Disciplinary Commission which is responsible for analyzing and examining complaints related to professional misconduct and communicating a conclusion back to the Council. Individuals have the right to appeal the decision before the Council before a final decision is made.

ICPAR has conducted a self-assessment of its I&D system against the SMO 6 benchmark. It notes that it has as formalized a link between its quality assurance (QA) review results and once QA reviews commence, this will be operational. This ensures that ICPAR’s I&D procedures fulfill all the SMO 6 best practices.

Current Status: Adopted

The Law on the Institute of Certified Public Accountants (ICPAR) No. 11 of 2008 states that applicable private sector accounting standards are to be published by ICPAR and must be consistent with IFRS. ICPAR has therefore adopted IFRS and IFRS for small- and medium-sized entities without modification as follows:

• Companies with public accountability (i.e. banks, other financial institution, insurance companies, and listed companies) must use full IFRS.
• All other companies should use IFRS for SMEs.

Current Status: Adopted

Relevant Organizations

• Institute of Certified Public Accountants of Rwanda (ICPAR)
• East African Community (EAC)

Relevant Legislation

• Banking Act of 2002, as amended in 2017
• Companies Act, 2018
• ICPAR’s By-Laws
• Law on the Institute of Certified Public Accountants (ICPAR) No. 11, 2008 (ICPAR Law 2008)
• RSE Rulebook, 2013

Relevant Publications

• ICPAR, SMO Action Plan, November 2020.
• ICPAR, ICPAR Sign Partnership Agreement with University of Kibungo, February 2018.
• IFAC, IFAC Selects ACCA to Strategically Strengthen Accountancy Profession in Rwanda, January 2016.
• IFRS Foundation, IFRS Application Around the World—Jurisdictional Profile: Rwanda, February 2017.
• Ntirenganya, Emmanuel in The New Times “Rwanda to Bridge Shortage of Certified Accountants in Next 5 Years”, 10 Feb 2019.
• World Bank, Report on Observance of Standards and Codes—Accounting and Auditing: Rwanda, 2008.
• World Bank, Report on Observance of Standards and Codes—Accounting and Auditing: Rwanda, November 2015.