The development and current situation of ICPAC and the Accountancy profession in Cyprus September 2017
Agenda 1. ICPAC in brief 2. Milestones in the Institute s / profession s development 3. Current position of ICPAC 4. ICPAC as a competent authority 5. Regulating the profession 6. Training accountants 7. Continuous Professional Development 8. Accounting & Audit profession in Cyprus 9. AML & Compliance 10.Economy and Business
1. ICPAC in brief ICPAC is the professional association for all professional accountants. Established in 1961 Numbers around 4.ooo members and around another 4.000 students and graduate accountants The only recognized body of accountants in Cyprus by the Council of Ministers in 2002. Designated as a competent authority under Cyprus legislation for the professional activities of its members.
ICPAC s aims: To provide an organisational framework to all professional accountants of Cyprus To provide professional training, guidance and education to its members To regulate the profession, by means of issuing the practising licences and monitoring the work performed by the practising members and their firms To ensure adherence to the Code of Ethics To promote the interests of the members and the profession.
Vision
Mission To Empower its members by providing appropriate knowledge, training, guidance and support. To Promote the highest professional & ethical ideals. To Be the essential partner of the State for the matters relating to the economy. To Advance the public interest.
Strategic Plan 2017-2020 1. Strengthen the organizational structure and the efficiency of the Institute. 2. Strengthen the role, reputation and credibility of the Institute. 3. Strengthen the accountancy profession in Cyprus and abroad. 4. Boost the economy of the country and its position as a credible international business centre of good repute.
ICPAC s governance Directed by a Council of 14 members Council s committees following corporate governance framework Managed by the General Manager and the office team Works through 23 specialized committees made up of members Uses the services of other professional bodies and external associates.
ICPAC s committees 1. Accounting Standards 2.Administrative Service 3.Advisory Services 4.Auditing Standards 5.Chief Financial Officers 6.Compliance 7.Economic Crime and Forensic Accounting 8.Education 9.Energy 10.Financial Services 11. Insolvency 12.International Business and Foreign Investment 13.Larnaca Ammochostos Coordinating Committee 14.Limassol Paphos Coordinating Committee 15.Functions 16.Public Sector 17. Shipping 18.Listed Companies 19.Taxation 20.VAT 21.Specialized Working Group for Ethics & Institutions Committee 22.Specialized working Group for Investment Funds 23.Consultative Committee for SMPs
International Memberships International Federation of Accountants European Federation of Accountants Mediterranean Federation of Accountants
International Affiliations
Main functions of ICPAC Council matters CyPAOA Insolvency Matters Admin ve Services Law Conferences Registration of Members Committees Reporting Communicati on & media Accountancy Europe Registers admin n FCM Promotion of the profession SMPs Management Seminars Training - Presentations IFAC Auditing matters Members support Co s Law Social Responsibility Administration Joint Exam Scheme Ministries & Gov dps IFRSs Coop with local Institutions Auditors Law IT & systems Licensing Members CPD Parliament Tax / VAT Coop with foreign bodies Public Sector Matters Acountancy Cyprus Regulation & Monitoring Disciplining Assessments & Evaluations Compliance & AML New Ventures AML Law Other events
2. Milestones in the Institute s / profession s development Establish ment of ICPAC Adoption of IASs Recognised as an accountancy body Auditors Law [L.42(I)/2009] Financial Crisis in Cyprus - Troika New Auditors Law (EU D & R for pie s) [L.53(I)/2017] 1961 1981 2002 2009 2013 2017 1974 2001 2008 2012 2015 Turkish invasion in Cyprus Co Law amendment, allowing self-regulation of the profession Move to own premises ASP New Law General Manager Insolvency Law Recognised as competent authority for AML
3. ICPAC in numbers (at 31/12/2016) 3800 3700 3600 3500 Number of members for the last six years 3729 3668 3555 Members per Gender 3400 3300 3200 3290 3400 3100 3000 2900 2800 2700 3109 2011 2012 2013 2014 2015 2016 Members per professional body
Practitioners vs Non- Practitioners 1.077 P s 2.652 Non - P s Type of Practising Certificates Members Firms General Practising Certificate 1.077 726 Auditing 924 574 ASP 497 305 Insolvency Practitioners 88 -
Practitioners Firms, per no. of partners/directors No. % Firms, per legal form No. % 21 + 4 1 Between 11 20 6 1 Between 6 10 9 1 Sole practitioners 80 11 Partnerships 36 5 Between 3 5 58 8 Between 1 2 649 89 Total 726 100 Limited Lability Companies 610 84 Total 726 100
4. ICPAC as a competent authority Delegated authority under the law, as follows: The Auditors and Statutory Audits of Annual and Consolidated Accounts Law (L.53(I)/2017) Prevention and Suppression of Money Laundering Activities Laws (L.188(I)/2007 and L.58(I)/2010) Law Regulating Companies Providing Administrative Services and Related Matters (L.196(I)/2012) The Insolvency Practitioners Law (L.64(I)/2015) Resolutions or Decisions of the United Nations Security Council (Sanctions) and the Decisions and Regulations of the Council of the European Union (Restrictive Measures) Law of 2016 [Law 58(I)/2016].
5. Regulating the profession Licensing Guiding Training Supporting Practice Monitoring Disciplining
Licensing ICPAC issues the following practicing certificates to: Individuals (4) General P/C Firms (3) Insolvency ASP Auditing General Auditing ASP
Licensing Practising Certificates issued by ICPAC To obtain a practicing certificate, certain additional criteria need to be met: For the General and ASP license: - three (3) more years of working experience - Succeed in the Aptitude Tests (Cyprus Co Law and Cyprus Taxation) For the Audit Qualification, in excess of the above: must possess 3 post-qualification years of work experience in an audit firm in accordance with IES8. Succeed in Advance Audit paper (P7), for ACCA members only under specific circumstances. Additional specialized criteria needed for the Insolvency Practitioners, as imposed by the law.
Guiding Notifications for: ANNUAL COMPLIANCE OFFICER S REPORT Guidance for the completion and submission of the Annual Compliance Officers Report to ICPAC - Tax compliance - Company law - Sanctions - Competition - AML - Specific other matters November 2016
Training Seminars Workshops Presentations Circulars Webinars / e-courses Website
Supporting ICPAC office Help Desks External consultants Specialised Committees E-courses Collective offers from other organisations
Practice Monitoring Off-site surveillance On-site inspections
Practice Monitoring Off-site surveillance Risk Based process Questionnaire Process results Medium Risk High Risk Calculate a risk score Low Risk Assign a risk category
Practice Monitoring Onsite visits Monitoring tools: Audit Monitoring AML / Rules and Regulations Review Focus on auditors and audit firms On ALL Licensed entities ICPAC has outsourced the task of the on-site monitoring visits to ACCA since 2005.
Disciplining Disciplinary Committee: for breaches of law, the Regulations and the Code of Ethics. Regulatory Committee: for unsatisfactory results and matters arising from the on-site monitoring visits to members and firms.
6. Training accountants ACCA and ICPAC are partners in a Joint Examination Scheme (JES) since 2004: All ACCA students who are Cyprus residents are automatically included in the JES The JES follows the same exams as ACCA internationally The JES has 3 variant papers out of 14 papers: F4 Cyprus company law F6 Cyprus taxation P6 Cyprus advance taxation
ICPAC operates its own CPD scheme, in cooperation with ACCA. Valid CPD activity, is any training activity which is RELEVANT to the work and duties of each member. Required amount of CPD units = 40 p.a., of which 21 units must be verifiable. One net hour of training is equivalent to 1 CPD unit Submissions: Annual CPD declaration (mandatory) CPD evidence review (upon request) 7. Continuous Professional Development
CPD Members activities ICPAC s training activities exceed 4.500 attendees per year. More than 30 activities, including seminars, conferences, presentations, workshops, roadshows, are organised by ICPAC on a variety of topics, all relevant to the professional activities of the members. ICPAC s website facilitates the online members maintenance of the personal cpd records.
CPD Members activities E-learning platform on AML and Compliance issues
CPD Approved Employer Schemes There are also 3 CPD schemes for employers: Approved Employer (trainee development) Approved Employer (professional development) Approved Employers (practising certificate development audit) ICPAC, via ACCA, monitors the Approved Employer Schemes on a regular basis. All members holding an Audit Qualification are required to abide by the provisions of IES8.
8. Accounting & Audit profession in Cyprus Companies Law, Cap 113 Assessment and Collection of Taxes Laws Auditors Law of 2017 Directives issued by the Central Bank of Cyprus
Companies Law Keeping of accounting records (art. 141): Directors of the companies shall cause proper books of accounts to be kept which are deemed necessary for the preparation of financial statements in accordance with the Law. Annual & Consolidated financial statements (art.142): Directors shall cause to be made, for every company, a full set of financial statements as this set is prescribed on the basis of International Accounting Standards.
Article 152 Α (1)(a) Companies Law All companies shall submit their financial statements for statutory audit. [EU Accounting Directive (2013/34/EU)] Article 151 A (1) Public Interest Entities which are large undertakings exceeding 500 employees, 6. as from [ financial years commencing on 1/1/2017 and onwards must issue a Statement on non-financial and diversity information. [EU Directive 2014/95/EU]
Tax Legislation (Assessment and Collection of Taxes laws) All companies and all sole traders with turnover more than 70.000 p.a. must file their tax returns to the Tax Department accompanied by audited financial statements.
Auditors Law of 2017 [L.53(I)/2017] Article 67 All statutory auditors perform the statutory audit in accordance with the International Standards on Auditing, as adopted by the European Commission as per article 26, paragraphs 1 of the Directive 2006/43/EU.
Auditors Law Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public-interest entities Effective on 17 June 2016 Auditors Law of 2017 L.53(I)/2017 (enacted on 2/6/2017)
Cyprus Public Audit Oversight Authority (CyPAOA) is the ultimate competent authority of the audit profession responsible for the supervision of the: - Approval and registration of auditors in the official register - Adoption of ethical standards, quality control standards and auditing standards - Continual professional development of auditors - Quality control systems of the auditors and audit firms - Disciplinary procedures (investigation, referral for disciplinary action, imposition of penalties) Ultimate Competent Authority: CyPAOA
Delegation of tasks to Recognised Bodies of Auditors CyPAOA may delegate to Recognised Bodies of Auditors some or all of its duties mentioned before, with the exception of: Monitoring of the quality control systems of the auditors and audit firms with PIE clients Investigations relating to auditors and audit firms with PIE clients for matters arising from the monitoring of quality control systems Disciplinary proceedings and imposition of penalties to auditors and audit firms with PIE clients for matters arising from the monitoring of quality control systems.
ICPAC as a Recognised Body of Auditors The Law explicitly recognizes ICPAC by name as a Recognised Body of Auditors (art.113). On 12 September 2017, CyPAOB and ICPAC signed a Delegation Agreement, whereby ICPAC undertakes to carry out the delegated tasks as stipulated in the Agreement and allowed by the Law.
Public Interest Entities (PIE s) entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State; Licensed credit institutions; insurance and re-insurance undertakings; entities designated by the Council of Minister as public-interest entities. Main provisions of the Auditors Law for PIE Auditors
Audit Committee Main provisions of the Auditors Law for PIE Auditors Mandatory for every public-interest entity. Defined composition, independent of the audited entity. Ultimately responsible with respect to the auditors and the audit work performed.
Duration of the audit engagement Main provisions of the Auditors Law for PIE Auditors Initial engagement of at least one year. The engagement may be renewed for PIEs, other than Banks: Max consecutive engagement duration: 10 years. Where a public tendering process for the statutory audit is conducted, maximum duration extends to 20 years. Where there is a joint audit engagement, maximum duration extends to 24 years.
Duration of the audit engagement for Banks o Max consecutive engagement duration: 9 years. o No extension after the initial 9 year period, unless there is a cooling off of 4 years. o The appointment of the appointment of the statutory auditor as well as the above points for banks, is subject to the approval of the Central Bank of Cyprus. Main provisions of the Auditors Law for PIE Auditors
Non-Audit Services Main provisions of the Auditors Law for PIE Auditors A statutory auditor of a PIE, or any member of the network to which the statutory auditor or the audit firm belongs, shall NOT directly or indirectly provide to the audited entity, to its parent undertaking or to its controlled undertakings within the Union, any prohibited non-audit services.
Non-audit services to PIE s Tax Management and decision making Payroll Bookkeeping & preparation of Financial Statements Legal Human Resource Internal control, risk management & internal audit Valuations Financing, Investment strategy Promotion and dealings in shares of the client Main provisions of the Auditors Law for PIE Auditors - Tax services, relating to: Preparation of tax forms; Identification of public subsidies and tax incentives; Support regarding tax inspections by tax authorities; Calculation of direct and indirect tax and deferred tax; Provision of tax advice. - Valuation services
Audit fees Main provisions of the Auditors Law for PIE Auditors Fees for the provision of statutory audits to PIE s shall not be contingent fees. Fees from the provision of Non-Audit Services are limited to 70% of the average of the fees paid in the last three consecutive financial years for the statutory audit.
9. AML & Compliance - Competent authority since 2001 - Issues its own AML Directive. - In 2015, introduced a specific monitoring tool for the off-site surveillance and onsite inspection of its members solely on aml and compliance matters. - Probably the only accountancy body in Europe that has adopted such mechanisms. - Provides dedicated training and other supporting offers to its members. - Envisages cooperation with the Police and the Economic Crime department.
- Dedicated committee for all Compliance matters (ie AML, Corporate Governance and Regulatory Compliance). - Enhanced its internal resources on the specific matters. - Produces and disseminates updates and guidance to the members. AML & Compliance - Seminars and participates in conferences on AML and compliance. - E-courses on AML & Compliance via a specifically designed e-learning platform, free of any charge. - Close cooperation with all competent authorities and especially with the FIU.
AML & Compliance ICPAC participates in: The Advisory Authority for the Prevention and Suppression of Money Laundering Activities A Special Technical Committee AML/CFT at the Central Bank of Cyprus The National Risk Assessment project (World Bank) The process of transposing the 4 th EU AML Directive into national law The processes for implementing FATCA and CRS
ICPAC: AML & Compliance - Has successfully completed the AML Action Plan of TROIKA, within the scope of the Adjustment Programme in 2015. - Underwent more than 20 evaluations, assessments and other encounters with Troika, OECD, IMF, European Commission, MONEYVAL, as well as international rating agencies between 2012 2015. - Entered into a number of affiliations with international organisations that specialise on compliance matters
Evaluations by international organisations
10. Economy and Business Cyprus has developed over the years as an international business centre: - Common law legal regime - Favourable and easy to apply tax system - Good infrastructure - Trained and competent human capital - Quality, client-centred, services - Competitive cost for the services rendered - Adaptability to global changes - Pleasant conditions - Stability and security of the country
Contribution ICPAC and the Accountancy Profession have a vast contribution to the economic development and activity: Greatly involved in the promotion of Cyprus as an International Business Centre Attract businesses and investors to Cyprus Provide various services to international clients Give significant support to the government, ministries and various departments on a constant basis. Massively involved in the Double Tax Treaties negotiations Works closely with all productive stakeholders and sectors of the public sector.
Institutional Co-operations State Ministries Parliament CIPA - CIFA CyPAOA CySEC Central Bank of Cyprus MOKAS Tax Department Auditor General Accountant General Cyprus Stock Exchange CCCI OEB Private sector Cyprus Shipping Chamber Cyprus Bar Association Association of Cyprus Banks Association of Insurance Companies Association of Investment firms Universities International organisations International accountancy bodies Accountancy bodies of other countries Other international professional bodies
ICPAC is dedicated to servicing its Members, the accountancy profession, the economy and, in general, the public interest!
For more information, contact: Kyriakos Iordanou General Manager The Institute of Certified Public Accountants of Cyprus Tel: [+357] 22 870 030 Fax: [+357] 22 766 360 E-mail: kyriakos.iordanou@icpac.org.cy Website: http://www.icpac.org.cy