Audit quality in asean countries

Canada excels in ease of starting a business and quality of scientific publications, while its political, regulatory and business environment draw top marks. Canada has logged improvement in its education system. Europe is particularly strong in human capital and research, infrastructure, business sophistication.

Audit quality in asean countries

This report has been prepared in cooperation with the AFA to assist with this harmonization process by: The overall key objective of the report is Audit quality in asean countries promote the sustainable capacity development of the accounting and auditing profession across the ASEAN member countries.

The report has deliberately not prioritized the recommendations made as that is a matter that will need to be decided by the AFA members in conjunction with decisions about AFA s future mandate and role.

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Role of the Accounting and Auditing Profession A properly functioning accounting and auditing profession is a critical component of private sector development in terms of domestic investor confidence and the ability to attract foreign direct investment.

It is also critical to the public sector in terms of achieving sustainable public financial management reforms and the promotion of improved governance, accountability and transparency. Most of the countries in ASEAN have or are in the process of adopting and implementing international accounting and auditing standards for both the private and public sectors.

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However, there are significant capacity issues in both the sectors, particularly in the lesser developed member countries in ASEAN.

These countries face a Audit quality in asean countries task to successfully implement accounting and auditing reforms and will require substantial technical assistance and financial support over the medium term. Currently most of the support that is being provided is at the country level and in many cases it is ad hoc, and is not properly prioritized or sequenced.

It has also commenced discussions with IFAC about becoming a Recognized Regional Organization and recognizes the importance of achieving such official international recognition. AFA intends to develop a strategic plan and as part of that process it will need to consider its future mandate and the role its member organizations want it to play in development of the ASEAN accounting and auditing profession.

Many of the recommendations in this report may give rise concerns about national sovereignty. The individual AFA member organizations will need to balance their national considerations with what they agree is in the best interests of ASEAN economic community as a whole.

The benefits offered from increased harmonization, including the potential facilitation for more rapid closure of the current development gap through regional coordination of capacity building, are significant.

AFA acknowledges its current capacity and resourcing constraints.

Audit quality in asean countries

Based on the decisions about AFA s future mandate and role it will need to define its own organizational capacity development needs. This will likely include consideration of its future organizational structure e. Should development partner support be required AFA will need to be able to present a coherent and convincing proposal that demonstrates its commitment to achieving sustainable capacity development results.

AFA could play an active role assisting the development of lesser developed PAOs through the coordination and facilitation of mentoring arrangements for those PAOs that are in the early stages of their development. A useful approach may well be to cooperate with CAPA and potentially use the PAO maturity model they have developed to ensure a comprehensive assessment is completed and that a properly tailored approach is taken to capacity development based on each PAO s local context.

Accounting Education The variation in the quality of accounting education across ASEAN countries is probably the most important area and would potentially have the most impact in terms of closing the development gap over the medium term.

Content of Professional Accounting Education varies significantly. Using the findings from the above review AFA could consider the coordination of the development of a common core accounting curriculum for ASEAN countries as well as teaching and study materialsin order to ensure that accounting academics and accounting students have mastered a core set of academic and professional competencies upon graduation.

The common core curriculum could be utilized across ASEAN countries, with adaptations to ensure adequate coverage of local factors such as legislative and taxation requirements.

Such an exercise should be carried out in close cooperation with the national PAOs, as well as with their local in country stakeholders education institutions, academics, business communities and public sectors. It is recognized that this would be a major undertaking and therefore would likely need to be undertaken in stages with input of substantial technical and financial resources.

Entry Requirements for Professional Accountants and Continuing Professional Development CPD Closely aligned with accounting education are the entry and continuing professional development requirements for Professional Accountants.

Again there is a currently wide variation in the requirements and the monitoring and enforcement of those requirements across AEAN countries.

AFA could consider providing coordination, facilitation and oversight of the three IES entry requirements: This would enable progress towards the aim of achieving full mutual recognition across member PAOs. AFA should consider a review of the degree of alignment of its member countries codes of ethics with the IFAC code of ethics including the audit rotation requirements.

This could then provide the basis for discussions on areas where increased harmonization is possible. This raises issues in relation to the quality, consistency and comparability of financial information as well as the differing standards of accountability and transparency being applied. Differential Reporting Framework As part of this process the development of a differential reporting framework, that would achieve a greater degree of harmonization in terms of the general purpose financial reporting and statutory audit requirements for different entity types, could be developed.

CURRENT STATUS OF THE ACCOUNTING AND AUDITING PROFESSION IN ASEAN COUNTRIES - PDF

This framework could then be further adapted by individual countries to suit their individual contexts. PIE Accountability Requirements There is a wide variation in the requirements for submission of financial statements, the deadlines applied and the publication requirements for PIEs.

PIEs are the entities that are likely to have significant cross border activities both within and external to ASEAN economic community. AFA could potentially have a significant impact through working with other key stakeholders particularly regulatory agencies to: In practice, due to capacity constraints implementation of IFRS is quite weak in all except the more developed countries.

There is significant work required to ensure that there are sustainable mechanisms put in place to: There is also a significant, currently substantially unmet need, for capacity development and training on the practical application of the International Accounting Standards.

AFA could therefore add significant value by coordinating regional capacity building in each of the areas mentioned above. Ideally this should focus on facilitating access to technical knowledge, expertise and implementation experience from within its members and associate members.

The fact that some ASEAN countries have chosen to adopt earlier versions or substantially modified versions of the international accounting standards is unfortunate.quality in ASEAN.

In view of the present crisis faced by some of the ASEAN countries, increasing the quality of audit services should heighten investors’ confidence in the fair.

ASEAN Federation of Accountants (AFA)

Asian Review of Accounting, Volume 10, Number 2 — ASEAN countries. His findings indicate that a climate of differential audit quality exists among ASEAN countries, mainly owing to their diverse legal. Summary Report on the ASEANSAI Knowledge Sharing Workshop on Water Management Auditing In ASEAN Countries Workshop on Water Management Auditing in ASEAN Countries Yogyakarta, Indonesia, August Dr.

Sutthi gave the interesting case studies from SAIs in ASEAN which their audit reports about water management were appeared in. Audit Quality in ASEAN Michael Favere-Marchesi Simon Fraser University, Burnaby, B.C., Canada Key Words: ASEAN; Audit quality; International auditing standards; Statutory auditors Abstract: This study explores audit quality in ASEAN from an analysis of the legal environment faced by statutory auditors.

First, it provides an overview of the national laws, regulations, professional codes and. regional project “Enhancing Food Safety by Strengthening Food Inspection Systems in ASEAN Countries”, funded by the Government of Japan, four case studies have been published on different dimensions of inspection and certification.

This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in thi.

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