Iraq’s Progress on Implementing International Auditing and Assurance Standards

The Iraqi Union of Accountants and Auditors (IUAA) has made significant progress in implementing international auditing and assurance standards, according to a recent assessment by the International Federation of Accountants (IFAC).

Implementation of International Education Standard

The IUAA is responsible for developing and implementing accounting education curricula, as well as supporting universities in delivering undergraduate accountancy programs. The organization has adopted revised requirements for international education standard (IES) 2, 3, and 4, which reflect the increasing demand for accountants skilled in information and communications technologies.

Continuing Professional Development

However, the assessment found that the IUAA’s continuing professional development (CPD) requirements require further alignment with IES 7-8. The organization has mandated 20-40 hours of CPD for auditors, while non-auditors are not required to fulfill CPD requirements.

International Standards on Auditing

The IUAA has also adopted international standards on auditing (ISA), including ISA 540, ISRS 4400, and ISA 315. However, the assessment noted that revisions to Parts 1 and 2 of the International Code of Ethics for Professional Accountants have not yet been translated into Arabic.

Public Sector Accounting Standards

In terms of public sector accounting standards, the Ministry of Finance has not adopted international public sector accounting standards (IPSAS). The IUAA reports that self-financing public entities use the Iraqi Unified Accounting System on an accrual-basis, while entities funded by government use the Governmental Accounting System on a cash-basis.

Investigation and Discipline System

The assessment also found that the IUAA’s investigation and discipline system is in line with the revised standard for monitoring outstanding cases (SMO 6).

Financial Reporting Framework

Finally, the financial reporting framework in Iraq is established under the Iraqi Company Law No. 21 of 1997, which contains basic requirements for financial reporting for all companies. However, IFRS Standards are not specifically named in law, and while many Iraqi companies apply the standards promulgated by the Iraqi Board of Accounting and Auditing Standards, there are significant differences between these standards and IFRS Standards.

Conclusion

Overall, the assessment concluded that Iraq has made progress in implementing international auditing and assurance standards, but still has some work to do to align its CPD requirements with IES 7-8 and to adopt IPSAS.