Financial Crime World

Accounting Standards Reflect Shift towards IT-Savvy Professionals

The demand for accountants with expertise in information and communications technologies (ICT) is growing, and international accounting standards are responding by placing greater emphasis on professional skepticism skills and behaviors. This shift will impact both aspiring and current professional accountants.

Aligning CPD Requirements

However, it remains unclear whether the current Continuing Professional Development (CPD) requirements in Iraq align with these revisions. The Iraqi Union of Accountants and Auditors (IUAA) has implemented CPD requirements for auditors, but not for non-auditors. It is recommended that IUAA further align its CPD requirements with International Education Standard 7-8.

Professional Organization and Ethics

The Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969 (as amended in 1973) defines audit activities and establishes the IUAA as the professional organization for auditors. The IUAA requires its members to adhere to the most recent Arabic translations of International Standards on Auditing (ISA). Additionally, the Code of Ethics for Professional Accountants is an important aspect of accounting standards in Iraq. The Law grants the IUAA authority to set ethical requirements, which it revises regularly to ensure convergence with the latest version of the International Code of Ethics for Professional Accountants.

Standards and Frameworks

  • IPSAS: International Public Sector Accounting Standards (IPSAS) are not currently adopted by the Ministry of Finance, although there are no plans announced for adoption.
  • Iraqi Unified Accounting System (IUAS): Self-financing public entities use IUAS on an accrual-basis, while government-funded entities use the Governmental Accounting System (GAS) on a cash-basis.

Investigation and Discipline

The IUAA is responsible for investigating and disciplining its members. The organization has established a Discipline Committee to monitor compliance with rules, regulations, and standards. Disciplinary decisions and sanctions are enforced by specialized courts and the Justice Council.

IFRS Foundation

  • Financial Reporting Framework: The financial reporting framework in Iraq is established under the Iraqi Company Law No. 21 of 1997 (as amended in 2004), which contains basic requirements for financial reporting.
  • IFRS Standards: While IFRS Standards are not specifically named in law, many Iraqi companies apply standards promulgated by the Iraqi Board of Accounting and Auditing Standards.

Conclusion

While there are some areas where Iraq’s accounting standards align with international best practices, there is still work to be done to fully adopt and implement international standards.