Legal and Regulatory Environment

Abstract

Only Certified Public Accountants (CPA) are regulated at the national level. Accountancy Profession Law No. 73 of 2003 empowers the Higher Council for the Accountancy Profession (HCAP) and the Jordanian Association of Certified Public Accountants (JACPA) to regulate the accountancy profession in Jordan. To apply for a CPA license, candidates must apply to JACPA and fulfill the following conditions (i) provide proof of Jordanian citizenship; (ii) provide proof of ‘full civil eligibility’ and no criminal background; (iii) pass the JACPA CPA examination; and (iv) possess either an accounting degree from a recognized university; or a degree in any of the specialties related to the profession from a recognized university (which can include foreign university degrees as long as the candidate is able to pass an examination with relevant Jordanian legislation). Accountancy Profession Law No. 73 of 2003 defines the requirements for initial professional development and continuing professional development requirements, while the country’s universities and the Ministry of Higher Education and Scientific Research share responsibility for developing the degree curricula which comprises the country’s Initial Professional Development (IPD). HCAP, led by the Minister of Industries and Trade, is primarily responsible for the oversight of the audit profession, as well as the approval of applicable ethical requirements, sanctions, and accounting / auditing standards. It also approves the granting or revocation of CPA licenses. JACPA on the other hand, whose membership is mandatory for CPAs, is mainly responsible for (i) administering professional certification examinations and verifying fulfillment of practical experience / continuing professional development requirements; (ii) enforcing and monitoring members’ compliance with ethical requirements, rules, and accountancy standards through an investigations & disciplinary system; and (iii) recommending ethical requirements and accounting / auditing standards to the HCAP. Although JACPA does not have the authority to establish and operate a mandatory quality assurance review system, under Accountancy Profession Law No. 73 of 2003, it can inspect its members’ working papers. Additionally, it has authority to operate a voluntary program of audit quality assurance. The Jordan Securities Commission maintains a list of auditors who are authorized to conduct audits for public companies, as auditors need to meet additional requirements imposed by the Jordan Securities Commission. The Central Bank of Jordan also maintains a list of auditors who are authorized to conduct audits of banks’ financial statements. The International Arab Society of Certified Accountants (IASCA) determines certification and Continuing Professional Development (CPD) requirements for the two voluntary designations that it offers: International Arab Certified Public Accountant and International Arab Certified Management Accountant. Accountants and Management Accountants are subject to regulation by IASCA if they choose to remain members, which includes enforcement via its system of investigation and discipline. Audit Oversight Arrangements Professional Accountancy Organizations International Arab Society of Certified Accountants (IASCA) IASCA was established in 1984 in the United Kingdom as a non-profit professional accounting association and was formally registered in Jordan in 1994 by the Ministry of Industry and Trade as the Arab Society of Certified Accountants. It is a voluntary membership organization with a mission to enhance the professional and technical competence of the accountancy profession. It offers various certification schemes to fulfill its mandate. In addition to being a Member of IFAC, IASCA is a member of the International Committee for Accounting Education and Research, the Gulf Cooperation Council Accounting and Auditing Organization, and has consultative status with the United Nations Economic and Social Council. Jordanian Association of Certified Public Accountant (JACPA) The Audit Profession Law No. 32 of 1985 established the first professional auditing body in Jordan, Jordanian Association of Certified Public Accountants (JACPA). It is a mandatory membership organization for Certified Public Accountants. Under Accountancy Profession Law No. 73 of 2003, JACPA is mainly responsible for (i) administering professional certification examinations and verifying fulfillment of practical experience / continuing professional development requirements; (ii) enforcing and monitoring members’ compliance with ethical requirements, rules, and accountancy standards through an investigations & disciplinary system; and (iii) recommending ethical requirements and accounting / auditing standards to the Higher Council for the Accountancy Profession. Although JACPA does not have the authority to establish and operate a quality assurance review system, under Accountancy Profession Law No. 73 of 2003, it can inspect its members’ working papers. In order to promote audit quality assurance, JACPA has been working to establish a voluntary system of QA in order to promote quality of services amongst its membership. International Public Sector Accounting Standards The Ministry of Finance is responsible for the adoption of public sector accounting standards in Jordan which are modified cash-basis and, in 2015, officially endorsed the adoption and implementation of IPSAS. A five-year IPSAS implementation road map is in place, with implementation assistance coming from the United States Agency for International Development (USAID) under Jordan’s Fiscal Reform Project. Significant progress has been made in supporting the Government of Jordan’s application of the cash-basis IPSAS. The project envisions a gradual transformation from cash basis to accrual basis of IPSAS accounting with completion of this project now slated for 2021 In addition to being a member of IFAC, JACPA holds the chairmanship in the Arab Federation of Accountants and Auditors (AFAA) and is also a member of the Gulf Cooperation Council Accounting and Auditing Organization (GCCAAO). Both organizations are presently applying for recognition as IFAC Network Partners.