2003年-世界发展银行全球_Jamaica___Accounting_and_Auditing_16页_478kb

Summary of the REPORT ON THE OBSERVANCE OF STANDARDS AND CODES (ROSC) in Jamaica

Executive Summary

Jamaica is transitioning from national accounting and auditing standards to the full observance of International Accounting Standards (IAS) and International Standards of Auditing (ISA). While national standards are based on IAS, there is a "standards gap" and some "compliance gap" among listed companies. The transition to ISA is expected to be less challenging than to IAS due to the similarity between national standards and ISA.

The transition to IAS requires significant effort, including education and training, development of interpretations, and establishment of compliance monitoring mechanisms. The government, through the Ministry of Finance and Planning, the Bank of Jamaica, and the Financial Services Commission, is committed to improving the quality of financial reporting. This report provides policy recommendations to support the implementation of IAS and ISA through a Country Action Plan.

Core Content

• Accounting Standards Transition: Jamaica is moving towards IAS, with the Institute of Chartered Accountants of Jamaica (ICAJ) aiming for full compliance by companies with accounting periods starting on or after July 1, 2002.
• Auditing Standards Transition: ICAJ has decided to align auditing practices with ISA, effective from July 1, 2002, following the use of Jamaican Standards on Auditing (JSA), which were similar to ISA.
• Regulatory Framework: The Companies Act 1965 mandates the audit of all limited companies, with auditors required to be licensed by the Public Accountancy Board (PAB). The government is considering a draft bill to reduce audit requirements for small companies.
• Institutional Structure: The ICAJ and PAB are key institutions in regulating the accountancy profession. ICAJ is the sole agent of PAB for processing applications for registration as a public accountant.
• Professional Education: Two main routes exist for becoming a chartered accountant: the ACCA program and the M.Sc. (accounting) at the University of the West Indies (UWI). ICAJ has initiated a continuing professional education program, including training on IAS and ISA.

Main Points

Accounting Standards

• Current Standards: Until 2002, companies in Jamaica followed Jamaican Statements of Standards Accounting Practice (JSSAP), which were based on IAS but did not reflect many recent revisions.
• Standards Gap: There is a significant gap between the designed IAS and the standards actually practiced in Jamaica.
• Implementation Challenges: Companies and auditors have raised concerns about the application of specific IAS such as IAS 12, 19, 39, 40, and 41. These concerns may affect compliance.
• Regional Collaboration: There is a case for a regional approach to address these challenges, given the similar concerns in other Caribbean states.
• SME Compliance: ICAJ intends to continue using JSSAP for small companies until an IASB-approved SME version of IAS is available.

Auditing Standards

• Transition to ISA: ICAJ has adopted ISA for audits, with JSA used for earlier periods. The similarity between JSA and ISA suggests minimal impact on current practices.
• Compliance Monitoring: Regulatory bodies such as the Bank of Jamaica, Financial Services Commission, and Jamaica Stock Exchange rely heavily on external auditors to monitor compliance, but lack systematic procedures.
• PAB and ICAJ Role: PAB does not set auditing standards nor monitor the work of registered public accountants. ICAJ also does not monitor audit quality but acts on complaints.
• Regional Monitoring Unit: The Institute of Chartered Accountants of the Caribbean (ICAC) plans to establish a regional monitoring unit to evaluate audit quality across the region, including Jamaica. This unit is expected to start operations in 2003.

Key Information

• Number of Listed Companies: 42, with a total market capitalization of about US$6.6 billion as of June 2003.
• Private Companies: Approximately 40,000 active private companies, most being SMEs.
• Professional Bodies: ICAJ and foreign bodies such as ACCA, ICA Scotland, ICA Ireland, CICA, and AICPA qualify for membership in ICAJ and registration with PAB.
• Continuing Professional Education: ICAJ requires members to complete 35 hours of CPE annually over three years. In 2002, the program included training on IAS and ISA.
• Compliance Issues: Noncompliance with JSSAP was identified in 15 listed companies, including issues related to the recognition of retirement benefits, segment reporting, and financial instruments.
• Policy Recommendations: The report suggests improving institutional capacity, enhancing education and training, and establishing compliance monitoring mechanisms to support the transition to IAS and ISA.

Conclusion

The transition to IAS and ISA in Jamaica is a significant undertaking that requires coordinated efforts among regulatory bodies, professional institutions, and the private sector. While there are challenges, the commitment of key stakeholders and the potential for regional collaboration offer opportunities for successful implementation. Strengthening professional education and compliance monitoring will be crucial in ensuring that the transition leads to improved financial reporting and auditing practices.