2004年-世界发展银行全球_Hashemite_Kingdom_of_Jordan___Accounting_and_Auditing_17页_363kb

Summary of the Report on the Observance of Standards and Codes (ROSC) in Jordan

Core Content

The Report on the Observance of Standards and Codes (ROSC) in Jordan, dated June 10, 2004, evaluates the country's adherence to international accounting and auditing standards. It highlights Jordan's progress in aligning its financial reporting requirements with IFRS and ISA, as well as the challenges and gaps that remain in the implementation and enforcement of these standards.

Main Points

1. Introduction and Context

• Jordan has made significant strides in aligning its corporate financial reporting with international standards.
• The ROSC report is part of a joint initiative by the World Bank and IMF to assess compliance with global standards.
• Strong financial reporting and transparency are essential for economic development, attracting investment, and improving tax collection.

2. Institutional Framework

A. Statutory Framework

• A new Accountancy Profession Law (73/2003) was enacted in 2003, establishing the High Council for Accounting and Auditing and the Jordanian Association of Certified Public Accountants (JACPA).
• The law is a step forward in regulating the profession but lacks alignment with current global developments and needs refinement.
• The requirement for public interest entities to have a finance manager who is a JACPA member is criticized for emphasizing certification over quality and potentially creating a monopoly.

B. The Profession

• JACPA has 539 members, 350 of whom are in public practice.
• JACPA has gained new powers, including the ability to draft bylaws and inspect members' work, but faces challenges in effectiveness.
• Key issues include:
  • Lack of resources to function as an accountability body.
  • No legal provisions for auditor liability.
  • Weak quality assurance mechanisms.
  • Examination system not meeting IFAC standards.
  • Low interest in JACPA membership among trainees.

C. Professional Education and Training

• The quality of accounting and auditing education in Jordan's public universities is inadequate due to outdated curricula and lack of qualified instructors.
• Postgraduate education is better, as it includes international standards and encourages research.
• Continuing professional education is not required for auditors, leading to a knowledge gap and a need for more structured training.

D. Setting Accounting and Auditing Standards

• There is no legally established body in Jordan for setting accounting and auditing standards.
• Standards are set by regulators such as the Jordan Securities Commission (JSC), Insurance Commission (IC), and Central Bank of Jordan (CBJ).
• The absence of a local standard-setting body leads to inconsistent application of IFRS and ISA.

E. Ensuring Compliance

• The JSC reviews financial statements of listed companies, but its monitoring is limited to form rather than substance.
• CBJ and Insurance Commission are responsible for ensuring compliance with financial reporting standards, but their enforcement mechanisms are weak.
• The lack of effective sanctions and monitoring tools hampers the full implementation of international standards.

Key Issues and Recommendations

Key Issues

• Fragmented regulatory responsibility: Different entities (JSC, CBJ, IC) oversee different sectors, leading to potential gaps in oversight.
• Compliance gaps: Despite efforts, the "compliance gap" remains significant, especially in the application of IFRS and ISA.
• Accounting manipulation risks: There is a concern that financial statements may be misrepresented or manipulated.
• Inadequate enforcement: Weak monitoring and enforcement mechanisms prevent full adherence to international standards.
• Lack of professional ethics: There is no mechanism to ensure that auditors and accountants follow an internationally comparable code of ethics.

Policy Recommendations

• Revisit the Accountancy Profession Law: Clarify ambiguous provisions, especially regarding auditor rotation and the role of ministers in the High Council.
• Strengthen monitoring and enforcement: Develop more comprehensive methods to ensure compliance with international standards.
• Enhance professional education: Update curricula and provide better training for accounting and auditing professionals.
• Implement continuing professional education (CPE): Require auditors to complete at least 30 hours of CPE annually to maintain competence.
• Align financial reporting with IFRS: Ensure that all financial statements, including those of public interest entities, are prepared in accordance with IFRS.
• Improve auditor accountability: Establish clear legal provisions for auditor liability and enhance the effectiveness of quality assurance mechanisms.

Conclusion

Jordan has made notable progress in adopting international accounting and auditing standards, but significant challenges remain in terms of institutional capacity, regulatory coordination, and professional education. The report emphasizes the need for a comprehensive action plan to address these issues and strengthen the financial reporting regime in the country.