Updated: Dec 28, 2020
Over the last three weeks, we have been giving our readers insight into what the Institute of Solomon Islands Accountants (ISIA) is and what the Institute does.
We also had a closer look at the institute’s organisational structure and described the functional roles of the Institute’s Secretariat, Subsidiary Committees and Disciplinary Board.
This week, we will be revealing to our readers what the Institute plans to do over the next five year period as it aims to achieve accreditation to and recognition by the International Federation of Accountants (IFAC).
To begin with, this feature article will introduce our readers to IFAC and its role in setting internationally accepted standards and practices for the accounting profession and accountants throughout the world.
This article will then touch on the key requirements for IFAC membership and then discuss how ISIA aims to achieve IFAC membership using a maturity model developed by the Confederation of Asia and Pacific Accountants (CAPA) which ISIA is an Associate Member of.
The IFAC is the global organisation for the accountancy profession, made up of more than 175 member and associate member organisations in 130 countries and jurisdictions, representing nearly 3 million professional accountants.
The purpose of IFAC is to serve the public interest by enhancing the relevance, reputation, and value of the global accountancy profession.
IFAC achieves this purpose by supporting the development of high-quality international standards, promoting the adoption and implementation of these standards, building the capacity of professional accountancy organisations and by speaking out on public interest issues.
In short, IFAC works to prepare a future-ready global accounting profession.
The IFAC has three categories of admission which are Member, Associate and Affiliate.
Each category has its own admission procedure, timeline and entitlements.
The IFAC Council is responsible for setting the admission criteria for each membership category in accordance with the IFAC Constitution and Bylaws.
The IFAC Council is also responsible for approving admissions of Members and Associates based on recommendations from the IFAC Board of Directors (Board). The Board approves admission of Affiliates.
Two of the categories, namely Member and Associate can only admit Professional Accountancy Organisations (PAO) such as ISIA, provided they meet the relevant admission criteria.
PAOs and organisations admitted under each of the membership categories are required to support the mission of IFAC while PAOs that are admitted under the Member category must also meet the requirements of IFAC’s Statement of Obligations (SMO).
The SMOs cover obligations to support the adoption and implementation of international standards and other pronouncements issued by the International Auditing and Assurance Standards Board (IAASB), International Accounting Education Standards Board (IAESB), International Ethics Standards Board for Accountants (IESBA), International Public Sector Accounting Standards Board (IPSASB) and the International Accounting Standards Board (IASB).
Furthermore, the SMOs also obligates member organisations to establish quality assurance, investigation and disciplinary systems.
CAPA Maturity Model
The Institute of Solomon Islands Accountants (ISIA) is currently an Associate Member of the Confederation of Asian and Pacific Accountants (CAPA), and strives to obtain full membership as it continues to implement its strategic plan over the coming 5 years.
CAPA is a regional organisation representing thirty-three national Professional Accountancy Organisations (PAOs) in the Asia-Pacific region, representing nearly 2 million accountants.
CAPA has a unique role within the accountancy profession as it is positioned between IFAC and the national PAOs.
ISIA has adopted the CAPA Maturity Model (2014) to benchmark its development as a PAO against maturity criteria provided under the Model.
The Maturity Model is a support tool that allows PAOs to take a systematic approach to their organisational development, helping them make decisions and carry out their commitment to excellence, easily tracking their progress along the way.
It provides a roadmap for organisation growth based on measurement and improvement of practices and processes, irrespective of a PAO’s current stage of development.
In 2015, ISIA developed its first Strategic Plan 2015 – 2020 based on the framework of CAPA’s Maturity Model which basically focused on four key areas of Sustainability, Relevance, Professionalism, and Member Value. This is the basis for ISIA’s current Medium Term Plans as well as the CEO’s current Workplan.
The Strategic Plan will be reviewed in late 2020, with the intention of updating it to reflect current developments.
ISIA’s Medium Term Strategic Plan includes planned activities that form the platform for ISIA’s focus on sustainability, relevance, professionalism and member value.
More recently, in 2019 ISIA approved a specific plan to achieve IFAC accreditation – “ISIA’s Roadmap to IFAC accreditation by 2025” which corresponds to the Medium Term Plans.
ISIA’s adoption of the Maturity Model is important as it will help the Solomon Islands PAO focus its priorities and objectives to achieve two key outcomes - while improving the standards and practices of private and public accountancy in the country.
The first outcome will be the achievement of ISIA’s vision of becoming a fully functional PAO in the short to medium term to enable it to attain full membership with CAPA thereby elevating its membership status (from an Associate to being a full member), while the second outcome is to see ISIA achieving IFAC accreditation and recognition in the medium term.
The Australian Government has seen the strategic benefit of helping ISIA achieve its short to medium term goals, particularly in terms of achieving an improvement to public sector accounting standards and practices.
Through its Department of Foreign Affairs and External Trade’s (DFAT) Governance Program, the Australian Government is providing funding to help ISIA achieve its vision of becoming a fully functional PAO by 2020 and achieve IFAC accreditation by 2025.