Updated: Nov 27, 2020
Last week, we briefly introduced our readers to the Institute of Solomon Islands Accountants’ (ISIA) structure, roles and responsibilities under the Accountants Act 2010.
In the first weekly article, we briefly touched on ISIA’s public sector responsibilities and elaborated on ISIA’s membership categories and regional responsibilities.
In this article, we will be focusing on ISIA’s roles of regulating and developing Solomon Islands’ private and public sector professional accounting and auditing standards and practices.
The Accountants Act 2010 and Rules made under the Act, will be the key focus of this article.
Key sections of the Act will be referenced to give readers an idea of how the Act influences and prescribes for each of ISIA’s key objectives.
We will also outline how each of these objectives form the basis of ISIA’s core functions as regulator of Solomon Islands’ accounting and auditing practices.
However, perspective is important and a brief history of the institute and of its future plans seems like the most logical place to start.
The Accountants Act: How We Got There
The Institute of Solomon Islands Accountants (ISIA) was initially registered under the Charitable Trust Act in the 1980’s.
The institute got support and recognition by the Government of Solomon Islands with the passage of the Accountants Bill in 2010, paving the way for the formal establishment of the institute and calling for the recognition of the profession in the country and overseas.
The Accountants Bill 2010 governed the establishment of the Institute and has given clear mandates for the implementation and regulation of the profession to grow, develop, and improve both the institute and its members in Solomon Islands.
The Accountants Act 2010 is the key piece of legislation upon which ISIA’s work is based and the Act is constantly reviewed for compliance gaps with current practice in order to ensure that necessary amendments are made if and when they are necessary to ensure that the Act stays relevant.
ISIA’s Governing Framework
ISIA’s mandates under the Accountants Act 2010 are carried through the institute’s 10 objectives, stated in Part 3 Division 1 of the Act.
However, it must be noted that a broader ISIA Governing Framework including the Accountants Act and other rules and policies, work together to ensure that the institute is able to achieve its objectives while ensuring that local practitioners are able to comply with international accounting standards and norms.
ISIA’s Governing Framework includes:
The Accountants Act 2010;
Any regulations and statutory rules made under the Accountants Act;
Rules established by the ISIA Council;
The International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board (IESB) for Accountants and any standards pronouncements issued by the Institute from time to time;
Accountancy standards issued by the international bodies responsible for auditing and financial reporting for private and public sector reporting entities (IAASB, IASB and IPSASB) and any standards pronouncements issued by ISIA from time to time;
The education standards issued by the International Accounting Education Standards Board (IAESB) any standards pronouncements issued by ISIA from time to time; and
The Statements of Membership Obligations issued by the International Federation of Accountants (IFAC) and any standards pronouncements issued by ISIA from time to time.
The first of ISIA’s objectives is to regulate the practice of accountancy, including the registration, discipline and membership of persons eligible under the Act to practice in accountancy and auditing.
The mandate to do this is mainly provided for under Part 2 of the Accountants Act while registration and membership to the institute are provided for under Part 3 of the Act.
Part 4 of the Act provides for a Disciplinary Board which is responsible for carrying out inquiries into complaints against ISIA members and where necessary, enforce disciplinary measures on those members. This function is done in consultation with the institute’s Council and Registration Committee.
ISIA’s second objective is to regulate qualifications, requirements and other conditions for registration of persons and membership of the Institute. This mandate is provided for by the eligibility criteria for member registration under Part 4 Divisions 2 and 3 of the Accountants Act.
ISIA is also required to regulate accounting, auditing and other standards of audited financial statements that comply with national, regional and international standards, including scale of fees and charges as its third objective.
This objective is implemented through standards pronouncements issued by ISIA in consultation with its Standards Committee, and Rules established by the ISIA Council or Rules that are made pursuant to the Accountants Act.
Pronouncements issued by ISIA are in line with code of ethics and accountancy standards issued by relevant international bodies such as the IESB, IAASB, IASB and IPSASB.
ISIA’s fourth objective is to develop and provide training and continuing professional education to its members and registered persons.
This objective and ISIA’s fifth objective, which is to facilitate and assist in the teaching of the discipline of accountancy and auditing at the tertiary level, is aligned with international education standards issued by the International Accounting Education Standards Board (IAESB).
Furthermore, ISIA’s education priorities may also include offering scholarships, prizes and undertaking career expositions and other career or professional exhibitions.
Regulating the professional and ethical conduct and other professional standards of its members and registered persons is ISIA’s sixth objective.
Parts 2 and 3 of the Accountants Act, gives ISIA the mandate to carry out this objective, however, pronouncements by ISIA on the professional and ethical conduct of its members and registered persons are also aligned with the International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board (IESB).
ISIA’s seventh objective is to regulate the management and control of trust funds kept by registered persons for their clients which the institute achieves through statutory rules formulated under Section 14 of the Accountants Act.
ISIA’s remaining 3 objectives are operational in nature and cover research, obtaining and disseminating information relating to national and international developments in the profession of accounting and auditing and the promotion of the interest of its members and registered persons.
One of these final objectives requires ISIA to represent its members and registered persons on matters relating to the profession of accountancy and auditing to the Government and to any national, regional or international body or organisation.
Over the next 2 weeks, we will be looking at ISIA’s structure and how the ISIA Council works with the institute’s statutory committees and Disciplinary Board to carry out the institute’s mandated functions before exploring the institute’s goal and roadmap to full International Federation of Accountants (IFAC) membership by 2025.