LETTERS: Change to Accountants Act signals new dawn

From left, Institute of Certified Public Accountants of Kenya CEO Edwin Makori, chairman Julius Mwatu and senior manager, registration and compliance Nebart Avutswa at the 2018/2019 budget review media conference in Nairobi. FILE PHOTO | NMG

Professional accountants have something to celebrate as far as amendments to the Accountants Act No 5 of 2008 is concerned. The first Act came into force in 1978 and was subsequently revised in 2008. Since then there have been various changes in social, political and economic landscapes that necessitated these amendments.

The significant changes were achieved through the Finance Act 2018. The Act amended the definition of an accountant which was previously ambiguous and constrained the application of the Act. To cure this mischief, the new definition provides that this is a person registered as an accountant under Section 24 of the Accountant Act and is a member as defined in section 4 (2) (a) and (b) with expertise achieved through formal education and practical experience and shall be held to a high professional standard.

Accountancy is now defined to include professional practice, financial reporting, control systems, systems auditing, auditing, assurance, forensic accounting and auditing, finance, financial management, public finance management, taxation, financial risk management, management accounting and advisory services related thereto. This revised definition recognises the growth in accountancy over the years and extends regulation to emerging areas.

Students intending to pursue accountancy examinations administered by KASNEB will be required to first register with the institute. The Examinations Board will prior to registering a person for accountancy examinations, require that he be registered as a member of the Institute of Certified Public Accountants of Kenya (ICPAK).

The person will then be referred to as a trainee accountant. The amended Act defines a this as a person registered by the Examinations Board and who has commenced professional accountancy education or training or is practising accountancy as part of initial professional development required for qualification. He will also be subjected to practical training by the institute before completing their examinations.

This will ensure that the trainee accountant is monitored by ICPAK to ensure adherence to code of ethics of professional accountants as well as ensure acquisition of relevant professional and work experiences through the practical trainee accountant framework (TAPEF) chaperoned by ICPAK and KASNEB. The new requirement is also in tandem with that of the International Accounting Education Standards Board (IAESB) issued last year.

Accountants in Kenya have been operating without a remuneration framework to guide them on what to charge for various services and specialties. This exposed them to unregulated regime which led to inconsistencies on charges. But the amended Act now empowers the Treasury Cabinet Secretary on the advice of ICPAK council to prescribe a remuneration order. The institute is confident that this provision will not only provide consistency and predictability among the practising professionals but will insulate users of their services from vagaries of unregulated fee regime.

Accountants have often been on the receiving end in graft- related cases. They have been accused of being complacent and passive participants in these heinous economic crimes. To address this problem, the amendment provides a new section that protects them from retaliation from employers and clients in case they detect and inform authorities on such malpractices.

Section 30 introduces several sub sections that give effect to this requirement. Subsection (2)— (2A) requires and obligates an accountant to observe the ethical guidelines and applicable standards in the discharge of duty. Subsection (2B) states that the ethical guidelines and applicable standards of the accountancy profession shall take precedence over any instructions from a client or other person. The institute’s amendments have enhanced fines to a new threshold. The amendments enhance these fines up to a maximum of Sh2 million depending on the severity of professional misconduct.

The leadership of the Institute of Certified Public Accountants of Kenya believes these amendments present a new dawn for the profession in Kenya. Kenyans can expect a more responsive, professional and expansive accountancy services from our members.

Julius Mwatu, chairman, Institute of Certified Public Accountants of Kenya.

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