SOCPA Completes the Transformation System to International Standards by Adopting the International P

The Saudi Organization for Chartered and Professional Accountants Board of Directors approved the international codes of professional behavior and ethics and in line with the regulatory environment in Saudi Arabia. Dr. Ahmed Al Maghamis, Secretary-General of SOCPA, has stressed the importance of this transformation, which constitutes a qualitative leap in the direction of enhancing the quality of the practices of the accounting and auditing professions in Saudi Arabia, and its consistency with international practices. He explained that this adoption completes the transformation of local standards to be consistent with international ones, which included accounting and auditing standards, quality control, ethics, and professional conduct, and through that, SOCPA seeks to enhance the confidence of users of financial statements and achieve international engagement in a way that contributes to achieving the programs of the Saudi Vision (2030) and supports the foundations for attracting foreign investments, and enhancing the transparency and reliability of financial transactions. Also, this adoption comes in conjunction with the Council of Ministers Resolution to adopt the Accounting and Auditing Professions Law and the Statute of SOCPA. Dr. Ahmed Al Maghamis indicated that the scope of implementation of these Codes comprises all practitioners of the profession of accounting and auditing, whether they are certified accountants or workers in the private and public sectors. Dr. Al Maghamis also indicated that this transformation will add to the Arab libraries a translated version of the international codes that can be used by all practitioners in the Arab world and establishes a basis for communication and contact with the International Board of Ethics and those interested in professional ethics worldwide.

Dr. Maghamis indicated that the time frame for the implementation of the approved international codes will have a deadline of mid-2022, with a possibility of early implementation. He also indicated in this regard that SOCPA will present pronouncement to clarify the mechanism of application of these codes and introductory lectures on its components, as well as updating the work guides for quality control, and studying the amendments approved by the International Board of Ethics for the purposes of implementation in Saudi Arabia and then finally issuing the approved updates.

On converting to international codes, Professor Ahmed Al Shanqeeti, a member of the Professional Ethics Committee and the team leader pointed out that, under the supervision of the Committee, many important steps were taken to reach an agreement on the document, where a working group was formed from members of the Committee and consultations were made with specialized expert advisors in the field of audit and the Sharia and legal fields. The experiences of some countries, including the G20 countries, were studied in terms of applying the codes of professional behavior and ethics. In addition, communication was made with the International Board of Professional Ethics (IESBA), who supported SOCPA's direction and held introductory workshops on international codes as well as nominating its President to participate in the Saudi Accountants Forum, which was held in early 2020 on areas related to the ethics of the profession. In addition, IESBA provided the work team with some related resources and notes related to international frameworks and their details.

Mr. Ahmed Al Shanqeeti explained that the Committee adopted the work on translating the latest version of the international codes (2018 version) and taking into account the similar terminology used in other relevant technical standards, and the work team analyzed and identified issues of professional ethics of importance to the local environment and discussed them with specialists. Al Shanqeeti pointed out that after the draft accreditation document was made through the results of the work, it was presented with the translation of international codes to the public through SOCPA's website, and the work team studied the public views and discussed them through holding discussion sessions and updating the accreditation document accordingly. Finally the draft accreditation document was presented to SOCPA's Board of Directors, and it was approved.

On a related note, the President of the International Board of Ethics, Dr. Stafford Thomadxie, congratulated the Saudi Organization for Chartered and Professional Accountants for this important achievement in approving the implementation of the international code of conduct for the professions of accounting and auditing (including standards of independence) in Saudi Arabia and pointed out that international codes are one of the most comprehensive frameworks for professional ethics and widely used in the world and that many G20 countries have adopted it.  Dr. Thomadxi aspired that the implementation of international codes in Saudi Arabia would achieve the desired goals and that cooperation between the International Board and SOCPA would be strengthened.

In order to introduce the most important components of the international codes and the changes from the current ones, Dr. Yasser Fallatah, advisor to the working group, explained that the international framework is based on a comprehensive conceptual framework to deal with all circumstances that may occur to a professional accountant and threaten the five basic principles of professional ethics, which include integrity, objectivity, confidentiality, professional behavior, professional competence, and due diligence. Dr. Yasser pointed out that the new codes include a special section for workers in the private and public sectors and another section for independence standards in accordance with the international conceptual framework for professional ethics, and they also contain indicative details and determinants of the cases likely to be faced by the professional accountant that creates a threat to the principles of ethics, including cases that professional accountant may face in context to their responsibilities of disclosing cases of law and regulation violations in light of the principle of confidentiality, as well as conditional remuneration and the mechanism for announcing the services of a professional accountant, and the codes clarify the basis for dealing with public interest establishments, including setting time frames for the rotation associated with the audit partner and the work team.  Dr. Fallatah also referred to the importance of the reference framework for professional ethics in Saudi Arabia, which is based on the tolerant Islamic Sharia, as well as the important specific amendments to what is mentioned in the international codes according to what SOCPA considered, which is mainly related to preventing the collection to provide non-assured services to an auditing client and allowing the auditor to provide other assurance services to the audit client according to an approved list (white list) to be prepared and updated by SOCPA on a regular basis in order to enhance the independence of the auditor and take into account the regulations in force in Saudi Arabia.