National and International Auditing-Related Institutions: ICAN, INTOSAI, and ASOSAI
Institute of Chartered Accountants of Nepal (ICAN)
Established under the Nepal Chartered Accountants Act, 2053 BS (1997), ICAN is a national-level autonomous institution with perpetual succession, dedicated to developing the accounting profession in Nepal. Headquartered in Kathmandu, it operates branch offices in Biratnagar, Birgunj, Pokhara, Butwal, Nepalgunj, and Dhangadhi. ICAN became an Associate Member of the International Federation of Accountants (IFAC) in 2003 and a full member in 2008.
ICAN regulates the accounting and auditing profession, issues professional certificates, and enhances the profession’s credibility and social recognition.
Example: ICAN issues a Chartered Accountant certificate to a qualified professional, enabling them to audit a private company’s financial statements, ensuring compliance with national standards.
Objectives of ICAN
- Strengthen and develop the accounting and auditing profession, ensuring adherence to ethical standards.
- Raise public awareness of accounting’s importance and professionals’ socio-economic responsibilities.
- Promote accountability and social responsibility among accountants.
- Develop a globally recognized system for registration, qualification, and examination of accountants.
Structure and Governance
ICAN is governed by a 17-member Council, responsible for policy decisions and appointing an Executive Director for four years to implement them. The Council comprises:
- 10 Chartered Accountants elected by members.
- 4 Registered Auditors elected by members.
- 3 members nominated by the Government on the Auditor General’s recommendation, with accounting expertise.
Leadership: The Council elects a President and Vice-President from senior Chartered Accountants (Fellow Chartered Accountants) for a one-year term, renewable once. Council members serve three-year terms and can be re-elected or re-nominated.
Conditions for Removal: Council members cease to hold office if they resign, fail to attend three consecutive meetings without notice, violate the code of conduct, complete their term, or pass away.
Roles and Responsibilities
- Conduct examinations for aspiring accountants.
- Register members and issue professional certificates to qualified individuals.
- Optimize resources for coordinated development of the accounting profession.
- Establish qualifications and training curricula for membership.
- Conduct educational and training programs, independently or with universities.
- Enhance members’ skills through professional development opportunities.
- Monitor compliance with professional codes of conduct.
- Take disciplinary action based on recommendations from the Disciplinary Committee.
- Provide guidance on accounting and auditing standards.
- Ensure compliance with standards set by the Accounting Standards Board and Auditing Standards Board.
- Advise the Government on improving laws related to industry, commerce, finance, revenue, and accounting.
- Join international and regional accounting federations and collaborate with global counterparts.
- Recommend accounting education standards in coordination with universities.
- Organize training, workshops, and seminars for professional development.
- Approve budgets and manage funds.
Departments
- Management
- Examination
- Education
- Financial Administration
- Information Technology
Committees
- Disciplinary Committee: Investigates and acts on code of conduct violations.
- Executive Committee: Manages daily operations under the President’s leadership.
- Examination Committee: Oversees examination processes.
- Professional Guidance Committee: Formulates professional guidelines.
Challenges
- Undue political interference in Council formation.
- Ineffective enforcement of codes of conduct and legal provisions.
- Weak institutional governance and effectiveness.
- Inadequate feedback to the Government for sectoral reforms.
- Lack of harmony between Chartered Accountants and Registered Auditors.
- Failure to update curricula and ensure credible examinations.
- Limited success in raising public awareness and financial accountability.
- Insufficient promotion of accountability among members.
Recommendations
Recommendations:
- Prevent political interference in Council formation through transparent selection processes.
- Strengthen enforcement of ethical and legal standards.
- Enhance institutional governance with robust accountability mechanisms.
- Provide proactive policy recommendations to the Government.
- Foster collaboration between Chartered Accountants and Registered Auditors.
- Regularly update curricula and ensure credible, standardized examinations.
- Promote public awareness campaigns on financial accountability.
- Implement training to enhance members’ accountability and social responsibility.
International Organization of Supreme Audit Institutions (INTOSAI)
INTOSAI, established in 1953 in Havana, Cuba, under the leadership of Dr. Emilio Fernandez Camus, is an autonomous, independent, and non-political global umbrella organization for Supreme Audit Institutions (SAIs). With 195 full members, 5 associate members, and 2 affiliate members, it collaborates with the UN’s Economic and Social Council (ECOSOC). Headquartered in Vienna, Austria, INTOSAI uses six languages (English, French, Arabic, etc.) and operates through seven regional groups, including ASOSAI. Nepal’s Auditor General is an active member since 1968, having participated as an observer in 1965.
Example: Nepal’s Auditor General adopts INTOSAI’s auditing standards to evaluate a national infrastructure project, ensuring transparency and efficiency.
Vision
Promote good governance by enabling SAIs to improve government performance, transparency, accountability, credibility, and anti-corruption efforts, ensuring efficient use of public resources for citizens’ benefit.
Mission
- Foster mutual cooperation and knowledge exchange among members.
- Represent SAIs in international forums.
- Develop and recommend high-quality public sector auditing standards.
- Strengthen governance through robust auditing.
- Promote capacity development and continuous performance improvement of SAIs.
Key Organs
- Congress: Held every three years, chaired by the host SAI, it facilitates knowledge exchange, forms committees, approves budgets, and revises standards. The first Congress was in 1953 (Cuba), and the 24th was in 2022 (Brazil).
- Governing Board: A 20-member executive body, chaired by Bruno Dantas, it approves proposals, monitors Congress decisions, and assigns tasks to regional groups.
- General Secretariat: Led by the Austrian Auditor General, it manages administrative tasks, coordinates activities, and organizes events.
- Goal Committees: Include Professional Standards, Capacity Building, Knowledge Sharing, and Policy, Finance, and Administration Committees, plus the Forum for INTOSAI Professional Pronouncements (FIPP).
- Supervisory Committee on Emerging Issues: Addresses contemporary auditing challenges.
Regional Organizations
- ASOSAI (Asia)
- AFROSAI (Africa)
- ARABOSAI (Arab States)
- CAROSAI (Caribbean)
- EUROSAI (Europe)
- OLACEFS (Latin America and Caribbean)
- PASAI (Pacific)
Roles and Functions
- Develop international auditing standards and principles.
- Promote global coordination for standard implementation.
- Facilitate knowledge and experience sharing among SAIs.
- Support institutional capacity development.
- Encourage research, innovation, and professional ethics in auditing.
- Promote uniform auditing practices.
Challenges
- Ineffective implementation of standards and decisions.
- Insufficient capacity-building opportunities for developing nations.
- Limited activity of committees and forums.
- Lack of prioritization by member governments for INTOSAI standards.
- Inadequate contribution to SAIs’ institutional capacity.
- Lack of regulatory authority to enforce compliance.
- Weak collaboration and coordination among members.
Recommendations
Recommendations:
- Strengthen mechanisms for standard implementation.
- Expand capacity-building programs for developing nations.
- Enhance committee and forum activities.
- Advocate for government prioritization of INTOSAI standards.
- Support SAIs’ institutional development.
- Develop regulatory frameworks for compliance.
- Foster dynamic and continuous member collaboration.
Asian Organization of Supreme Audit Institutions (ASOSAI)
ASOSAI, a regional group of INTOSAI, was established in 1979 following a proposal by the Philippines’ SAI in 1977. It promotes cooperation among Asian SAIs, with 49 members as of now, up from 11 founding members. Nepal served on its Governing Board from 2015–2018.
Objectives
- Promote knowledge exchange and collaboration among members.
- Provide training and education to enhance audit quality.
- Serve as a regional liaison and information hub for public auditing.
- Foster fraternity and cooperation with global SAIs.
Key Organs
- Assembly: Held every three years, it sets policies, elects leadership, and forms committees. Voting requires a simple majority, with each member (except associates) having one vote.
- Governing Board: An 11-member executive body, it implements policies and monitors activities. Its 76th meeting was held in Brazil in 2022.
- Secretariat: Led by a General Secretary elected by the Assembly, it manages administrative tasks and information.
- Capacity Development Committee: Focuses on training and skill enhancement.
- Working Groups: Address specific auditing issues.
- Audit Committee: Oversees audit activities.
Functions
- Encourage audit-related research and publications.
- Organize conferences and seminars for knowledge sharing.
- Support organizational objectives through various activities.
Membership
- Charter Members: Original signatories to the ASOSAI Charter.
- Members: Asian and Pacific SAIs within INTOSAI.
- Associate Members: Asian SAIs awaiting INTOSAI membership.
Institutional Comparison
| Institution | Scope | Key Roles |
|---|---|---|
| ICAN | National (Nepal) | Regulate accounting profession, issue certificates, ensure ethical standards |
| INTOSAI | Global | Develop auditing standards, promote SAI capacity, foster global cooperation |
| ASOSAI | Regional (Asia) | Enhance regional SAI collaboration, provide training, share knowledge |
Conclusion
ICAN, INTOSAI, and ASOSAI play pivotal roles in strengthening the accounting and auditing profession at national, regional, and global levels. Addressing challenges like political interference, weak enforcement, and limited capacity-building can enhance their effectiveness, ensuring transparency, accountability, and good governance.
References
- Nepal Chartered Accountants Act, 2053 BS (1997)
- INTOSAI Official Website
- ASOSAI Official Documents