September 20, 2019

Historic event as Cayman Islands Financial regulators sign MOU

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The Auditor’s Oversight Authority () and the Cayman Islands Institute of Professional Accountants () have recently executed a memorandum of understanding with respect to co-ordinating quality assurance review visits and inspections and also to ensure no duplication in any investigations or disciplinary cases. There is overlap in the purview of the AOA and where a firm is registered with the AOA due to having market traded, specified or designated company audits, and both bodies are then responsible for ensuring that a system of quality controls is in place although the approaches may differ given the differences in authority. Further, AOA is only concerned with market traded entity audits and to avoid overlap will not include those clients in its quality assurance file reviews.
The Memorandum of Understanding () was signed during CIIPA’s Annual General Meeting at the end of February, marking a historic event between the two organisations.
The Auditors Oversight Law (AO Law) was passed in Cayman in 2011 and established the AOA charged with the functions of regulating and supervising auditors who audit the accounts of market traded, specified or designated companies which includes quality assurance, investigation and disciplinary actions. The AO Law and regime is thus of more limited scope than that of CIIPA but was introduced primarily to secure approval for Cayman as an equivalent third country under the EU Statutory Audit Directive.
The objects of CIIPA include to govern the discipline and regulate the professional conduct of members, promote and protect the welfare and interest of the accounting profession, and promote, foster and maintain the highest standards of accounting in public practice and commercial and private sector spheres. Pursuant to this and as a member of the International Federation of Accountants (IFAC), CIIPA is required to ensure a mandatory quality assurance review program is in place for those of its members performing audits of financial statements.
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