What you need to know:
- The amendments, which came into force with the signing into law of the Finance Act 2018, are intended to strengthen the accounting profession
- Edwin Makori, the ICPAK chief executive, said there has been rampant abuse of the designation by thousands of practitioners despite the fact that Kenya has only 22,000 duly qualified and registered accountants.
Thousands of people working as accountants without the required professional registration now face hefty fines and jail terms following the coming into force of a new law regulating the practice.
The Institute of Certified Public Accountants of Kenya (ICPAK) says the law, which is intended to rid the industry of quacks, is the product of amendments to the Accountants Act Number 15 of 2008.
The amendments, which came into force with the signing into law of the Finance Act 2018, are intended to strengthen the accounting profession and make it part of the instruments Kenya can use in the ongoing fight against theft and wastage of public funds.
In a press statement released Tuesday, ICPAK promised to be firm in the fight against rogue practitioners, whose work has given the profession a bad name, including those illegally using the “Certified Public Accountant (CPA)” designation.
Edwin Makori, the ICPAK chief executive, said there has been rampant abuse of the designation by thousands of practitioners despite the fact that Kenya has only 22,000 duly qualified and registered accountants.
“There are only 22,000 persons recognised in law as professionals in accountancy. The rest performing roles of accountancy should not be referred to as accountants,” Mr Makori, said adding that the Finance Act 2018 had amended the definition of an “accountant” – making clear who can use the designation.
“The law now provides that an “accountant" is a person registered under Section 24 of the Accountants Act, in line with expertise achieved through formal education and practical experience,” Mr Makori said.
Besides, practitioners of accounting are expected to be held to “a high professional standard in respect of demonstrating and maintaining competence in accountancy in line with international accounting standards.”
In amending the relevant law, Parliament has enhanced penalties for abuse or wrongful use of the designation, including a fine not exceeding Sh2 million, and, in the case of a continuing offence, a further fine not exceeding Sh2,000 for each day that the offence continues.
Mr Makori warned employers and the general public against hiring quacks or allowing those who are not qualified to use designations in the accountancy profession without proper certification.
Kenya’s accounting fraternity has in recent years been on the spot following revelations that some public listed companies and commercial banks used creative accounting to conceal their real financial status – leading to their sudden collapse.
Imperial Bank, Dubai Bank, Mumias Sugar, Kenya Airways and Uchumi Supermarkets have at various points gone into financial trouble without their auditors raising the alarm.