RESTRICTED
WORLD TRADE S/WPPS/W/7/Add.27
3April 1997
ORGANIZATION(97-1376)
Original: English Working Party onProfessional Services
COMMUNICATION FROM CYPRUS
Response totheQuestionnaire ontheAccountancy Sector
Thefollowing communication iscirculated attherequest ofCyprus.
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I. GENERAL
1. What aretheprofessional titles ofaccountants inyour country? Arethese professional
titles protected? Please specify how.
NoCypriot titlesexist. NoCypriot titlesexistbecause theBritish legislation hasbeenadopted,
according towhich onlytheBritish professional titles(Institute ofChartered Accountants inEngland
andWales -ICAEW, ICAScotland, ICAIreland, Chartered Association ofCertified Accountants -
CACA) arerecognized andaccepted. Other titles areaccepted iftheCouncil ofMinisters decides
accordingly.
2. How istheaccountancy sector regulated inyour country: bylaw,professional self-
regulation, acombination ofboth?
Notregulated asyet.Weareintheprocess ofintroducing anewlegislation inlinewithEU
directives which willprovide fortheestablishment ofanewCouncil, responsible forallsuchregulating
anddisciplinary matters.
3. Arethere anyprovisions toprotect company names, whether national orforeign, inyour
country?
Yes,there are.
4. What aretheprofessional bodies inyour country? Aretheyrecognized bylawasa
regulatory ordisciplinary body fortheaccountancy profession inyour country, orarethese
functions fulfilled byother institutions (please specify)?
TheInstitute ofCertified Public Accountants ofCyprus (ICPAC) isthebodyrepresenting the
profession inCyprus.
TheICPAC isnotrecognized bylawbutallthemembers areprofessionally qualified inforeign
countries andtheyareanswerable totheirrespective professional bodies e.g.ICAEW, CACA etc.
TheStock Exchange Lawindirectly recognized theICPAC.S/WPPS/W/7/Add.27
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5. Howmany members dothese professional bodies have? What istheestimated proportion
ofthose?
Thisprofessional body(ICPAC) has805members ofwhich: 77.5percentinpublic practice,
8.8percentinindustry orcommerce, 10.8percentinthepublic sector, 0.8percentineducation
and2.1percentunoccupied (retired, etc.).
6. What isthescope ofactivities regularly practised byaccountants inyour country?
Thescope ofactivities regularly practised byaccountants inourcountry is:
(1) Statutory audit;
(2) audit ofmergers;
(3) audit ofcontributions inkind;
(4) public sector audit;
(5) other audits;
(6) accounting;
(7) insolvency practice;
(8) taxadvice;
(9) taxrepresentation;
(10) investment advice;
(11) consulting;
(12) expert witness inaccounting;
(13) other.
7. Which ofthese activities areregulated inyour country?
Statutory audit, audit ofmergers, public sector audit, insolvency practice, taxrepresentation
andinvestment advice aretheactivities which areregulated inourcountry.
8. Which ofthese activities arereserved bylawtoaccountants, shared byaccountants with
other professions (please specify), orevenforbidden toaccountants inyourcountry, e.g.byfull
prohibition orbynotallowing cumulation ofcertain activities which areconsidered incompatible
ormutually exclusive?
Statutory audit, audit ofmergers andpublic sector audit arereserved bylawtoaccountants
andinsolvency practice isshared byaccountants andlawyers.S/WPPS/W/7/Add.27
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II. QUALIFICATION REQUIREMENTS
9. What arethequalification requirements forthese activities inyour country interms of
university/higher education degree, practice andprofessional exam? Specify thenumber ofyears
required foreachelement, andthedifferences according totheactivities (audit, insolvency, tax,
etc.)covered bythequalification.
According topresent legislation theeligible person should beamember ofthefollowing bodies:
(1) ICAEW;
(2) ICAScotland;
(3) ICAIreland;
(4) Chartered Association ofCertified Accountants.
TheCouncil ofMinisters mayapprove members ofother international bodies which maybe
considered equivalent totheabove.
10. Arethere anypreconditions tomeet tostart theprofessional education: minimum age,
particular diploma ortitle, prior education, registration withaprofessional body, payment of
afee,other (please specify)?
Theproposed legislation includes provisions forthese conditions.
11. What arethesubjects tobecovered bytheeducation: accounting, audit, tax,general
law,economics, ethics, information technology, other (please specify)?
Allthesubjects mentioned arecovered bythesyllabus oftheprofessional bodies thatour
members arerequired toberegistered with.
Theproposed legislation willprovide forallthese subjects.
III. TECHNICAL STANDARDS AND ETHICS
12. Inrelation towhich activities donational standards exist(audit, accounting, insolvency,
other)? Please specify their main policy objectives.
Atpresent nonational standards existbutweclosely follow theInternational Auditing and
Accounting Standards.
13. Which body orinstitution develops these standards andmonitors their implementation?
What aretheconsequences ofabreach ofthestandards (fortheprofessional, forclients, etc.)?
TheICPAC alsodevelops accounting andauditing standards inareas where therespective
internationalstandardshavenotbeenset.Breachofthesestandardsmaycausethemembertobeexpelled
from theInstitute.S/WPPS/W/7/Add.27
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14. Aretheinternational standards developed byIFAC (International Education Standards
andGuidelines, International Standards onAuditing) andIASC (International Accounting
Standards) recognized orusedinyourcountry? Ifyes,please explain how. Ifno,please explain
why.
Yes,theIFAC andIASC Standards areclosely followed byallpractising accountants. The
ICPAC circulates these standards toitsmembers onaregular basis andthemembers areobliged to
useandfollow them. InthecaseoftheStock Exchange itismandatory.
15. Inrelation towhich activities does aparticular ethical code exist (audit, accounting,
insolvency, other)? Please specify itsmain policy objectives.
Ethical codeexists forthemembers oftheICPAC inrelation toallsubjects mentioned. The
main policy objective istosecure impartiality objectivity, independency andprofessionalism among
themembers intheexecution oftheirduties.
16. Which body orinstitution develops thiscode andmonitors itsimplementation? What
aretheconsequences incaseofbreach oftheEthical Code byaprofessional orafirm?
TheICPAC develops andmonitors theimplementation oftheEthical Code. Incaseofbreach
oftheEthical Code several penalties maybeimposed including expulsion from theInstitute.
17. Arethere restrictions onmarketing, solicitation, advertising?
TheICPAC issues specific rules inthisrespect.
18. Arethere restrictions onfee-setting (minimum/maximum levels imposed, indicative scale,
etc.)?
No.
IV. LICENSING REQUIREMENTS AND PROCEDURES
19. Apart from thequalification requirements, what arethelicensing requirements for
individuals inyour country?
Apart from thequalification requirements, thelicensing requirements forindividuals inour
country are:membership inaprofessional body, registration withtheMinistry andabsence ofany
criminal record.
20. Arethere anyconditions imposed tobeeligible formembership oftherelevant professional
body(ies)? Please specify.
Tobeeligible formembership intheICPAC itisrequired tobeamember ofthefollowing
professional bodies:
(1) ICAEW;
(2) ICAScotland;
(3) ICAIreland;S/WPPS/W/7/Add.27
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(4) CACA orequivalent totheabove.
21. Arethere specific licensing requirements forprofessional firms?
Noapplicable provisions.
22. Cananapplication forlicensing befiledatanytimeoftheyearorarethere specific dates
torespect? How longdoesittaketocomplete thewhole licensing procedure? Please specify in
caseofdifferences between individuals andfirms.
Notapplicable.
23. Arethere differences interms oflicensing requirements and/or procedures, according
totheactivities covered bythelicence (audit, insolvency, etc.)? Please specify. What kindof
documentation isnecessary/accepted? Aredocuments issued inother countries acceptable? Please
specify.
Notapplicable.
24. What happens when thelicensing conditions arenolonger respected bytheindividual
orthefirm?
Notapplicable.
V. RECOGNITION OFQUALIFICATIONS
25. Arethere anypossibilities fortaking account ofqualifications acquired byforeign
professionals inanother country? Arethere bilateral agreements withother countries inthis
respect?
Theproposed legislation (seeanswer toquestion 2)provides thatholders ofcertain foreign
qualifications maybeeligible forregistration asmembers oftheCypriot Council tobeestablished,
subject tocertain requirements. Thelegislation hasbeendrafted taking account oftheEuropean
Directives inthismatter.
26. Arethere anyautomatic recognition ormutual recognition agreements between your
professional bodies andtheir counterparts inother countries? Ifso,please specify themain
characteristics ofsuchagreements; ifnot,please explain why.
Notapplicable.
27. Where possibilities oftaking account offoreign qualifications exist, isafulllocal
examination oralocaltraining exceeding 12months required? Please specify. Isalocallicence
always necessary topractice aregulated accountancy activity? Please specify when thisisnot
thecase.
Theproposed legislation provides thatfuture holders offoreign qualifications willbeexempted
from certain examinations.
28. What aretheaccreditation/licensing requirements imposed onforeign professionals
authorized topractice intheir home country? Maycertain (regulated) activities becarried out
onthebasis ofaforeign licence?S/WPPS/W/7/Add.27
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TheproposedlegislationprovidesthatprofessionalswhoarecitizensofCyprusorofanycountry,
member oftheEuropean Union, willbeeligible formembership intheCypriot Council. Other foreign
professionals willhavetoobtain permission foremployment inaccordance withother government
regulations.
VI. REGULATIONSGOVERNINGTHEESTABLISHMENTOFACOMME RCIALPRESENCE
29. Arethere anyrestrictions ontheform under which onecanestablish (partnership,
incorporation, other)? Please specify.
There arenorestrictions ontheform under which onecanestablish partnership, orbusiness
name foraslongastheyarenotestablished foranillegal purpose andtheyfollow theformalities
requested bytherelevant legislation.
30. Arethere restrictions onforeign direct investment andownership, including restrictions
applying tonotlocally qualified individuals orfirms? Please specify.
ForeigndirectinvestmentandownershiprequireaCentralBankpermit.Therearenorestrictions
applying tonotlocally qualified individuals orfirms except forlawyers (whomustpassanexamination
onthenational law)andaccountants.
31. Isthere arequirement ofaminimum number orpercentage oflocal directors, managers
orstaff(please specify)?
Nothere isnominimum number orpercentage oflocaldirectors andmanagers, butalways
subject toCentral Bank permission.
32. Arethere restrictions ontheability oflocally established firms todevelop international
relations (membership ofaninternational network, association withforeign firms, etc.)? Please
specify.
No,there arenosuchrestrictions.
33. Istheuseofinternational orforeign names restricted forfirms?
No,there arenosuchrestrictions. Infactalltheinternational bigfirms andmany smaller
haveaffiliates ontheisland.
VII. REGULATIONS GOVERNING THEENTRY AND TEMPORARY STAY OFNATURAL
PERSONS FOR THE PURPOSE OFSUPPLYING ACCOUNTANCY SERVICES
34. Istheentryandstayofprofessionalssubjecttolabourmarkettestsoranyotherrestrictions?
Please specify.
Yes. Theentry andstayofprofessionals inorder totakeupemployment ortoprovide
accountancy services issubject torestrictions which arerelated interaliatothelabour market situation
inCyprus.
Thelegislation relating tothissubject, istheAliens andImmigration Law, andRegulations
which areimplemented bytheMinistry ofInterior. According totheprocedure followed, theMigration
Officer maygrant apermit forentry andemployment toanalienafteradvice given bytheEmployment
ServicesoftheMinistryofLabourandSocialInsurance,regardingthelabourmarketsituationinCyprus.S/WPPS/W/7/Add.27
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Thisprocedure isnotfollowed inthecaseofdirectors andother managerial officers ofoffshore
companies forwhom nolabour market testsareapplied.
35. Isthere anyprocedure facilitating thetemporary entry andstayofprofessionals tosupply
accountancy services? Please explain.
There isnospecial procedure forprofessionals inaccounting. TheMinistry ofLabour and
Social Insurance andtheMinistry ofInterior follow aprocedure which applies foranycategory of
workers orprofessionals.
36. Arethereanyrestrictionsonhiringoflocalprofessionalsbyforeignfirmsandprofessionals?
Please explain.
There arenorestrictions onhiring oflocalprofessionals byforeign firms andprofessionals.
Onthecontrary suchemployment isencouraged bytheMinistry ofLabour andSocial Insurance.
VIII. NATIONALITY/RESIDENCE REQUIREMENTS
37. Isacondition ofnationality/citizenship imposed topractice certain activities, tostartan
education, toobtain alicence, tobecome amember ofaprofessional body, etc.? Please specify.
Notapplicable.
38. Isacondition ofestablishment, prior residency orresidency imposed topractice certain
activities, toobtain alicence, tobecome amember ofaprofessional body, etc.? Please specify
theconditions andthedefinition ofestablishment, residency, etc.when relevant. Isitpossible
tohave aprofessional establishment inmore thanonecountry?
Notapplicable.