INTERVIEW: Ahmad AL-MEGHAMES
Dr. Ahmad AL-MEGHAMES
Secretary-General of the Saudi Organization for Certified Public Accountants
Interview conducted by Riham Hussein, Financial Management Specialist, Governance Global Practice, MENA, The World Bank.
The Saudi Organization for Certified Public Accountants (SOCPA), founded in 1992, works under Royal Decree to “promote the accounting and auditing profession and all matters that might lead to the development of the profession and improve its status”. SOCPA has 5,000 members and has been a leader and active member of the International Federation of Accountants (IFAC). We recently interviewed Dr. Ahmad Al-Meghames, Secretary-General of SOCPA, to discuss current developments in the accounting profession in Saudi Arabia and what role SOCPA is playing. Dr. Al-Meghames completed his Doctorate of Business Administration (DBA) in 1997 from Mississippi State University, majoring in accounting. He taught for a few years at the university level before joining SOCPA as Deputy Secretary-General in 2003. Since 2006, he has taken charge of SOCPA as its Secretary-General.
CV MENA: What would you say is the greatest challenge for young accountants starting their careers in Saudi Arabia?
AA: The major challenge is to find a curriculum that incorporates the international standards (accounting and auditing) into the Arabic language, and to find an Arabic language faculty expert in both the International Financial Reporting Standards (IFRS) and the International Standards on Auditing (ISAs).
CV MENA: What are the challenges facing Micro, Small and Medium Enterprises (MSMEs) in Saudi Arabia in the area of accounting, and what role is SOCPA playing in meeting these challenges?
AA: Training and development in the Arabic language is the biggest challenge. SOCPA is currently working actively in the following areas:
• SOCPA has entered into agreements with leading publishers and other agencies to translate into Arabic some quality books and training materials on IFRS and ISAs.
• SOCPA’s nominee has been appointed to the SME Implementation Group of the International Accounting Standards Board.
• Memoranda of Understanding (MOUs) have been forged with leading world professional accountancy bodies, such as the Institute for Chartered Accountants of England and Wales, the Institute of Chartered Accountants of Pakistan, the Institute of Chartered Accountants of India, and theAssociation of Chartered Certified Accountants.
In addition, the development and capacity building of SMPs will be a focus area for SOCPA in the next few years.
CV MENA: What is the rate of compliance by companies with the International Financial Reporting Standards?
AA: Currently, banks and insurance companies are required to apply IFRS. In addition, SOCPA standards apply to all other companies, listed and unlisted. SOCPA has approved an IFRS convergence plan by which listed entities other than banks and insurance companies would be required to report under IFRS as adopted in Saudi Arabia. The IFRS transition plan is part of a project called ‘SOCPA Project for Transition to International Accounting and Auditing Standards’. SOCPA started the project in 2012, and expects to complete it around 2017. SOCPA’s stated goal for the project is to make a transition toward IFRS after requiring some additional disclosures explaining the nature of transactions for Shariah-conscious users. SOCPA is also translating all of the IFRS into Arabic as part of this project under an agreement with IFRS Foundation.
CV MENA: Can you tell us about your new partnership with The Institute of Chartered Accountants in England and Wales (ICAEW)? What opportunities do you think this will create for your members? Do you have any plans for future partnerships with other international organizations?
AA: Recognizing the importance of mutual cooperation in the development of the profession of accounting and auditing, SOCPA signed an MOU with the ICAEW for the advancement of the accounting and auditing profession. The Memorandum aims to establish closer cooperation in various professional areas, including the conducting of technical research, holding joint professional activities, and providing joint advice to other professional bodies. This agreement will allow for mutual work between the parties to consolidate the Saudi accounting sector and ensure its sustainability through the advancement of accounting knowledge, professional and intellectual development, as well as to increase the number of members of both parties. Furthermore, important initiatives may be developed. Experiences and expertise may be exchanged for the benefit of the accounting sector and its members in the Kingdom, and across the region in the future. After signing this MOU, SOCPA has also signed an MOU with The Institute of Chartered Accountants of India (ICAI). However, the most successful MOU experience has been with The Institute of Chartered Accountants of Pakistan (ICAP), where both the bodies have supported each other in a variety of areas. A major initiative under the MOU with ICAP is a joint conference scheduled for March 2015.
CV MENA: An area of weakness in other countries is usually the Quality Assurance (QA) program. Can you tell us about SOCPA's QA program, and if it has been effective in ensuring a high degree of quality among auditors?
AA: SOCPA’s QA program is one of the most comprehensive programs among the Gulf Cooperation Council (GCC) countries (The GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). It is modeled on the American Institute of Certified Public Accountants (AICPA) program, and almost in line with the requirements of the International Standard on Quality Control (ISQC) 1. In this context, SOCPA is currently reviewing its program and is trying to upgrade it with the help of accountancy bodies, such as ICAEW, ICAP, and so on.
CV MENA: Can you share any news on the upcoming shift to International Public Sector Accounting Standards (IPSAS) which is expected in Saudi Arabia?
AA: In September 2013, the Council of Ministers in Saudi Arabia agreed to apply the Guidance of Governmental Accounting Standards, Objectives, and Concepts, prepared mainly on the basis of the international public sector accounting standards issued by The International Public Sector Accounting Standards Board (IPSASB). This application shall be implemented according to a number of procedures including the formation of a special committee within the General Auditing Bureau consisting of specialists from the General Auditing Bureau, Ministry of Finance, the Institute of Public Administration, the Saudi Organization for Certified Public Accountants, and other bodies that the Committee considers appropriate.
CV MENA: Since assuming the Director-General position, which activities and achievements are you most proud of?
AA: There are a number of achievements and activities to highlight:
1. Becoming the IFAC Professional Accountancy Organization (PAO) Development Committee Deputy Chair.
2. Having the Board of Trustees of the IFRS foundation choose our nominee.
3. Becoming a trusted arm for the Saudi government in areas related to consultation in accounting and auditing.
4. Achieving financial independence for SOCPA.
5. Approval of a SOCPA Project for Transition to International Accounting and Auditing Standards.
6. Approval of an Accounting Standards Project for non-profit organizations.
7. Electronic filing of financial statements under eXtensible Business Reporting Language (XBRL).
8. Using web-based applications to provide our services.
Additional projects under development can be found on SOCPA’s website at: www.socpa.org.sa.