According to the 2004 World Bank assessment (updated in 2006), Tunisia has two professional accountancy bodies that are authorized to conduct statutory audits. Originally, the Institute of Chartered Accountants (Ordre des Experts Comptables de Tunisie, or OECT) had the exclusive right to conduct audits, but this right was later extended to another professional body, the Society of Accountants. The OECT adopted International Standards on Auditing (ISAs) in 1999, effective for periods beginning in 2000. Prior to the adoption of ISAs, the OECT issued auditing standards which, according to the World Bank, were "seriously deficient." This prompted Tunisia to switch to international standards. The Society of Accountants, on the other hand, has never adopted ISAs. This has raised concerns about the quality of audits performed by this organization. The World Bank recommended all statutory audits be conducted in accordance with ISAs. It also pointed out discrepancies in the legal and regulatory framework, stressed the necessity to resolve these discrepancies, and recommended upgrading academic and professional education and training.

General Overview

From September to December 2003 the World Bank conducted a review of accounting, auditing and financial reporting practices in Tunisia in order to evaluate their weaknesses and strengths and to review the reporting requirements against actual practices. International Financial Reporting Standards (IFRSs), International Standards on Auditing (ISAs) and relevant portions of European Union law were used as benchmarks for assessing national standards. The findings were presented in the Report on the Observance of Standards and Codes (ROSC) which was first published in May 2004. Later, in October 2006, an updated final version was reprinted. In this report, the World Bank pointed out that two professional accountancy bodies are authorized to conduct statutory audits in Tunisia. Originally, the Institute of Chartered Accountants (Ordre des Experts Comptables de Tunisie, or OECT) had the exclusive right to conduct audits. This right was later extended to another professional body, the Society of Accountants (Techniciens en Comtabilite). While the OECT adopted ISAs in 1999 effective for periods beginning 2000, the Society of Accountants has not adopted ISAs, and there is no information on whether they plan to do so in the future. The 2007 OECT self-assessment confirmed that the Institute adopts pronouncements issued by the International Auditing and Assurance Standards Board (IAASB). Prior to the adoption of ISAs, between 1984 and 1990, the OECT issued auditing standards which, according to the World Bank, were "seriously deficient." These weaknesses in the national standards ultimately aided Tunisia's transition to ISAs. The World Bank recommended that all statutory audits should be conducted in accordance with ISAs.

As described in the World Bank's ROSC, Tunisian accounting and auditing practices are governed by the Commercial Code, the Law on Commercial Companies, the Law on the Enterprise Accounting System, the Law on the Chartered Accountancy Profession, the Law on the Financial Market, the Law on Credit Institutions, the Insurance Law, the Law on Undertakings for Collective Investment, and Decree No. 87-529 on Statutory Audits in Government Business Enterprises. Subject to certain criteria, the Law on Commercial Companies requires a statutory auditor be appointed by all joint-stock companies and all limited-liability companies. The Law "includes specific mechanisms that provide additional safeguards to auditor's independence" (p. 4). However, the report pointed out that this Law also allows certain companies (subject to pre-determined criteria) to appoint accountants registered with the Society of Accountants. As noted earlier, this body has not adopted ISAs, and the World Bank was unable to determine the auditing standards that the Society does, in fact, apply. Further, the World Bank stated that "the Law on Commercial Companies conflict with certain ISA requirements" (p. 18) specifically with regard to auditor opinion. Overall, the World Bank recommended amending appropriate laws and regulations in order to improve the accounting and auditing environment in Tunisia.

The Tunisian securities market is regulated by the Financial Market Council (Conseil du Marche Financier, or CMF). Governed by the Law on the Financial Market, joint-stock companies raising funds from the public are required to file audited financial statements with the CMF and the Tunis Stock Exchange (Bourse des Valeurs Mobilieres de Tunis). However, the World Bank noted that "the legislation does not include any specific mechanism to further strengthen requirements concerning audits in companies raising funds from the public, including listed companies" (p. 6). Additional audit-related legal requirements have been laid out for credit institutions, insurance undertakings, undertakings for collective investment, and other companies raising funds from the public. The report also observed that the CMF needed to improve its monitoring and enforcement arrangements with regard to financial reporting.

The Central Bank of Tunisia (Banque Centrale de Tunisie, or BCT) regulates credit institutions and, per the Law on Credit Institutions, the statutory auditor reports to the BCT on matters concerning any threats to credit institutions or depositors. Additionally, credit institutions are required to publish their audited financial statements in the Official Journal of the Republic of Tunisia and the Official Bulletin of the Council of the Financial Market within four months of the fiscal year end. Governed by the Insurance Law, insurance companies in Tunisia are supervised by the Ministry of Finance and are required to publish their audited financial statements in the Official Journal of the Republic of Tunisia and in two daily newspapers.

The OECT was established by the Law on the Chartered Accountancy Profession in 1988, and the World Bank noted that Tunisia was a "forerunner" in the field of public oversight of the audit profession, particularly at a time, "when most developed economies were still embracing the concept of self-regulation of the audit profession" (p. 12). The Society of Accountants was established by Law No. 16-2002 on the accounting profession. The World Bank pointed out that "the mandate of the Institute and the Society does not explicitly include serving the public interest" (p. 7) and recommended that these bodies both formally endorse and follow such a mandate. Chartered accountants must comply with the ethics requirements laid out in the Code of Professional Duties. The OECT is listed as a member on the International Federation of Accountants website.

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

II

According to the 2004 World Bank report, the OECT adopted ISAs in 1999 which became applicable from 2000. However, the IAASB subsequently revised many of the ISAs, and there is insufficient publicly available information whether Tunisia has incorporated these changes.

ISA 210 Terms of Audit Engagements (effective 2006)

II

See ISA 200.

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

II

See ISA 200.

ISA 230R Documentation (effective 2006)

II

See ISA 200.

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

II

See ISA 200.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

II

See ISA 200.

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

II

See ISA 200.

ISA 300 Planning an Audit of Financial Statements (effective 2004)

II

See ISA 200.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

II

See ISA 200.

ISA 320 Audit Materiality (effective 2004)

II

See ISA 200.

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

II

See ISA 200.

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

II

See ISA 200.

ISA 500 Audit Evidence (effective 2004)

II

See ISA 200.

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

II

See ISA 200.

ISA 505 External Confirmations (effective 2004)

II

See ISA 200.

ISA 510 Initial Engagements — Opening Balances (effective 2004)

II

See ISA 200.

ISA 520 Analytical Procedures (effective 2004)

II

See ISA 200.

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

II

See ISA 200.

ISA 540 Audit of Accounting Estimates (effective 2004)

II

See ISA 200.

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

II

See ISA 200.

ISA 550 Related Parties (effective 2004)

II

See ISA 200.

ISA 560 Subsequent Events (effective 2006)

II

See ISA 200.

ISA 570 Going Concern (effective 2004)

II

See ISA 200.

ISA 580 Management Representations (effective 2004)

II

See ISA 200.

ISA 600 Using the Work of Another Auditor (effective)

II

See ISA 200.

ISA 610 Considering the Work of Internal Auditing (effective 2004)

II

See ISA 200.

ISA 620 Using the Work of an Expert (effective 2005)

II

See ISA 200.

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

II

See ISA 200.

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

II

See ISA 200.

ISA 710 Comparatives (effective 2004)

II

See ISA 200.

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

II

See ISA 200.

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

II

See ISA 200.