The Institute of Certified Public Accountants of Kenya (ICPAK) has voiced its opposition to the Retirement Benefits Authority (RBA) plans to ammend Retirement Benefits Regulations.
In a notice published in local dailies, ICPAK observed that the proposed amendments contained in Legal Notice 18 of 2024 including; valuation of plan assets and proposed changes to accounting for exchange losses are ill-advised.
The body warned that should the amendments sail through, it could lead to non-compliance with International Financial Reporting Standards and undermine Kenya's standing in the global accounting landscape.
"Non-compliance with International Financial Reporting Standards will result in qualified auditors' reports on the financial statements of Retirement Benefits Schemes in Kenya," ICPAK stated.
A qualified opinion in accounting means auditors have reservations about certain aspects of a company or organisation's financial statements, suggesting potential issues but not major errors.
This comes after RBA, on January 19, issued a notice outlining its intentions to make changes to the two provisions. The body, however, did not specify its reasons for wanting to pivot from the current regulations.
"In a significant development for the retirement benefits industry, Legal Notice No. 18 of 2024 has introduced amendments to the existing Retirement Benefits (Managers and Custodians) Regulations," RBA stated.
In ICPAK's opinion, RBA precluded the determination that retirees under their cover may plan for investments.
As a means to find a resolution to the contested amendments, ICPAK proposed a joint session with RBA which the body pointed out will go a long way in coming to an amicable understanding.
According to the International Accounting Standard (IAS), disclosure principles for the reports of retirement benefit plans should include a statement of changes in net assets available for benefits.
Furthermore, a summary of significant accounting policies, a description of the plan and the effect of any changes in the plan during the period under review should also be provided.
Meanwhile, RBA has instructed different stakeholders to familiarize themselves with the proposed amendments.
