IFRS በኢትዮጲያ

IFRS in ETHIOPIA
Pre IFRS
No enforceable national accounting standard
Certain regulatory requirements like NBE, ECX, OFAG, MOR
Limited number of professionals
Gaps b/n accounting graduates & practices
Financial report purposes (for NBE, MOR, Banks(creditors))
Asian countries financial crisis 1997/8 (Taiwan, S.Korea, Japan, China) 1997/8.
Report on Observance of Standards & Codes (ROSC) is a joint initiative World Bank & IMF.
It helps member countries strengthen their financial systems, enhance countries’ resilience to shocks & to support their risk assessment and investment decisions.

The 12 areas are data transparency, fiscal transparency, monetary and financial policy transparency, banking supervision, securities, insurance, payments systems, anti–money laundering and combating financial terrorism, corporate governance, accounting and auditing, and insolvency and creditor rights.

ROSC Accounting and Auditing
Review & evaluates a country’s accounting & auditing standards & practices using International benchmarks.

In Ethiopia, the ROSC A&A review was conducted from Sep to Nov 2007 in consultation with:
Ministry of Finance and Economic Development
Ministry of Capacity Building,
Ministry of Trade & Industry,
Ministry of Justice,
Office of the Federal Auditor General
Federal Inland Revenue Authority/ERCA/MoR,
National Bank of Ethiopia,
Addis Ababa Chamber of Commerce and Sectorial Association,
Addis Ababa University,
Ethiopian Civil Service College,
Ethiopian Professional Association of Accountants and Auditors,
Ethiopia Branch Office of Association of Chartered Certified Accountants,
Audit firms, Banks, Insurance Companies
State-owned Enterprises,
Nongovernmental Organizations,
Accountants, Lawyers, and Academics, etc

The sample of 35 sets of audited f/stt comprised

17s applied IFRS, 10s applied GAAP not defined, while 8s did not indicate applying any principles/standards.

7 banks (2 state-owned),
6 insurance companies (1 state-owned),
2 microfinance institutions,
1 privately owned share company,
17 other state-owned enterprises,
2 NGOs

D/c b/n accounting practices in Ethiopia and IFRS requirements.
Presentation of financial statements,
Inventories,
Cash flow statement,
Events after balance sheet date,
Income Taxes,
Property, plant and equipment,
Leases,
Employee benefits,
The effect of changes in foreign exchange rate,
Related party disclosures,
Financial instruments presentation

Findings
The number of professional accountants is low in relation to the size of the economy
The Office of the Federal Auditor General has other broader responsibilities (audit and inspect the accounts of ministries and other agencies of the Federal Government)
No accounting and auditing standards
Lack of uniformity of curriculum across colleges & universities
No litigation on financial reporting
No legal requirement for auditors to have professional indemnity insurance (Negligence, Misrepresentation, Inaccurate advice, Violation of good faith & fair dealing)

Policy Recommendations
Revise the Commercial Code
Enact a financial reporting law
Establish a National Accountants and Auditors Board
Assist universities and colleges to update their curricula
Conduct awareness campaigns and related programs

Ethiopian Gov’t Policy Actions
Establishment of Accounting and Auditing Board of Ethiopia (AABE) as per Council of Ministers Regulation NO. 332/2014
Issuance of Financial Reporting Proclamation No. 847/2014, adopt IFRS;
Directing Auditors to follow International Standards of Auditing (ISA).
License Accountants &Auditors
Revised curriculum

Accounting and Auditing Board of Ethiopia (AABE)
Autonomous government organ accountable to Ministry of Finance & Economic Cooperation (MoFEC);

It is headed by the Director General.
It has 12-member BoDs
Representative from the following :
MoFEC 2. MoE
3. OFAG 4. MoT
5. NBE 6. MOR
7. MoJ 8. ECXA
9. EPAAA 10. ASE
11. ECCSA (2)

References
Ethiopia – Accounting and Auditing ROSC 2007
OFAG proclamation no.68-1997
Regulation-no-332-2014-establishment and determination of-the-procedure of the accounting and auditing board of Ethiopia
Financial Reporting Proclamation 847-2014