Monday, January 23, 2023
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BusinessFed rescinds region’s mandate to issue license for auditors, accountants

Fed rescinds region’s mandate to issue license for auditors, accountants

Regional states are no longer allowed to issue a license to accountants and auditors, effective as of the newly started fiscal year.

A trustee mandate to license accounting industry experts was handed to regional authorities for more than five years. However, the trustee authority that the Ministry of Finance had granted to the regions has been rescinded beginning from 2022/23 fiscal year.

The move establishes the Accounting Board of Ethiopia as the sole institution with the authority to register and renew the licenses of accountants and auditors throughout the country.

“Regions are already handing over documents,” said Abebe Shiferaw, communications director for AABE.

Officials of the Board believe the centralization of the licensing process would be instrumental to standardize accounting profession.

“Financial reports were not produced in accordance with the same standards, which is causing multiple bankruptcies and harming the economy as a whole. We hope to streamline the licensing process by centralizing the registration process, which is also critical to standardize the profession for the betterment of the country,” said Abebe, suggesting accountants and auditors across the country to apply online.

Harari and Sidama regions are the first to handover the documents of accountants and auditors whom they have registered, while other regions are expected to follow.

“We have already trained accounting professionals in both regions on how the new procedure works,” Abebe said.

The new measure is part of AABE’s efforts to achieve the full implementation of International Financial Reporting Standard (IFRS) across the country by 2024. The Board has decided to move the deadline for completing IFRS adoption from 2020 to 2019.

Three categories of IFRS implementers exist: full implementers, IFRS for small and medium-sized institutions, and IFRS for charity (IPSAS).

For the full IFRS implementation, institutions must have annual budgets or revenues of at least 300 million birr and at least 200 employees. Small and medium-sized businesses are defined as those that have yearly revenues of between 20 million and 300 million birr and employ 20 to 200 people.

The Commercial Bank of Ethiopia (CBE) is the first institution to fully implement IFRS in Ethiopia. It was followed by the country’s 17 banks and the same number of insurance companies.

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