Friday, July 19, 2024
BusinessDraft proclamation paves way for Ethiopia's first accountants institute

Draft proclamation paves way for Ethiopia’s first accountants institute

Officials at Ethiopia’s Ministry of Finance are reviewing a draft proclamation to pave the way for establishing the country’s first institute for certified public accountants.

The Accounting and Auditing Board of Ethiopia (AABE) has submitted a draft proclamation to the Ministry.

The draft proclamation aims to establish the institute, a body dedicated to developing and regulating the accountancy profession in Ethiopia in the public interest and enhancing its members’ contributions to Ethiopia’s stock market, according to Hikmet Abdella, director-general of AABE.

“To improve Ethiopia’s accountancy profession to the level reached in some African countries and globally, much must be done by all stakeholders,” Hikmet said.

“The major challenge is the lack of enough professional accountants in the country. This negatively impacts the quality of financial statements prepared by reporting entities and the quality of audits,” she added.

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The Accounting Board currently has limited professionals to monitor the quality of financial statements and audits.

“The institute will fill this gap,” Hikmet added.

Ethiopia’s progress in adopting International Financial Reporting Standards has been unsatisfactory in recent years due to a critical shortage of accountants at all levels.

The weakness of available accounting and auditing services in Ethiopia is mainly attributable to a lack of appropriately trained personnel, according to Hikmet.

“There is no institution that produces accountants in the country; the new institute aims to produce long-term professionals,” she explained.

The institute will train accountants currently working in different organizations who have a bachelor’s degrees from various institutions.

Ethiopia is late in establishing its Institute of Certified Accountants compared to other countries in the region and globally.

While institutes in neighboring African countries like Kenya, Uganda, Rwanda, and Tanzania were established as far back as the 1970s and 1980s, Ethiopia’s proposed institute will be launched if the proclamation is approved by the Council of Ministers and legislators.

Nigeria and the United States established their institutes even earlier, in 1965 and 1889 respectively.

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