The Accounting & Auditing Board (AAB) of Ethiopia has begun registering individuals and entities who were engaged in accounting and auditing services prior to the establishment of the Board to execute the Financial Reporting Proclamation based on the transitory provision of the regulation issued on January 14, 2015.
According to the Financial Reporting Proclamation enacted on December 5, 2014, the Financial Reporting Proclamation was established as a regulatory body for financial reporting in the country, aimed at the creation of centralised and acceptable financial reporting, to reduce the risk of financial crisis and to comply with international reporting standards.
Registration includes both entities and individuals working in the field and the entities need not fulfil the requirements. However, these businesses should fulfil the standards the Board adapted from the international accounting education standard within five years. Otherwise, their licences would be cancelled, Gashe said, adding that the Board would provide assistance in terms of giving training but has not yet determined the standards. According to him the Board would soon formulate the professional qualification criteria and standards of certification.
Auditors are required to apply within six months after the regulation is enforced and continue their service for five years, Gashe Yemane, director general of the board, told Fortune. It has far-reaching implications for accountability, transparency and accuracy of financial statements, mainly those involving public interest such as share companies and public enterprises, he added.
Auditing reports will be submitted to the Board, which will examine them for compliance with the standards. Prior to the establishment of the Board, there was no controlling body for the service and the licence was given by the Federal Auditor General and by some regional states’ General Auditor, said Demelash Debele, an auditing expert at the Board, adding that the regulation of the service through the Board and the registration, will create confidence within the public and attract investment.
The Accounting and Auditing Board of Ethiopia, was established on January 14, 2015, by the regulation of the Council of Ministers It is said to be the first public body on accounting and auditing and is empowered to register and license auditors, to conduct investigation and take measures on public auditors and entities having public interest, to issue standards of financial reporting, to give accreditation for accounting entities, to receive and register financial statements of reporting entities, to conduct quality assurance reviews of public auditors and other audit firms, as well as to advise government on matters of financial reporting.
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