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Botswana's statutory framework for accounting and auditing
5. The Companies Act (Cap 42:01) requires all companies incorporated in Botswana to prepare annual financial statements. The Companies Act provides requirements for preparation, presentation, and publication of financial statements, disclosures, and auditing for the companies incorporated under the Act. The Act prescribes the basic contents and form of financial statements, and it requires that the financial statements of the companies, except private limited companies meeting certain thresholds, be audited annually. The Act does not specifically limit the eligibility of auditors only from the membership of the Botswana Institute of Accountants (BIA). However, in practice, the BIA members who have a valid practicing certificate undertake audits for the most part. The Companies Act requires consolidated financial statements to be prepared by the group companies. But it relaxes this requirement on the condition when the directors are of the opinion that 'it is impracticable or would be of no real value to the members of the company' or 'the result would be misleading or harmful to the business of the company or any of its subsidiaries'. This may result in possible accounting policy manipulations, resulting in departure from international best practice when preparing consolidated financial statements....
7. There is no legal mandate for the application of IFRS and ISA. The legislative enactments, including the Companies Act and the Banking Act, do not mandate the application of IFRS and ISA with regard to preparation and audit of financial statements of corporate entities. However, the publicly traded companies and banks prepare the financial statements claiming to follow IFRS and auditors claim that they follow ISA. The Insurance Industry Regulations requires that insurance companies follow 'recognized international accounting standards', without mentioning the issuing authority of such standards. The Government of Botswana is in the process of enacting a revised Companies Act, which is expected to mandate the application of IFRS and ISA for the entities incorporated in Botswana....
18. Botswana Stock Exchange listing requirements require presentation of interim financial statements. As per the listing requirements, listed companies must present unaudited quarterly financial results according to a prescribed format and must be circulated among the shareholders. The listed companies are also required to submit their annual financial statements, prepared in accordance with IFRS and audited in accordance with ISA.
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