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Financial reporting framework in Zambia as of November 2009

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30 Nov 2009

The Accountants Act of 2008 gives the Zambia Institute of Chartered Accountants (ZICA) authority to regulate the accounting and auditing profession. An earlier (1982) law gave ZICA similar authority.

Since 2004 ZICA has adopted International Financial Reporting Standards (IFRSs) in full, without modification. Members of ZICA, which include all auditors in Zambia, are obligated by their ZICA membership to ensure compliance with IFRSs. However, there is no statutory requirement for listed or unlisted companies to use IFRSs.

The Securities Act and Lusaka Stock Exchange require auditors to be registered and to hold ZICA-issued practicing certificates, but they do not require compliance with IFRSs. However, all auditors are ZICA members, and all ZICA members are duty bound to comply with ZICA's position on the application of IFRSs.

At present, using IFRS is not a legal requirement under the Insurance Act and the Banking and Financial Services Act. However, an effort is under way &to make IFRS a mandatory requirement for financial institutions regulated under these Acts.

A June 2009 addendum to the World Bank's 2007 ROSC Report on Zambia, submitted by the Ministry of Finance and National Planning, states:

To assure compliance with international accounting and auditing standards, the ZICA Council has established a Standards and Regulation Board to oversee practice reviews and implementation of IFRS and IAS by chartered accountants in business (report writers) and public practice....

IFRS will not be mandatory for small and medium enterprises.

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