Financial Crime World

Algeria: Financial Institution Audit Requirements Tightened

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The Algerian government has implemented stricter audit requirements for financial institutions across the country. These new regulations aim to boost transparency and accountability, while aligning with international standards and strengthening the country’s business environment.

Background

According to Act 07-11 of November 25, 2007, financial institutions are now required to prepare their accounts in accordance with Algerian Accounting Standards (AAS), which are based on International Financial Reporting Standards (IFRS).

Mandatory Financial Statements

Financial statements must include the following:

  • Balance Sheet: A comprehensive overview of a company’s assets, liabilities, and equity at a specific point in time.
  • Income Statement: A financial statement that summarizes revenues and expenses over a period of time.
  • Cash-Flow Statement: A report that shows the inflows and outflows of cash and cash equivalents over a specific period.
  • Statement of Change in Shareholders’ Equity: A document that outlines changes in equity over a specified period, including dividends, profits, or losses.
  • Appendix: Additional information supporting the financial statements.

Regular Declarations

Financial institutions are required to make monthly and annual declarations. These must be submitted:

  • Before the 21st of every month for monthly declarations
  • Before April 1st of every year for annual declarations

Tax Obligations

Large companies with a turnover above DZD 10,000,000 are obligated to pay provisional tax three times a year:

  • March 20th
  • June 20th
  • November 20th

Financial institutions with a turnover below DZD 10,000,000 are exempt from audit requirements.

Implementation and Expectations

The implementation of these new regulations is expected to enhance transparency and accountability among financial institutions in Algeria. Professional accountancy bodies such as the National Organisation of Chartered Accountants (ONCA) have welcomed the changes.

Financial institutions are encouraged to consult with external auditors, including KPMG Algeria, Deloitte Algeria, and PricewaterhouseCoopers, to ensure compliance with the new regulations.