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Egypt Introduces New Regulatory Reporting Requirements for Companies

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Cairo, Egypt - The Egyptian government has recently introduced new regulatory reporting requirements for all companies operating in the country, including listed and unlisted entities.

Mandatory Financial Statements and Audits

According to a report by the Egyptian Society of Accountants and Auditors, all companies are now required to prepare financial statements in accordance with Egyptian Accounting Standards (EAS) and have them audited by a certified public accountant. This means that joint audits will be mandatory for banks and other financial institutions.

EAS Development

The EAS is developed by the Standards Committee of the Egyptian Society of Accountants and Auditors, which is headed by the Minister of Investment. The current version of the full EAS was issued in 2006 and applies to all Egyptian entities established under the provisions of the Corporate Law No. 159 of 1981 and the Capital Market Authority Law No. 95 of 1992.

Compliance with IFRS

The new regulations also require companies to comply with International Financial Reporting Standards (IFRS) in all material respects, except where there are significant differences due to applicable Egyptian laws and regulations. Some of these differences are a result of the latest changes made to IFRSs in 2008 and 2009.

Proposed EAS for SMEs

The Egyptian Society of Accountants and Auditors is currently developing an exposure draft of a proposed EAS for small and medium-sized enterprises (SMEs). The proposed standard will be based on the IFRS for SMEs but will propose several differences, including changes to the areas of leases and distributions of profits to employees. The Board of the Egyptian Society of Accountants and Auditors expects to release the proposed EAS for SMEs in 2010, although the effective date for implementation has not yet been decided.

Objectives and Consequences

The new regulations are aimed at improving financial transparency and accountability among companies operating in Egypt, and will help to enhance investor confidence and promote economic growth. Companies that fail to comply with the new regulations may face penalties and fines, highlighting the importance of adhering to these requirements.