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Madagascar’s Accounting Standards: A Work in Progress

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Madagascar has been gradually adopting international accounting standards since 2006, but its journey is far from complete. The country’s accounting framework is a mix of cash-based and accrual-based systems, with some entities still using outdated standards.

Cash-Based System Dominates

Since 2006, government entities are required to apply the “Plan Comptable des Opérations Publiques” (PCOP), which is based on the 2004 version of International Public Sector Accounting Standards (IPSAS). The PCOP also incorporates elements of the National Accounting Plan and the General Accounting Plan. However, many companies still use cash-based accounting, with some entities preparing financial statements under different standards.

Investigation and Discipline

The Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for establishing and administering an investigative and disciplinary system to ensure compliance with accounting standards. The institute’s procedures are outlined in its bylaws, but it has acknowledged that further improvements are needed to meet international best practices.

IFRS Adoption Lags

While some companies are permitted to apply International Financial Reporting Standards (IFRS), the adoption of these standards is not widespread. The Conseil Supérieur de la Comptabilité (CSC) sets corporate accounting standards, and companies must prepare financial statements in accordance with the National Accounting Plan or IFRS for small- and medium-sized entities.

Challenges Ahead

Madagascar still faces significant challenges in adopting international accounting standards. The country’s professional accountants’ institute has identified areas that require improvement, including:

  • The need for non-accountants to serve on disciplinary committees
  • More transparency in reporting financial statements

Sources

  • Conseil Supérieur de la Comptabilité (CSC)
  • Ordre des Experts Comptables et Financiers de Madagascar (OECFM)
  • Relevant legislation and publications

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