Financial Crime World

Mozambique Introduces Foreign Account Reporting Requirements to Boost Transparency

Mozambique has announced a significant step towards enhancing transparency and comparability by requiring all listed companies, public companies, state-owned enterprises, and large private companies to adopt International Financial Reporting Standards (IFRS) starting January 1, 2010.

Background

The decision is expected to improve auditing and regulation in the country. In November 2009, the government issued a decree mandating the use of IFRSs by all listed companies, public companies, state-owned enterprises, and large private companies. The requirement will be extended to medium-sized companies starting January 1, 2011.

Benefits

Introducing IFRSs will provide greater transparency and comparability, making it easier for regulators and auditors to evaluate financial statements. This move is expected to:

  • Improve auditing and regulation
  • Enhance accountability in the country’s financial sector
  • Make it easier for regulators and investors to assess the financial health of companies operating in Mozambique

Implementation Timeline

The implementation timeline is as follows:

  • January 1, 2010: IFRS adoption by listed companies, public companies, state-owned enterprises, and large private companies
  • January 1, 2011: Extension of requirement to medium-sized companies
  • 2007: Mozambican banks required to publish IFRS financial statements
  • 2009: Requirement extended to large non-banking corporations
  • 2006: Central bank started reporting under IFRSs

Ongoing Efforts

Two new pieces of legislation are currently under discussion and expected to be approved by the end of May 2010. These bills aim to:

  • Adopt a new general accounting plan in line with IFRSs
  • Align Mozambique’s tax code with IFRSs, particularly with regards to asset classification and depreciation

By implementing these changes, Mozambique is taking a significant step towards improving transparency and accountability in its financial sector, making it easier for regulators and investors to assess the financial health of companies operating in the country.