Financial Crime World

Mozambique Takes Step Towards Transparency with Financial Reporting Framework Reform

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Mozambique has approved a new private sector accounting system that requires the use of International Financial Reporting Standards (IFRSs) for listed companies, public companies, companies with a majority state shareholding, and large corporations starting January 1, 2010. This move aims to increase transparency and comparability across industries.

Simplifying Auditing and Regulation

According to government officials, introducing IFRSs will simplify auditing and regulation, making it easier for investors and regulators to evaluate the financial health of Mozambican businesses. The previous decree required banks in Mozambique to use IFRSs starting July 2008, while insurance companies were initially set to implement the standards by 2009.

Banking Sector Leads the Way

Mozambican banks have already been required to publish IFRS financial statements since 2007. This was a result of a joint letter of intent from the government and the Bank of Mozambique (BM) to the International Monetary Fund (IMF) in March 2007. The BM itself began reporting under IFRSs in 2006.

Future Plans

The country’s accounting framework is expected to undergo further changes with the approval of two new pieces of legislation. One proposal aims to introduce a general accounting plan in line with IFRSs, while another seeks to align Mozambique’s tax code with international standards.

Timeline

  • January 1, 2010: Requirement for listed companies, public companies, companies with a majority state shareholding, and large corporations to use IFRSs
  • January 1, 2011: Expansion of requirement to medium-sized companies
  • 2008: Extension of IFRS requirement to insurance companies (not explicitly stated in official documents)
  • 2007: Banks in Mozambique required to publish IFRS financial statements

Conclusion

The move towards IFRS adoption is seen as a significant step forward for Mozambique’s financial sector, aimed at improving transparency and comparability across industries. The country’s commitment to adopting international standards is expected to promote economic growth and development.