Botswana

Member Organizations

Member Organization Associate Other PAOs

  Botswana Institute of Chartered Accountants

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The Companies Act 2003 and the Financial Reporting Act 2010 govern the corporate financial reporting framework in Botswana. The Companies Act outlines the formation and operation of companies and stipulates the requirements for the preparation of their financial statements. It also establishes mandatory audit requirements for all companies except exempt private companies.

    The Companies Act 2003 stipulates that a public company and non-exempt private companies are to use IFRS for the preparation of their financial reporting. Non-listed companies that are not financial institutions, and that meet the requirements for exemption, are permitted to use IFRS for SMEs.

    Subsequently, the Financial Reporting Act 2010 established the Botswana Accountancy Oversight Authority (BAOA) with the authority to adopt, issue, and keep up-to-date financial reporting standards for public interest entities (PIEs), and ensure that they are consistent with the IFRS and interpretations issued by the International Accounting Standards Board. The Financial Reporting Act’s accompanying Regulations issued in 2016 define PIEs as listed companies, banks, insurance companies, pension funds, entities supervised by the Non-Bank Financial Institutions Regulatory Authority, and any company that exceeds two of the following thresholds: (i) an annual revenue of P300 million; (ii) 200 employees; (iii) total assets of P200 million; or (iv) total liabilities of P100 million, not including shareholder’s equity. The BAOA has adopted all IFRS as issued by the IASB.

    The Financial Reporting Act 2010 also empowers the BAOA to adopt, issue, and keep up-to-date auditing standards that are consistent with international best practice. The BAOA has adopted ISA as issued by the IAASB including effective date.

  • Regulation of Accountancy Profession

    Professional accountants are subject to regulation by the Botswana Institute of Chartered Accountants (BICA) in accordance with the Accountants Act 2010 and the oversight of the Botswana Accountancy Oversight Authority (BAOA) as per the Financial Reporting Act 2010. In addition, auditors of public interest entities (PIEs) are subject to further regulation by the BAOA.

    As noted, the BAOA is empowered with regulatory and oversight functions. In addition to overseeing BICA’s activities, the BAOA’s responsibilities are to: (i) license auditors and audit firms that audit PIEs that have BICA-issued practicing certificates; (ii) maintain a register of Certified Auditors of PIEs and Firms for Certified Auditors of PIEs; (iii) oversee and monitor the performance and conduct of Certified Auditors of PIEs through QA reviews; (iv) establish and maintain an investigation and disciplinary system for Certified Auditors of PIEs; (v) issue, monitor, and enforce financial reporting, ethics, and auditing standards; and (vi) coordinate with or refer disciplinary matters to the BICA. Per a Memorandum of Understanding (MoU) signed between BICA and the BAOA in 2014, the BAOA will also undertake reviews of non-PIE Certified Auditors and recommend a course of action to BICA based upon results. The MoU was renewed in 2018 for another two-year period or until revisions of the two Acts are passed which state that the BAOA is responsible for all QA reviews.

    In accordance with the Accountants Act 2010, BICA’s responsibilities are to: (i) establish, develop, and implement the Botswana Professional Accountancy Qualification (BPAQ); (ii) establish and monitor compliance with initial professional development and continuing professional development requirements; (iii) oversee professional examinations; (iv) implement a quality assurance (QA) review system for Non-Audit Member Firms who are not Certified Auditors; (v) establish and publish a Code of Ethics in line with the IESBA’s Code of Ethics for Professional Accountants; (vi) investigate and discipline members for professional misconduct; and (vii) maintain registers of professional accountants, distinguishing between practicing certificate and non-practicing certificate holders, and member firms.

    In order to enter the BPAQ program, candidates must (i) possess a university degree recognized by the BICA as equivalent to a degree from the University of Botswana; or (ii) be a student at the Association of Chartered Certified Accountants (ACCA) who at least passed ACCA Part 1; or (iii) be at student at the Chartered Institute of Management Accountants (CIMA) who completed at least the CIMA Certificate in Business Accounting; or (iv) be a member of ACCA, CIMA, or any other IFAC recognized professional accountancy body. Students must then complete professional examinations, practical experience of three years with an authorized training employer, and a structured training program in ethics before they can apply for BICA membership and use the designation of Chartered Accountant. Individuals who wish to offer auditing services must register with BICA as a Certified Professional Accountant while persons offering auditing services to PIEs must register as a Certified Auditor with BICA and the BAOA.

    BICA also offers an Accounting Technician (AT) qualification. To earn the AT qualification, individuals must meet educational requirements such as a bachelor’s degree in accounting and have some practical experience. Candidates must submit a work experience checklist when applying for this level of membership.

  • Audit Oversight Arrangements

    In accordance with the Financial Reporting Act 2010, the Botswana Accountancy Oversight Authority (BAOA) is the independent audit oversight entity in Botswana.

    In addition to overseeing the regulatory functions of the Botswana Institute of Chartered Accountants (BICA), the BAOA is granted the authority to: (i) license auditors and audit firms that audit public interest entities (PIEs) that have BICA-issued practicing certificates; (ii) maintain a register of Certified Auditors of PIEs and Firms for Certified Auditors of PIEs; (iii) oversee and monitor the performance and conduct of Certified Auditors of PIEs through quality assurance reviews; (iv) establish and maintain an investigation and disciplinary system for Certified Auditors of PIEs; (v) issue, monitor, and enforce financial reporting, ethics, and auditing standards; and (vi) coordinate with or refer disciplinary matters to BICA. Per a Memorandum of Understanding signed between BICA and the BAOA in 2014, the BAOA will also undertake reviews of non-PIE Certified Auditors and recommend a course of action to BICA based upon results. The MoU was renewed in 2018 for another two-year period or until revisions to legislation are passed which state that the BAOA is responsible for all QA reviews.

    The BAOA is a member of the International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    Botswana Institute of Chartered Accountants (BICA)

    BICA was established in 1990 following the adoption of the Accountants Act 1988, which has subsequently been repealed and replaced by the Accountants Act 2010, as the body responsible for regulating the accountancy profession under the oversight of the Botswana Accountant Oversight Authority. The BICA is a mandatory membership organization comprising auditors, accountants, and firms. The institute’s responsibilities are to: (i) establish, develop, and implement the Botswana Professional Accountancy Qualification; (ii) establish and monitor compliance with initial professional development and continuing professional development requirements; (iii) oversee professional examinations; (iv) implement an quality assurance review system for Non-Audit Member Firms who are not Certified Auditors; (v) establish and publish of a Code of Ethics in line with the IESBA’s Code of Ethics for Professional Accountants; (vi) investigate and discipline members for professional misconduct; and (vii) maintain registers of professional accountants, distinguishing between practicing certificate and non-practicing certificate holders, and member firms.

    In addition to being a member of IFAC, BICA is a member of the Pan African Federation of Accountants.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    The Accountants Act 2010 and the Financial Reporting Act 2010 require the establishment of mandatory quality assurance (QA) review systems for all audits in Botswana.

    With the passing of the Financial Reporting Act 2010, the Botswana Accountancy Oversight Authority (BAOA) was established and authorized to conduct QA reviews the audits of public interest entities (PIEs). Per a Memorandum of Understanding (MoU) signed between BICA and the BAOA in 2014, the BAOA now also undertakes reviews of non-PIE Certified Auditors and recommend a course of action to BICA based upon results. The MoU was renewed in 2018 for another two-year period or until revisions to legislation are passed which state that the BAOA is responsible for all QA reviews.

    The BICA undertakes practice reviews only for Non-Audit Member Firms who are not Certified Auditors that offer other accountancy services.

    According to publicly available information and the BICA, both QA review systems are in line with the SMO 1 best practices.

    Current Status: Adopted

  • International Education Standards

    The Accountants Act 2010 outlines some general entry and educational requirements and states that the Botswana Institute of Chartered Accountants (BICA) may set more specific initial and continuing professional development (IPD and CPD respectively) for professional accountants. In accordance with the Financial Reporting Act 2010, the Botswana Accountancy Oversight Authority (BAOA) oversees the training, professional development programs, and examinations carried out by BICA.

    BICA has established and implemented the Botswana Professional Accountancy Qualification (BPAQ) which utilizes the Institute of Chartered Accountants in England and Wales’ (ICAEW) materials except for a module on Botswana’s tax and business law. The ICAEW’s educational programming aligns with the 2015 revised IES. After passing examinations, individuals must complete three years of practical experience with an Authorized Training Employer and demonstrate that they have learned necessary competencies.

    BICA has established CPD requirements of 40 hours per year to align with the revised IES.

    As of 2018, BICA indicates that a new nationwide development regarding professional qualifications is underway. All professional qualifications are to be accredited based on the National Credit and Qualifications Framework (NCQF) implemented by the Botswana Qualifications Authority (BQA). In August 2018, the BICA was accredited as a Technical and Vocational Education and Training Provider for ten certificates related to accountancy education. BICA states that it has submitted documents for the accreditation of the BPAQ.

    BICA also offers an Accounting Technician (AT) qualification. To earn the AT qualification, individuals must meet educational requirements such as a bachelor’s degree in accounting and have some practical experience. Candidates must submit a work experience checklist when applying for this level of membership as part of demonstrating learned competencies.

    Current Status: Adopted

  • International Standards on Auditing

    The Financial Reporting Act 2010 empowers the Botswana Accountancy Oversight Authority to adopt, issue, and keep up-to-date auditing standards that are consistent with international best practice. The Botswana Accountancy Oversight Authority has adopted ISA as issued by the IAASB including effective date. ISA 250 R and 540 R which are a part of the 2018 Handbook were thus adopted automatically upon issue.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Accountants Act 2010 requires the Botswana Institute of Charted Accountants (BICA) to establish a Code of Ethics for professional accountants that is aligned with the IESBA Code of Ethics. The institute reports that it was an early adopter of the 2018 International Code of Ethics when it was issued by the IESBA in April 2018.

    BICA’s activities are subject to the oversight of the Botswana Accountancy Oversight Authority (BAOA) in accordance with the Financial Reporting Act 2010. The Act states that the BAOA may adopt and issue ethics standards. The BAOA adopted the Code of Ethics as issued by the IESBA once it was operational in 2016.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Botswanan Government is the standard-setter for public sector accounting. The Financial Reporting Act 2010 requires adherence to IPSAS and empowers the Botswana Accountancy Oversight Authority to enforce compliance with the standards. The Botswana Institute of Charted Accountants states that the government has adopted modified cash-basis standards using IPSAS as a reference point and intends to transition to accrual-basis IPSAS with a target date of 2023.

    Current Status: Partially Adopted

  • Investigation and Discipline

    In accordance with the Financial Reporting Act 2010, the Botswana Accountancy Oversight Authority (BAOA) must establish an investigation and discipline (I&D) system for Certified Auditors of public interest entities (PIEs). The BAOA has an Enforcement Committee to handle non-compliance with technical standards as found through quality assurance (QA) reviews and any breach of ethical requirements. Its I&D procedures are stated to be in line with SMO 6 best practices.

    Additionally, a Memorandum of Understanding (MoU) signed by the Botswana Institute of Charted Accountants (BICA) and the BAOA in 2014 and renewed in 2018 empowers the BAOA to conduct QA reviews of Certified Auditors of non-PIEs as well. The BAOA will forward results and a recommendation on to BICA for its final decision. As a result, BICA has linked its I&D system with the BAOA’s QA reviews to further investigate and discipline Certified Auditors of non-PIEs.

    As indicated above and per the Accountants Act 2010, BICA is charged with investigating and disciplining its members for professional misconduct, as well as for violations or breaches of its codes, rules, and standards.

    BICA indicates that since the passage of the Accountants Act 2010 it has taken steps to strengthen its I&D mechanisms to meet SMO 6 best practices. These include changing the composition of the Disciplinary Committee (i.e., removing the dominance of Council and introducing an independent chairperson with a legal background) and establishing an Appeals Committee. In 2018, new rules related to I&D were passed to align with SMO 6 best practices, the Accountants Act 2010, and clarify implementation procedures.

    Current Status: Adopted

  • International Financial Reporting Standards

    The Companies Act 2003 stipulates that a public company and non-exempt private companies are to use IFRS for the preparation of their financial reporting. Non-listed companies that are not financial institutions, and that meet the requirements for exemption, are permitted to use IFRS for SMEs.

    Subsequently, the Financial Reporting Act 2010 established the Botswana Accountancy Oversight Authority (BAOA) with the authority to adopt, issue, and keep up-to-date financial reporting standards for public interest entities (PIEs), and ensure that they are consistent with the IFRS and interpretations issued by the International Accounting Standards Board. The Financial Reporting Act’s accompanying Regulations issued in 2016 define PIEs as listed companies, banks, insurance companies, pension funds, entities supervised by the Non-Bank Financial Institutions Regulatory Authority, and any company that exceeds two of the following thresholds: (i) an annual revenue of P300 million; (ii) 200 employees; (iii) total assets of P200 million; or (iv) total liabilities of P100 million, not including shareholder’s equity. The BAOA has adopted all IFRS as issued by the IASB.

    Current Status: Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 08/2019
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