Ghana

Member Organizations

Member Organization Associate Other PAOs

  Institute of Chartered Accountants (Ghana)

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The Companies Code 1963 governs the corporate financial reporting, accounting, and auditing requirements in Ghana. Although the Act outlines the preparation and publication of financial statements, the accounting standards to be used are not specified. De facto, the standards issued by the Institute of Chartered Accountants (Ghana) (ICAG) are applied. As of 2016, proposed amendments to the Act would provide legal backing to the standards ICAG issues, but these amendments are not yet effective.

    In the 1990s, ICAG issued the Ghana National Accounting Standards and, in 2007, adopted IFRS as the accounting standards required for the preparation of financial statements of all government business enterprises, banks, insurance companies, securities brokers, pension funds, and public utilities. In 2010, the institute adopted IFRS for SMEs, with the mandatory use of those standards becoming effective beginning in 2015. In 2013, A Guide for Micro-sized Entities Applying the IFRS for SMEs was issued for micro-entities that are too small to use IFRS for SMEs. It is a not a separate standard but includes only those requirements of IFRS for SMEs that are likely to be necessary for a typical micro-entity. Other entities are permitted to use either full IFRS or IFRS for SMEs.

    The Companies Code Act 1963 stipulates that all companies registered under the law, regardless of size or public interest level, must be audited by auditors registered with ICAG and must file audited financial statements with the Registrar of Companies. Under the Charted Accountants Act 1963, ICAG is also the auditing standard setter for Ghana. ICAG has adopted ISA and other IAASB pronouncements since 2007.

    The Securities Industry Law, PNDC Law 333, and the Securities and Exchange Commission (SEC) Regulations, 2003 (L.I.1728) set the requirements for financial reporting and auditing for listed entities. Listed companies are required to use IFRS, and the SEC checks financial statements for compliance with those standards.

    Banks are regulated by the Bank of Ghana (BoG) in accordance with the Banking Law 1989. Banks must prepare their financial statements in compliance with IFRS and have them audited. Banks are required to rotate audit firms every six years. The BoG may not approve auditors appointed at an annual general meeting if the auditors do not meet certain criteria.

    The Insurance Act 2006 (Act 724) regulates financial reporting and audit requirements for insurance companies and authorizes the National Insurance Commission (NIC) to establish accounting and auditing standards for entities under its supervision. The NIC issued Guidelines to Insurance Industry on External Auditors, which requires all insurers to prepare their financial statements in accordance with IFRS, and to have them audited using ISA by a qualified, independent external auditor approved by the NIC.

  • Regulation of Accountancy Profession

    The Chartered Accountants Act (Act 170) 1963 establishes the Institute of Chartered Accountants (Ghana) (ICAG) with a mandate to regulate the accounting profession. Membership in the institute is mandatory for using the designation Chartered Accountant (CA) or Practicing Accountant and to publicly practice accountancy.

    ICAG’s responsibilities include: (i) setting and maintaining auditing standards; (ii) maintaining accounting standards; (iii) maintaining and publishing a register of chartered accountants and practicing accountants; (iv) issuing and renewing licenses for qualified members to practice accountancy; (v) setting and monitoring compliance with initial professional development and continuing professional development requirements; (vi) setting ethical requirements for its members; (vii) investigating and disciplining members for breach of rules and other professional standards; (viii) monitoring conduct and performance of members, including quality assurance reviews of all audits of public interest entities and other services delivered by members; and (ix) setting public sector accounting standards.

    The institute offers examinations for two main programs: (i) the Chartered Accountant Professional Program and (ii) the Accounting Technician Scheme, West Africa’s program offered to students in the sub-region. As part of the Association of Accountancy Bodies in West Africa, the Accounting Technician qualification is regionally recognized. But, as ICAG membership does not seem to mandatory for Accounting Technicians, they are not subject to regulation.

    Candidates for ICAG membership as CAs have to complete a program of professional accountancy education, have three years of practical experience, and pass ICAG’s final examinations. The National Council for Tertiary Education and the National Board for Technical Education are responsible for setting education standards for universities that deliver professional accountancy education programs.

    To practice auditing, qualified members must obtain a practicing license from ICAG, which must be renewed annually. Obtaining a practicing license requires four years of practical experience (of which three should be with an audit firm) and two years of post-qualification experience. Once members are issued a practicing license, they can use the designation of Practicing Accountant. Under the Companies Code Act 1963, all audits must be conducted by a Practicing Accountant registered and licensed by ICAG.

    In certain cases, practitioners with external professional qualifications are eligible for ICAG membership, but are not required to sit for examinations in locally relevant courses before beginning public practice.

    The National Insurance Commission (NIC) and the Bank of Ghana (BoG) also implement additional regulations for auditors that audit entities under their supervision. The NIC approves auditors providing services for insurance companies and the BoG requires banks to rotate audit firms every six years. It may not accept auditors appointed at an annual general meeting if the auditors do not meet certain criteria.

  • Audit Oversight Arrangements

    The audit profession is self-regulated and there is no independent audit oversight body for the profession.

    Auditors are regulated by the Institute of Chartered Accountants (Ghana) (ICAG) in accordance with the Chartered Accountants Act 1963. The Companies Code Act 1963 stipulates that all audits must be completed by Practicing Accountants registered and licensed with ICAG. Membership of ICAG is mandatory for Practicing Accountants. ICAG is responsible for: (i) setting and maintaining auditing standards; (ii) maintaining and publishing a register of practicing auditors; (iii) issuing and renewing licenses for qualified members to practice auditing; (iv) setting and monitoring compliance with initial professional development and continuing professional development requirements; (v) setting ethical requirements for its members; (vi) investigating and disciplining members for breach of rules and other professional standards; and (vii) monitoring conduct and performance of members, including quality assurance reviews of all audits of public interest entities and other services delivered by members.

    In addition, the National Insurance Commission approves auditors providing services for entities under its supervision and the Bank of Ghana requires banks to rotate audit firms every six years. As well, it may not approve auditors appointed at an annual general meeting if the auditors do not meet certain criteria.

  • Professional Accountancy Organizations

    The Institute of Chartered Accountants (Ghana) (ICAG) was established by the Chartered Accountants Act (Act 170) 1963. ICAG’s membership comprises Chartered Accountants and Practicing Accountants. Membership in ICAG is mandatory for Chartered Accountants and Practicing Accountants. ICAG’s responsibilities include: (i) setting and maintaining auditing standards; (ii) maintaining accounting standards; (iii) maintaining and publishing a register of chartered accountants and practicing accountants; (iv) issuing and renewing licenses for qualified members to practice accountancy; (v) setting and monitoring compliance with initial professional development and continuing professional development requirements; (vi) setting ethical requirements for its members; (vii) investigating and disciplining members for breach of rules and other professional standards; (viii) monitoring conduct and performance of members, including quality assurance reviews of all audits of public interest entities and other services delivered by members; and (ix) setting public sector accounting standards.

    In addition to being a member of IFAC, ICAG is a member of the Association of Accountancy Bodies in West Africa, and the Pan African Federation of Accountants.

  • Projects or Other Information

    In 2014, the Institute of Chartered Accountants (Ghana) (ICAG) proposed a new Chartered Accountants Act, clarifying ICAG’s responsibilities in the area of accounting and auditing standard setting. Subsequently, ICAG decided not to move forward with the proposed new Act, but rather to develop Regulations to Act 179 incorporating these matters. The proposed Regulations were expected to be submitted to ICAG’s Council for approval in July 2015, after which it was to be submitted to the Ministry of Education for recommendation to Parliament.

    The Companies Code is under revision and proposed amendments would provide legal backing to the accounting standards issued by ICAG, but these amendments are not yet effective as of 2016.

    The Institute of Chartered Accountants in England and Wales will partner with ICAG to help strengthen Ghana’s accountancy education, training, and qualification examination system through a Department for International Development-funded IFAC program to support PAO capacity building.

Adoption of International Standards

  • Quality Assurance

    In accordance with Section 23 of the Chartered Accountants Act 1963, the Institute of Chartered Accountants (Ghana) (ICAG) is responsible for conducting quality assurance (QA) reviews of statutory audits. In 2008, ICAG developed a Quality Assurance Monitoring (QAM) system. Its scope includes all statutory audits.

    ICAG has adopted ISQC 1 as its quality control standard. The QAM system officially became operational in 2012.

    During the 2016 SMO Action Plan update process, ICAG conducted a self-assessment of its QA system against the revised SMO 1 requirements and reports that its QA system is in line with the revised SMO 1 requirements.

    Current Status: Adopted

  • International Education Standards

    Section 9 of the Chartered Accountants Act 1963 empowers the Institute of Chartered Accountants (Ghana) (ICAG) as the entity responsible to set initial professional development and continuing professional development requirements for its members.

    The Institute’s Education and Training Committee is responsible for determining the curricula and syllabus for its professional qualifications and conducting the qualifying examinations. The National Council for Tertiary Education and the National Board for Technical Education set education standards for universities, which are responsible for delivering part of the qualifying education programs leading up to taking ICAG’s examination.

    The institute indicates in its 2016 SMO Action Plan that it has revised its education system to incorporate all IES requirements.

    Current Status: Adopted

  • International Standards on Auditing

    Under the Chartered Accountants Act 1963, the Institute of Chartered Accountants (Ghana) (ICAG) is responsible for adopting auditing standards in Ghana. In 2007, ICAG first adopted ISA and other IAASB pronouncements without modifications. Subsequently, ICAG reports that Clarified ISA, as well as any subsequent revisions, have been adopted and are applicable in Ghana.

    ICAG indicates that its Technical and Research Committee advises the ICAG Council on all revisions to the standards to ensure that they are adopted and incorporated into existing standards on an ongoing basis.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Institute of Chartered Accountants (Ghana) (ICAG) is responsible for adopting ethical requirements for its members in accordance with Section 9 of the Chartered Accountants Act 1963. ICAG has adopted the IESBA Code of Ethics and states that it adopts new and revised amendments to the Code on an ongoing basis without modifications.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    Under the Chartered Accountants Act 1963, the Institute of Chartered Accountants (Ghana) (ICAG) is responsible for adopting public sector accounting standards. It has adopted IPSAS as the financial reporting framework for public sector entities.

    The Ministry of Finance and Economic Planning (MoFEP) is responsible for the implementation of public sector accounting standards. Public accounts prepared by the Controller and Accountant General’s Department currently use a modified accrual basis of accounting. In 2015, the MoFEP announced the adoption of accrual-based IPSAS as framework for reporting by the Government of Ghana within a period of five years.

    The MoFEP, with the support of ICAG and the Ghana Audit Service, has established a Working Group and a strategic roadmap for the implementation of accrual-based IPSAS.

    Current Status: Partially Adopted

  • Investigation and Discipline

    The Institute of Chartered Accountants (Ghana) (ICAG) is responsible for establishing an investigative and disciplinary system for its members in accordance with the Chartered Accountants Act 1963. The institute has established an Investigation Panel to investigate complaints and refer any matters to the Disciplinary Committee.

    Although the system has been established and is operational, ICAG reports that its system is not fully in line with SMO 6 requirements, particularly in the areas of committee composition, the availability of an appeals mechanisms, and certain administrative processes.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Companies Code Act 1963 does not specify the accounting standards to be applied in the preparation of financial statements; however, proposed amendments to the Act would require all companies to prepare financial statements in accordance with the accounting standards adopted by the Institute of Chartered Accountants (Ghana) (ICAG). These amendments are not yet effective as of 2016. De facto, ICAG is the accounting standard setter for Ghana.

    Since 2007, ICAG has adopted IFRS. IFRS are required for the financial statements of all government business enterprises, banks, insurance companies, securities brokers, pension funds, and public utilities.

    Companies are that are not required to use IFRS are permitted to use IFRS or IFRS for SMEs. IFRS for SMEs were adopted in 2010, and their mandatory use became effective in 2015.

    It is unclear what version of IFRS is being applied and if there is an established ongoing process to incorporate new and amended standards.

    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: 06/2016
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