International Federation of Accountants

Mozambique

Member Organizations

Member Organization Associate

  Ordem dos Contabilistas e Auditores de Moçambique

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The financial reporting framework in Mozambique is established under the Commercial Code 2005 and Decree 70/2009 of December 22, 2009. The Commercial Code 2005 establishes the obligation for companies to keep books of accounts while Decree 70/2009 stipulates the accounting standards to be followed.

    Accounting Framework

    Decree 70/2009 revised the General Chart of Accounts to establish an accounting system based on the IFRS. The Accounting System for the Business Sector (SCE) comprises a Chart of Accounts for Large- and Medium-sized Companies (PGC-NIRF) which are based on IFRS as published in November 2008, with certain standards omitted. Large companies are defined as: (i) having a turnover or net assets exceeding 1,275 million Meticais (MZN) or (ii) more than 500 employees; while medium companies are defined as: (i) having a turnover or net assets less than 1,275 million MZN but exceeding 500 million MZN or (ii) less than 500 but more than 250 employees. Public companies or companies with a majority of public equity along with companies whose equity shares are quoted on the Stock Exchange of Mozambique or those whose shares are listed on any other stock exchange, if they have their headquarters in Mozambique as also considered to be large companies. The PGC-NIRF became effective in 2010.

    In addition, a simplified Chart of Accountants for Small and other Companies (PGC-PE) became effective in 2011 for the following types of companies: (i) having a total income and gains under 500 million MZN; (ii); having total net assets under 500 million MZN; or (iii) less than 250 employees.

    The Decree 70/2009 stipulates that a Regulatory Board of the Accounting Standards, which should be created by the Ministry of Finance, would be responsible for reviewing, adjusting, interpreting, and updating the SCE in Mozambique. Such a standard-setting board has not yet been created and there is an unclear timeline for establishing one. The Ordem dos Contabilistas e Auditores de Moçambique’s (OCAM) has taken steps to form a standard-setting committee with representatives from the Bank of Mozambique, insurance regulator, and the Stock Exchange of Mozambique.

    Decree 70/2009 explicitly states that the SCE does not apply to institutions and companies in the banking and insurance sectors which are subject to requirements of the Bank of Mozambique (BM) and the Ministry of Finance. Through Notice No. 4/GBM/2007, the BM adopted IFRS as published in 2008 for banks and similar lending and financial institutions. Similarly, in accordance with Diploma Ministerial nº 222/2010, insurance companies are also to apply the abovementioned standards. In practice, however, OCAM indicates that both regulators require entities under their supervision to apply IFRS as issued by the IASB.

    Auditing Framework

    The Commercial Code 2005 stipulates that large companies, listed companies, and companies with foreign shareholding are required to have their financial statements audited. OCAM, through its founding legislation, has a mandate to define technical standards taking into consideration international standards. OCAM states it has adopted the ISA as issued by the IAASB and reports that all certified audit firms use ISA to conduct audit work in Mozambique. According to OCAM, auditors must be rotated at least every four years.

    Banks and insurance companies are also required to follow OCAM’s applicable standards. The credit institutions and finance companies must apply to the Bank of Mozambique for approval of their external auditor within 30 days after the auditor has been selected.

  • Regulation of Accountancy Profession

    Professional accountants in Mozambique are regulated by the Ordem dos Contabilistas e Auditores de Moçambique (OCAM) as authorized by Law No. 8/2012. Under Section 6 of the Law, OCAM’s responsibilities include: (i) promoting the interests of the accountancy profession; (ii) issuing practicing certificates for certified accountants (CC) and certified auditors (CA); (iii) maintaining a registry of its members; (iv) establishing initial and continuing professional development (IPD and CPD) requirements; (iv) setting ethical requirements; (v) establishing and implementing an investigative and disciplinary (I&D) system; (vi) defining technical standards taking into consideration international best practices; (vii) proposing legislative measures, regulations or any decree of similar nature relating to the Accounting System for the Business Sector (SCE) according to international standards; and (viii) establishing and implementing a quality assurance (QA) review system.

    All individuals who wish to be professional accountants must have the designation of certified accountant (CC) or certified auditor (CA). The designations of CC and CA are protected by Law No. 8/2012 such that only members of OCAM may use them upon registration. In accordance with Section 12 of the Law, CCs may only provide accounting services, such as preparing financial statements, and providing advisory and consulting services related to accounting matters, while CAs are authorized to provide auditing services in addition to those provided by CCs.

    The pathway to qualify as a CC or CA is through the OCAM’s College of Accountants or College of Auditors, respectively. After obtaining a university degree in accounting, individuals must pass an examination to enroll in either College. Individuals must then complete three years’ practical experience under the supervision of an OCAM member in good standing and pass oral and written examinations of the respective college. OCAM has established partnership with Ordem dos Contabilistas Certificados (OCC—Portugal) and Ordem dos Revisores Oficiais de Contas (OROC—Portugal) whereby the College of Accountants examination and the College of Auditors examination is the same as OCC and OROC. Auditors are also subject to formal licensing by the Ministry of Finance to conduct their business.

    In addition, OCAM will admit individuals that hold of qualifications of IFAC-recognized PAOs subject to passing local taxation and company law examinations.

  • Audit Oversight Arrangements

    There is no independent audit oversight body in Mozambique.

    Auditors are regulated by the Ordem dos Contabilistas e Auditores de Moçambique (OCAM) in accordance with its mandate under Law No 8/2012. Individuals who wish to publicly practice auditing must hold the designation of certified auditor (CA) and be registered as a member of OCAM. Auditors are also subject to formal licensing by the Ministry of Finance to conduct their business.

    OCAM’s responsibilities as related to the regulation of the auditing profession include: (i) issuing practicing certificates for certified auditors; (ii) maintaining a registry of its members; (iii) establishing initial and continuing professional development requirements for members; (iv) setting ethical requirements; (vi) establishing and implementing an investigative and disciplinary (I&D) system; (vii) defining audit standards taking into consideration international best practices; and (viii) establishing and implementing a quality assurance (QA) review system. The association is a member of the African Forum of Independent Accounting and Auditing Regulators (AFIAAR).

  • Professional Accountancy Organizations

    Ordem dos Contabilistas e Auditores de Moçambique (OCAM)

    The OCAM is empowered by Law No. 8/2012 to regulate the accountancy profession. OCAM’s membership is comprised of certified accountants (CCs) and certified auditors (CAs). All individuals who wish to be professional accountants must have the designation of certified accountant (CC) or certified auditor (CA). The designations of CC and CA are protected by Law No. 8/2012 such that only members of OCAM may use them upon registration.

    Under Section 6 of the Law, OCAM’s responsibilities include: (i) promoting the interests of the accountancy profession; (ii) issuing practicing certificates for certified accountants (CC) and certified auditors (CA); (iii) maintaining a registry of its members; (iv) establishing initial and continuing professional development (IPD and CPD) requirements; (iv) setting ethical requirements; (v) establishing and implementing an investigative and disciplinary (I&D) system; (vi) defining technical standards taking into consideration international best practices; (vii) proposing legislative measures, regulations or any decree of similar nature relating to the Accounting System for the Business Sector (SCE) according to international standards; and (viii) establishing and implementing a quality assurance (QA) review system.

    In addition to being an Associate member of IFAC, OCAM is a member of the Pan African Federation of Accountants (PAFA).

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    OCAM is responsible for conducting quality assurance (QA) reviews in Mozambique in accordance with Law No. 8/2021 and in 2014, passed regulations that adopted quality control standards (ISQC 1), established QA review procedures incorporating the SMO 1 requirements, and a Quality Assurance Committee (QAC). Subsequently, in 2017, OCAM signed a Memorandum of Understanding with the Public Accountants and Auditors Board—Zimbabwe (PAAB) to support the operation of the QA review system. PAAB has commenced training for Mozambican firms and began QA reviews in July 2018 on behalf of OCAM as OCAM’s QA reviewers continue to build capacity.

    OCAM reports that QA reviews are conducted using both a risk and cycle-based approach. This system will allow each member to be evaluated at least once in every six years and every three years for firms that provide services to public interest entities. OCAM’s QA team has received training with the assistance of the Institute of Certified Public Accountants in Ireland, the Independent Regulatory Board for Auditors (South Africa), and the OROC.

    Current Status: Adopted

  • International Education Standards

    Law No. 8/2012 outlines some general entry and educational requirements and states that the Ordem dos Contabilistas e Auditores de Moçambique (OCAM) may set more specific initial and continuing professional development (IPD and CPD respectively) of professional accountants.

    The designations of certified accountant (CC) and certified auditor (CA) are protected by Law No. 8/2012 such that only members of OCAM may use them. Individuals must have a university degree in accounting to be eligible to take OCAM’s examinations to enroll in its College of Accountants or College of Auditors. Candidates must complete three years of practical experience under the supervision of an OCAM member in good standing. OCAM evaluates the practical experience after candidates successfully complete oral and written final examinations. OCAM states that it has adopted the requirements of the latest IES.

    OCAM’s Admission and Qualification Committee and Examination Jury define the content of textbooks and tuition for examination. In partnership with the Ordem dos Contabilistas Certificados (OCC—Portugal) and Ordem dos Revisores Oficiais de Contas (OROC—Portugal), OCAM’s Colleges utilize the examination material from the respective institutes, which aligns with 2019 IES 2, 3, 4, and 6.

    Chapter 20 of the OCAM’s Internal Code of Conduct establishes mandatory CPD for all certified accountants and auditors. All members are required to record 120 CPD hours every three years.

    Current Status: Adopted

  • International Standards on Auditing

    The Commercial Code 2005 stipulates that large companies, listed companies, and companies with foreign shareholding are required to have their financial statements audited. Banks and insurance companies are required to submit their annual audited financial statements to the Bank of Mozambique.

    OCAM is authorized by Law No. 8/2012 to define audit standards taking into consideration international best practices. OCAM states it has adopted the ISA as issued by the IAASB.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    Under Law No. 8/2012, OCAM is responsible for establishing ethical requirements for professional accountants. OCAM issued internal Resolution 5/GB/2014 which adopted the International Code of Ethics as issued by IESBA in its entirety as OCAM’s Code of Ethics.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Mozambican government is responsible for adopting public sector accounting standards. In accordance with Law No. 9/2012, cash-basis national accounting standards are applicable in Mozambique (IFAC, CIPFA 2020). The Ordem dos Contabilistas e Auditores de Moçambique (OCAM) reports that a taskforce has been formed in collaboration with the Ministry of Finance to pursue the adoption of IPSAS by 2026.

    Current Status: Not Adopted

  • Investigation and Discipline

    The Ordem dos Contabilistas e Auditores de Moçambique (OCAM) is empowered by Law No. 8/2012 to establish an investigative and disciplinary (I&D) system for professional accountants. OCAM’s internal Resolution No 8/GB/2014 establishes the procedures for the I&D system which is overseen by the Judicial Council of the association. The Judicial Council has four separate divisions: investigation, discipline, rights’ representative, and a tribunal. All committee members are independent, and committees are comprised of members and non-members, such as retired practitioners and lawyers. There is also an administrative court for members to appeal.

    OCAM reports that its system is operational and with the commencement of quality assurance reviews in Q4 2018 and QA review cycles having punitive consequences, its procedures incorporate all the SMO 6 best practices. OCAM notes that as of the date of the assessment, it operationalized an online platform to enhance its recordkeeping and tracking of cases.

    Current Status: Adopted

  • International Financial Reporting Standards

    The financial reporting framework in Mozambique is established under the Commercial Code 2005 and Decree 70/2009 of December 22, 2009. The Commercial Code 2005 establishes the obligation for companies to keep books of accounts while Decree 70/2009 stipulates the accounting standards to be followed.

    Decree 70/2009 revised the General Chart of Accounts to establish an accounting system based on the IFRS. The Accounting System for the Business Sector (SCE) comprises a Chart of Accounts for Large- and Medium-sized Companies (PGC-NIRF) which are based on IFRS as published in November 2008, with certain standards omitted. Large companies are defined as: (i) having a turnover or net asset exceeding 1,275 million Meticais (MZN); or (ii) more than 500 employees; while medium companies are defined as: (i) having a turnover or net assets less than 1,275 million MZN but exceeding 500 million MZN; or (iii) less than 500 but more than 250 employees. Public companies or companies with a majority of public equity along with companies whose equity shares are quoted on the Stock Exchange of Mozambique or those whose shares are listed on any other stock exchange, provided that they have their headquarters in Mozambique as also considered to be large companies. The PGC-NIRF became effective in 2010.

    In addition, a simplified Chart of Accountants for Small and other Companies (PGC-PE) became effective in 2011 for the following types of companies: (i) having a total income and gains under 500 million MZN; (ii) having total net assets under 500 million MZN; or (iii) less than 250 employees.

    Decree 70/2009 explicitly states that the SCE does not apply to institutions and companies in the banking and insurance sectors which are subject to requirements of the Bank of Mozambique (BM) and the Ministry of Finance. Through Notice No. 4/GBM/2007, the BM adopted IFRS as published in 2008 for banks and similar lending and financial institutions. Similarly, in accordance with Diploma Ministerial nº 222/2010, insurance companies are also to apply the abovementioned standards. In practice, however, the Ordem dos Contabilistas e Auditores de Moçambique (OCAM) indicates that both regulators require entities under their supervision to apply IFRS as issued by the IASB.

    The Decree 70/2009 also stipulates that a Regulatory Board of the Accounting Standards, which should be created by the Ministry of Finance, would be responsible for reviewing, adjusting, interpreting, and updating the SCE in Mozambique. Such a standard-setting board has not yet been created. Meanwhile, OCAM has authority under its founding legislation to define technical standards considering international standards. The association, with assistance from PAFA, has drafted a proposal to present to the Ministry of Finance outlining how an independent standard-setting committee would function and be financed with the support of OCAM. The association circulated the proposal to all members, relevant stakeholders, and held two public consultations to receive input. OCAM has also signed agreements with the Mozambican Chamber of Commerce, the Securities Exchange Commission, the BM, and Ministry of Finance to be part of the standard-setting committee. The abovementioned proposal is pending approval by the Ministry as of the time of the assessment.

    Current Status: Partially 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: 10/2021
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