Sierra Leone

Member Organizations

Member Organization Associate Other PAOs

  Institute of Chartered Accountants of Sierra Leone

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The Companies Act of 2009 contains basic requirements for the financial reporting of all companies incorporated in Sierra Leone, prescribing the preparation, presentation, and publication of all financial statements, including the disclosures they are to contain and that they are to be audited.

    The Companies Act 2009 requires the application of IFRS as adopted by the Institute of Chartered Accountants of Sierra Leone (ICASL). The ICASL delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate & Institutional Governance (CSAAG), which operates under the aegis of the Sierra Leone Accountability Foundation (SLAF) Limited. The SLAF, which was established in 2009, is a multi-stakeholder, independent standard-setting and monitoring body for the accounting and auditing profession. The CSAAG has adopted Composite Financial Reporting Standard for Public and Private Not For Profit Entities (CS 1) as the National Public Benefit Entity Standard for listed companies, banks, and insurance companies. CS 1 is based on full IFRS as issued by the IASB. The CSAAG also adopted IFRS for SMEs under CSAAG BPR2/2009, Board Paper Resolution 29, December 2009. All other entities are permitted to use IFRS or IFRS for SMEs.

    Although the Companies Act also contains extensive provisions on auditors’ obligations and their appointment, it does not specify which auditing standards are to be applied for audits. De facto, the ICSAL is the body responsible for setting auditing standards and has delegated its responsibility to the CSAAG. The CSAAG adopted Clarified ISA for application in audits of listed entities. It is not clear what standards are to be applied in audits of other entities. Under the ICASL Act of 1988, only firms and individuals who have been licensed by the ICASL are authorized to conduct audits of private entities that lead to the issuance of an external auditor’s opinion. The Audit Service of Sierra Leone is empowered to audit the public sector under separate legislation.

    In addition to some of the requirements of the Companies Act, under the Banking Act 2000 and the Other Financial Services Act 2001, banks and non-bank financial institutions are subject to additional financial reporting requirements established by the Bank of Sierra Leone. These financial institutions must apply IFRS in the preparation of financial statements and have them audited by a member of the ICASL, with the appointment of such auditors requiring approval by the Bank of Sierra Leone.

    The mandate of the SLAF and the respective responsibilities of all the bodies involved in the legal and regulatory framework need to be clarified. Also, clarifications are needed on whether regulated entities such as listed and insurance companies and others are subject to additional requirements.

  • Regulation of Accountancy Profession

    The self-regulated Institute of Chartered Accountants of Sierra Leone (ICASL) is responsible for regulating professional accountants providing services to the private sector in accordance with the ICASL Act of 1988. The Audit Service of Sierra Leone regulates the public sector.

    The ICASL Act of 1988 empowers the institute to: (i) educate and train professional accountants; (ii) establish professional standards and discipline for the profession; and (iii) promote the collective interest of its members.

    Candidates for ICASL membership are required to complete a program of professional accountancy education, have three years of practical experience, and pass final examinations. According to a joint agreement with the ICASL, the Association of Chartered Certified Accountants is responsible for the delivery of the accountancy education program and administering the final examinations.

    Under the ICASL Act, only firms and individuals who have been licensed by the ICASL are authorized to conduct audits of private entities that lead to the issuance of an external auditor’s opinion.

  • Audit Oversight Arrangements

    There is no independent audit oversight arrangement in Sierra Leone. Provision of auditing services is regulated by the Institute of Chartered Accountants of Sierra Leone (ICASL), under the ICASL Act of 1988. Under the Act, only firms and individuals who have been licensed by the ICASL are authorized to conduct audits of private entities that lead to the issuance of an external auditor’s opinion. The institute is authorized to (i) educate and train professional accountants; (ii) establish professional standards and discipline for the profession; and (iii) promote the collective interest of its members.

    The role of the Sierra Leone Accountability Foundation, if any, in this respect needs to be clarified.

  • Professional Accountancy Organizations

    The Institute of Chartered Accountants of Sierra Leone (ICASL) was established under the ICASL Act of 1988, which authorizes the institute to (i) educate and train professional accountants; (ii) establish professional standards and discipline for the profession; and (iii) promote the collective interest of its members. Only firms and individuals who have been licensed by the ICASL are authorized to conduct audits of private entities that lead to the issuance of an external auditor’s opinion.

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

  • Projects or Other Information

    From 2012–2015, the World Bank’s International Development Fund supported the Institute of Chartered Accountants of Sierra Leone (ICASL) by providing a grant to help bring about reform of the accounting and auditing sectors of Sierra Leone. The primary objectives of the project were to (i) achieve full compliance with some of its mandatory membership obligations to the International Federation of Accountants; (ii) undertake preparatory work for future compliance with IFAC’s SMOs; and (iii) strengthen its institutional structure to sustain its ongoing reform. While the ICASL succeeded in creating the mechanisms required for implementing the reforms, the challenge now lies in effective implementation of the processes, which is being resisted by some stakeholders in the jurisdiction.

    Although there is an initial design of the quality assurance review system and the foundation of the educational system for professional accountants has been developed, they have not been implemented.

    The ICASL also reports that steps have been taken to improve the governance arrangements of the Institute by drafting a new ICASL Act that provides greater authority to the director of the institute, which would more evenly balance that authority with the powers of the institute’s Council and reduce the scope for conflicts of interest within the Council—which have an adverse impact on the operations of the institute. The finalization of the Act has, however, been pending since 2011.

    The amended Act is also expected to give the ICASL exclusive control over the use of the term “accountant” to permit the development of the professional accountancy education system in accordance with IES and to empower the director of the institute’s Secretariat to incorporate the IES. The expected adoption date was December 2015, but there has been no indication of progress in this matter.

Adoption of International Standards

  • Quality Assurance

    Although Sections 9 and 10 of the ICASL Act authorize the Institute of Chartered Accountants of Sierra Leone (ICASL) to establish a quality assurance (QA) system, there is no QA review system in place in Sierra Leone. The ICASL, in cooperation with the Audit Service of Sierra Leone and the Sierra Leone Accountability Foundation, is working on developing a QA system that is aligned with the requirements of SMO 1. The ICASL reports that the initial design of the system has been completed; however, the implementation of the system has not commenced due to lack of buy-in from the stakeholders. Since 2011, the ICASL has reported that a new ICASL Act has been planned to introduce a requirement for mandatory QA reviews in the jurisdiction and to enable long-term sustainability of funding of the reviews; however, the finalization has been continuously postponed.

    Current Status: Not Adopted

  • International Education Standards

    The legal and regulatory framework underlying education of professional accountants in the jurisdiction and the bodies involved in the process need to be clarified.

    Candidates for membership in the Institute of Chartered Accountants of Sierra Leone (ICASL) are required to complete a program of professional accountancy education, have three years of practical experience and pass final examinations. According to a joint agreement with ICASL, the Association of Chartered Certified Accountants delivers the accountancy education program and administers the final examinations.

    The ICASL reports that the requirements of IES 4 to IES 8 have been incorporated into a new education and training system designed with the assistance of consultants from the University of Cape Town. A pilot implementation has been slow to start, however, and significant resistance to change is yet to be overcome.

    Although some of the IES requirements appear to be in place, the extent of overall compliance with IES is not clear.

    Current Status: Partially Adopted

  • International Standards on Auditing

    Under the Companies Act 2009, the responsibility for the adoption of auditing standards for the private sector lies with the Institute of Chartered Accountants of Sierra Leone, which has delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate & Institutional Governance (CSAAG). In 2011, the CSAAG adopted the Clarified ISA to be applied in audits of listed entities. The World Bank has provided funding for the training of firms and the development of a monitoring and compliance mechanism. The Guide to Using International Standards on Auditing in the Audits of Small and Medium-Sized Entities was made publicly available to assist auditors of SMPs.

    It is not clear what standards are mandatory for application in the audits of other companies, whether there are plans to extend the scope of mandatory application of ISA to include other types of companies, and whether the standards adopted by CSAAG have legal backing. In addition, the due process for the adoption of ISA needs to be clarified.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    In accordance with the Institute of Chartered Accountants of Sierra Leone (ICASL) Act, the ICASL is responsible for setting ethical requirements for its members. Although the ICASL has implemented some ethical requirements, it has not adopted the IESBA Code of Ethics. The ICASL has reported plans to adopt the IESBA Code and to establish related monitoring mechanisms, an enforcement framework, and related training programs; however, no progress has been reported.

    Current Status: Not Adopted

  • International Public Sector Accounting Standards

    Under Section 119 (3) of the 1991 Constitution of Sierra Leone, the Audit Service of Sierra Leone, the Government Auditor, is responsible for approving applicable accounting and auditing standards for the public sector. As part of a World Bank-financed project, cash-basis IPSAS have been adopted for the preparation of annual financial statements by all local councils. Although there seem to be no definite plans to adopt accrual-based IPSAS, the Institute of Chartered Accountants of Sierra Leone reports that it is in the process of developing a framework for the transition to accrual-based IPSAS, which is expected to be completed in 2016.

    Current Status: Partially Adopted

  • Investigation and Discipline

    The Institute of Chartered Accountants of Sierra Leone (ICASL) by-laws authorize the ICASL to investigate and discipline its members. The ICASL reports that its system falls short of the requirements of SMO 6 in certain areas. Since 2011, however, it has been planning to revise its I&D system to bring it fully in line with the structural and procedural requirements of SMO 6.

    It is not clear whether all professional accountants in the jurisdiction are subject to the ICASL’s I&D system.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Companies Act 2009 requires application of IFRS as adopted by the Institute of Chartered Accountants of Sierra Leone (ICASL). The ICASL delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate & Institutional Governance (CSAAG), which operates under the aegis of the Sierra Leone Accountability Foundation (SLAF) Limited. The SLAF, established in 2009, is a multi-stakeholder, independent standard-setting and monitoring body for the accounting and auditing profession.

    The CSAAG has adopted CS1, the Composite Financial Reporting Standard for Public and Private Not For Profit Entities as the National Public Benefit Entity Standard for listed companies, banks, and insurance companies. CS1 is based on the full IFRS as issued by the IASB. The CSAAG also adopted IFRS for SMEs under CSAAG BPR2/2009, Board Paper Resolution 29, December 2009, with an effective date of January 2010. All other entities are permitted to use IFRS or IFRS for SMEs.

    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
We welcome feedback. Please email compliance@ifac.org

Thank you for your interest in our publications. These valuable works are the product of substantial time, effort and resources, which you acknowledge by accepting the following terms of use. You may not reproduce, store, transmit in any form or by any means, with the exception of non-commercial use (e.g., professional and personal reference and research work), translate, modify or create derivative works or adaptations based on such publications, or any part thereof, without the prior written permission of IFAC.

Our reproduction and translation policies, as well as our online permission request and inquiry system, are accessible on the Permissions Information web page.

For additional information, please read our website Terms of Use. ALL RIGHTS RESERVED.