Tanzania, United Republic of

Member Organizations

Member Organization Associate Other PAOs

  National Board of Accountants and Auditors

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    In Tanzania, all companies are required by the Companies Act of 2002 to prepare financial statements, either in English or Swahili, in compliance with the regulations prescribed by the Ministry of Finance and Planning of Tanzania (MoFP) or the National Board of Accountants and Auditors (NBAA).

    The NBAA, which was established under the Auditors and Accountants (Registration) Act No. 33 of 1972 and operates under the supervision of the MoFP, sets the applicable accounting and auditing standards in Tanzania.

    The NBAA adopted IFRS and IFRS for Small- and Medium-sized Entities (SMEs) for application in Tanzania without modifications and including effective dates in 2004 and 2010, respectively. Following the issuance of IFRS for SMEs in 2009, the NBAA issued Technical Pronouncement No. 3 of October 2009 which adopts all future standards, amendments, and interpretations issued by the IASB and identifies the companies that must apply full IFRS and which companies may use IFRS for SMEs in the preparation of their financial statements. Full IFRS must be applied in the financial statements of all Public Interest Entities (PIEs), which include: (i) listed companies, (ii) banks and financial institutions, (iii) insurance companies, (iv) pension funds, (v) utility companies, (vi) commercial government agencies, (viii) mutual funds, (ix) SACCOs, (x) cooperative societies, (xi) securities brokers, and (xii) all entities which receive payments from the government, except those required to use IPSAS. Additionally, all entities with 100 or more employees or with capital investment of more than Tanzania Shillings (TZS) 800,000,000 (approximately USD 600,000) must also apply full IFRS. Full IFRS or IFRS for SMEs are permitted for companies: (i) that are not PIEs; (ii) with less than 100 employees; or (iii) with capital investment of less than TShs 800,000,000. Furthermore, the use of IFRS is incorporated into the regulations of the Bank of Tanzania, the Tanzania Insurance Regulatory Authority (TIRA), the Dar es Salaam Stock Exchange (DSE), and the Capital Market and Securities Authority (CMSA).

    The Companies Act 2002 obliges all companies to undergo an annual audit unless they meet specific size criteria. However, those conditions have yet to be specified in regulation by the MoFP. In 2004, the NBAA adopted ISA without modifications for application in all statutory audits. Subsequent to the initial adoption, the NBAA has continued to adopt all revisions of ISA without modifications and including effective date. The Companies Act of 2002 states that audits must be conducted by a qualified Certified Public Accountant (CPA) while the Auditors and Accountants (Registration) Act No. 33 of 1972 further specifies that audits must be conducted by a member of the NBAA that holds the qualification of CPA in Public Practice (CPA—PP).

  • Regulation of Accountancy Profession

    The accountancy profession in Tanzania is regulated by the National Board of Accountants and Auditors (NBAA), membership of which is mandatory to practice accountancy in the jurisdiction.

    The NBAA was established under the Auditors and Accountants (Registration) Act No. 33 of 1972 and operates under the supervision of the Ministry of Finance and Planning (MoFP). The responsibilities of the institute are to: (i) set applicable corporate accounting and auditing standards for application in the jurisdiction; (ii) establish initial and continuing professional development (IPD and CPD) and ethical requirements; (iii) operate a quality assurance review system and an investigative and disciplinary system; (iv) certify authorized and approved professional accountants; and (v) maintain and publish a registry of authorized and approved professional accountants.

    The following designations comprise the NBAA’s membership and are protected by the Act: Certified Public Accountant in Public Practice (CPA—PP), Certified Public Accountant (CPA(T)), Graduate Accountant (GA), and Accounting Technician (AT).

    To practice publicly in Tanzania, individuals must obtain the Certified Public Accountant (CPA(T)) designation by fulfilling educational, practical experience, and examination requirements, which the NBAA reports are in line with the IES, and become a member of the NBAA. Individuals must then be registered as a member of the NBAA on its registry of Authorized Accountants. In order to offer auditing services, individuals must obtain the CPA–PP designation, become a member of the NBAA, and be registered on its registry of Authorized Auditors. The CPA–PP qualification is parallel to the CPA(T) qualification but individuals must have completed their practical training under the supervision of another CPA–PP member. All members of the NBAA must renew their registration on the NBAA’s respective registries on an annual basis.

    Furthermore, foreign-qualification certificate holders must be registered with the NBAA and pass a minimum of three papers under the NBAA syllabus in order to work as an accountant or auditor in Tanzania.

    While all individuals who wish to practice accountancy in Tanzania must be members of the NBAA, the Tanzanian Association of Accountants (TAA), established under the Friendly Societies Act of 1954, also unites professional and aspiring accountants on a voluntary basis from six recognized foreign PAOs.

    The TAA only represents the profession and does not have any regulatory functions. Nonetheless, individuals who do volutanrily join, upon successful completion of the TAA application form and fee, are subject to the TAA’s Code of Best Practice and are obligated to comply with their qualifying organizations’ IPD and CPD requirements. The TAA confers the designations of Associate (A.T.A.A.) and Fellow (F.T.A.A.) to its Full Members and categorizes non-full membership into Provisional Associates and Accounting Technicians.

    Finally, according to the World Bank’s 2005 Report on Observance of Standards and Codes, auditors of banks and non-banking financial institutions, securities brokers, and insurance companies are also subject to additional regulation. Banks and other financial institutions must appoint an auditor who is registered with the Bank of Tanzania (BOT). BOT-registered auditors must be a CPA-PP, confirm in writing their competence, coverage of specific audit areas, compliance with CPD requirements, and provide information on partners or staff of their firm. The Banking and Financial Institutions Act 2006 requires audit firm rotation every three years. Securities dealers are required to appoint an auditor that meets additional legislative requirements related to independence. Lastly, insurance companies must have their auditors approved by the Commissioner for Insurance. In practice, the company appoints the auditor and the Commissioner will ensure that the auditor is registered with the NBAA before granting approval.

  • Audit Oversight Arrangements

    The audit profession is self-regulated and there is no independent audit oversight arrangements.

    Auditors in Tanzania are regulated by the National Board of Accountants and Auditors (NBAA) which was established under the Auditors and Accountants (Registration) Act No. 33 of 1972 and operates under the supervision of the Ministry of Finance and Planning (MoFP).

    The responsibilities of the institute are to: (i) set applicable corporate auditing standards for application in the jurisdiction; (ii) establish initial and continuing professional development (IPD and CPD) and ethical requirements; (iii) operate a quality assurance review system and an investigative and disciplinary system; (iv) certify authorized auditors; and (v) maintain and publish a registry of authorized auditors.

    In order to offer auditing services, individuals must obtain the CPA–PP designation by fulfilling education, practical, and examination requirements and subsequently, become a member of the NBAA and be registered on the NBAA’s Authorized Auditors registry. The practical experience component must have been completed under the supervision of another CPA–PP and CPA–PPs are subject to annual renewal and registration on NBAA’s registry.

    Additionally, according to the World Bank’s 2005 Report on Observance of Standards and Codes, auditors of banks and non-banking financial institutions, securities brokers, and insurance companies are also subject to additional regulation. Banks and other financial institutions must appoint an auditor who is registered with the Bank of Tanzania (BOT). BOT-registered auditors must be a CPA-PP, confirm in writing their competence, coverage of specific audit areas, compliance with CPD requirements, and provide information on partners or staff of their firm. The Banking and Financial Institutions Act requires audit firm rotation every three years.

    Securities dealers are required to appoint an auditor that meets additional legislative requirements related to independence. Lastly, insurance companies must have their auditors approved by the Commissioner of Insurance. In practice the company appoints the auditor and the Commissioner will ensure that the auditor is registered with the NBAA before granting approval.

  • Professional Accountancy Organizations

    The National Board of Accountants and Auditors (NBAA)

    The NBAA was established under the Auditors and Accountants (Registration) Act No. 33 of 1972 and operates under the supervision of the Ministry of Finance and Planning (MoFP). Membership of the institute is mandatory in order to practice accountancy in the jurisdiction.

    The following categories comprise the NBAA’s membership and these designations are protected by the Act: Certified Public Accountant in Public Practice (CPA—PP), Certified Public Accountant (CPA(T)), Graduate Accountant (GA), and Accounting Technician (AT).

    The responsibilities of the institute are to: (i) set applicable corporate accounting and auditing standards for application in the jurisdiction; (ii) establish initial and continuing professional development (IPD and CPD) and ethical requirements; (iii) operate a quality assurance review system and an investigative and disciplinary system; (iv) certify authorized and approved professional accountants; and (v) maintain and publish a registry of authorized and approved professional accountants.

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

    The Tanzania Association of Accountants (TAA)

    The TAA, established under the Friendly Societies Act of 1954, unites professional and aspiring accountants on a voluntary basis from six recognized foreign PAOs. The TAA sets a Code of Best Practice for its members and mandates its members’ compliance with the IPD and CPD requirements of their qualifying PAO. The TAA is not a member of IFAC.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    The Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments authorize the National Board of Accountants and Auditors (NBAA) to establish a quality assurance (QA) review system for all audits.

    In 2005, the NBAA operationalized its QA review system. The NBAA reports that its review cycle is three years and audits of listed companies are subject to reviews at least once each cycle while other audit engagements are subject to engagement reviews whereby a sample of attest engagement files are reviewed at least once in a review cycle.

    The NBAA states that it has adopted ISQC 1 and developed its QA review system in line with the SMO 1 requirements.

    Current Status: Adopted

  • International Education Standards

    The Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments empower the National Board of Accountants and Auditors (NBAA) to set initial and continuing professional development requirements (IPD and CPD) for professional accountants while NBAA-approved training institutions are responsible for delivering the accountancy education.

    Candidates pursuing the Certified Public Accountant qualification and NBAA membership must fulfill IPD requirements such as educational, practical experience, and examination requirements, which the NBAA reports was developed in line with the IES as of 2014. CPD requirements, on the other hand, are not fully aligned with IES requirements apart from Certified Public Accountants in Public Practice (CPA-PP).

    Additionally, individuals with foreign qualifications must pass examinations on local taxation and business law prior to joining the NBAA.

    While all individuals who wish to practice accountancy in Tanzania must be members of the NBAA, the Tanzanian Association of Accountants (TAA), in accordance with the Friendly Societies Act of 1954, voluntarily unites foreign-qualified professional and aspiring accountants working in Tanzania. The TAA mandates its members’ compliance with its original qualifying professional accountancy organization’s IPD and CPD requirements which are reported to be in line with IES requirements.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Auditors and Accountants (Registration) Act No. 33 of 1972 establish the National Board of Accountants and Auditors (NBAA) as the auditing standard-setter in Tanzania.

    In 2004, the NBAA adopted ISA without modifications for application in all audits in Tanzania. After the initial adoption, NBAA reports it has continued to adopt all revisions of ISA without modifications and including effective date.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Auditors and Accountants (Registration) Act No. 33 of 1972 permits the National Board of Accountants and Auditors (NBAA) to set ethical requirements for all professional accountants.

    The NBAA reports that it has adopted the IESBA Code of Ethics without modifications and any revisions to the Code are automatically adopted. Accordingly, the NBAA indicates it adopted the 2015 IESBA Code in July 2016.

    The Tanzanian Association of Accountants, in accordance with the Friendly Societies Act of 1954, voluntarily unites foreign-qualified professional and aspiring accountants working in Tanzania. The TAA has a Code of Best Practice for its members which is not in line with the IESBA Code of Ethics; however, all TAA members must be members of the NBAA and are subject to its professional standards.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Tanzanian government is responsible for adopting public sector accounting standards and issued a pronouncement in 2012 adopting accrual-basis IPSAS for both central and local governments.

    Current Status: Adopted

  • Investigation and Discipline

    Under the Auditors and Accountants (Registration) Act No. 33 of 1972 and its amendments, the National Board of Accountants and Auditors (NBAA) is responsible for establishing an investigative and disciplinary (I&D) system for all professional accountants.

    The institute has established a Disciplinary and Ethics Committee to carry out the I&D processes and indicates that it is working to strengthen the system to meet the SMO 6 requirements. The NBAA expects to have new By-Laws approved and gazetted by the end of April 2017 that will allow the institute to enhance its I&D procedures. As of February 2017, the current I&D system falls short of fulfilling all the SMO 6 requirements as there are no separate investigative and disciplinary processes.

    The Tanzanian Association of Accountants (TAA), in accordance with the Friendly Societies Act of 1954, voluntarily unites foreign-qualified professional and aspiring accountants working in Tanzania. All TAA members are subject to the NBAA’s I&D system.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Companies Act of 2002 requires all companies to prepare financial statements in compliance with the regulations prescribed by the Minister for Finance or the National Board of Accountants and Auditors (NBAA).

    The NBAA, which was established under the Auditors and Accountants (Registration) Act No. 33 of 1972, has adopted the IFRS and IFRS for Small- and Medium-sized Entities (SMEs) for application in Tanzania without modifications and including effective dates in 2004 and 2010, respectively. Future standards, amendments, and interpretations issued by the IASB Board are also covered by the institute’s adoption pronouncement.

    Listed companies, Public Interest Entities, all entities which receive payments from the government aside from those required to use IPSAS, and all entities with 100 or more employees or with capital investment of more than Tanzania Shillings (TZS) 800,000,000 (approximately USD 600,000) are required to use full IFRS.

    IFRS for SMEs are permitted for use by companies that are not publicly accountable, have less than 100 employees, or have a capital investment of less than TZS 800,000,000.

    Additionally, the use of IFRS is incorporated into the regulations of the Bank of Tanzania, the Tanzania Insurance Regulatory Authority (TIRA), the Dar es Salaam Stock Exchange (DSE), and the Capital Market and Securities Authority (CMSA).

    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: 06/2017
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