Zambia

Member Organizations

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  Zambia Institute of Chartered Accountants

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Accounting Framework

    In Zambia, the Companies Act of 1994 and the Accountants Act of 2008 govern the corporate financial reporting requirements. The Companies Act requires every company to keep accounting records but does not specify the applicable accounting standards. The Accountants Act establishes the Zambian Institute of Chartered Accountants (ZiCA) as the accounting standard-setter. Accordingly, ZiCA has adopted IFRS since 2005 as issued by the IASB without modifications and including effective date. In 2010, ZiCA established a three-tier reporting framework whereby public interest entities (PIEs), listed companies, and government-owned companies are required to use full IFRS. Both banks and listed companies must publish their financial statements in a newspaper that circulates throughout Zambia.

    Economically significant companies, defined as companies that are not PIEs or quoted on the stock exchange with turnover of ZMW 20 billion (approximately (USD 2 million) and above, may apply either IFRS or the IFRS for Small- and Medium-sized Entities (SMEs).

    Finally, micro and small enterprises, defined as entities with an annual turnover below ZMW 20 million, may apply the Zambian Financial Reporting Standard for Micro and Small Entities. The Zambian Financial Reporting Standard for Micro and Small Entities is a simplified version of the IFRS for SMEs.

    Auditing Framework

    The Companies Act of 1994 requires every company to undergo an annual statutory audit. Under the Accountants Act of 2008, ZiCA is the auditing standard-setter and has adopted ISA since 2005 as issued by the IAASB without modifications and including effective date for application in Zambia.

    The Securities Act 2016 and Lusaka Stock Exchange Listing Rules require auditors of listed companies to be practicing members of ZiCA and apply ZiCA’s adopted auditing standards.

  • Regulation of Accountancy Profession

    In Zambia, the Zambia Institute of Chartered Accountants (ZiCA) regulates the accountancy profession under the Accountants Act of 2008.

    ZiCA is responsible for the following: (i) setting corporate accounting standards for application in Zambia; (ii) setting corporate auditing standards; (iii) establishing initial and continuing professional development requirements and accrediting tertiary education providers; (iv) setting ethical requirements; (v) carrying out quality assurance reviews for its practicing members; (vi) maintaining a registry of its registered and practicing members; and (vii) establishing an investigative and disciplinary system for its members as part of public interest considerations.

    Individuals aspiring to attain the Chartered Accountant (CA) qualification, which is a protected title under the Accountants Act of 2008, must have a Bachelor’s degree from a ZiCA accredited institution, successfully pass the relevant professional-level examinations of ZiCA, complete three years of practical experience under a registered CA and then apply for membership of ZiCA. ZiCA is the only organization in Zambia permitted to grant the equivalent of a Chartered Accountant designation by issuing qualified individuals a registration certificate after their application has been approved. Individuals registered as CA with ZiCA may act as practitioners, tax advisors, and tax consultants.

    To publicly offer accounting services, registered CAs of ZiCA must apply for an audit or a non-audit practicing certificate. To apply for a certificate, candidates must have satisfactorily complied with professional-level education and training requirements, passed competence examinations set by ZiCA for practicing certification purposes, and obtained seven years of practical experience. CAs must have completed four of their seven years of practical experience in the area of audit and assurance in order to apply for the audit practicing certificate. ZiCA maintains a register of CAs that have been issued an audit or non-audit practicing certificate. Practitioners must renew their certificates on an annual basis.

    Individuals with foreign qualifications from recognized professional accountancy organizations may also apply for ZiCA membership as a CA, and subsequently a practicing certificate, after passing additional examinations that assesses knowledge on local tax and business legislation. If an individual has an accounting qualification from another institute that is not identified in ZiCA’s schedule, ZiCA has established criteria for evaluating and assessing the qualification for an appropriate designation and categorization within ZiCA membership.

    In addition, financial sector regulators set additional requirements for auditors that provide services for entities under their supervision. For example, the Insurance Act stipulates that annual audits must be conducted by an independent auditor that is registered and holding a ZiCA practicing certificate and approved by the Pensions and Insurance Authority. The Bank of Zambia also approves appointments of auditors for banks and will only approve auditors who are registered, possess practicing licenses, and have the capacity to audit the particular bank. The Bank also requires the rotation of engagement partners for every three years and limits the engagement period to ten years.

    Similarly, the Securities Act 2016 and Lusaka Stock Exchange Listing Rules require auditors of listed companies to be practicing members of ZiCA. The Securities Act 2016 was passed in December 2016 and the law reaffirms that auditors must be members in good standing with ZiCA and must meet minimum criteria specified by the Securities Exchange Commission. In addition, the new law requires auditors to report on business’ internal controls.

  • Audit Oversight Arrangements

    There is no independent audit oversight arrangements in Zambia. Auditors in Zambia are regulated by the Zambia Institute of Chartered Accountants (ZiCA). ZiCA was established under the Accountants Act 1982 that was subsequently repealed and replaced by the Accountants Act 2008.

    According to the Act, ZiCA is responsible for the following: (i) setting corporate auditing standards; (ii) establishing initial and continuing professional development requirements and accrediting tertiary education providers; (iii) setting ethical requirements; (iv) carrying out quality assurance reviews for its practicing members; (v) maintaining a registry of its registered and practicing members; and (vi) establishing an investigative and disciplinary system for its members as part of public interest considerations.

    In order to provide auditing services to the general public, individuals must hold the Chartered Accountant (CA) designation, apply for ZiCA membership, and then be issued a registration certificate. Once registered as CA, individuals must apply for an audit practicing certificate. Practitioners must renew their certificates on an annual basis.

    In addition, financial sector regulators set additional requirements for auditors that provide services for entities under their supervision. For example, the Insurance Act stipulates that annual audits must be conducted by an independent auditor that is registered and holding a ZiCA practicing certificate and approved by the Pensions and Insurance Authority. The Bank of Zambia also approves appointments of auditors for banks and will only approve auditors who are registered, possess practicing licenses, and have the capacity to audit the particular bank. The Bank also requires the rotation of engagement partners for every three years and limits the engagement period to ten years. Lastly, the Securities Act 2016 and Lusaka Stock Exchange Listing Rules require auditors of listed companies to be practicing members of ZiCA.

  • Professional Accountancy Organizations

    The Zambia Institute of Chartered Accountants (ZiCA)

    ZiCA is a mandatory membership body for the accountancy profession in Zambia. It was established under the Accountants Act 1982 which was subsequently repealed and replaced by the Accountants Act of 2008. Under the Act, ZiCA is responsible for the following: (i) setting corporate accounting standards for application in Zambia; (ii) setting corporate auditing standards; (iii) establishing initial and continuing professional development requirements and accrediting tertiary education providers; (iv) setting ethical requirements; (v) carrying out quality assurance reviews for its practicing members; (vi) maintaining a registry of its registered and practicing members; and (vii) establishing an investigative and disciplinary system for its members as part of public interest considerations.

    ZiCA’s membership includes: Graduate, Technician, Licentiate, Professional (Chartered Accountant) and Fellow / Associate. It is the only organization in Zambia permitted to grant qualified individuals with the Chartered Accountant designation.

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

  • Projects or Other Information

    In 2015 ZiCA commenced two projects to strengthen the regulation of the profession. First, ZiCA adopted amendments to the Accountants Act 2008 to establish a Standards and Regulatory Board within the institute. The Board is comprised of independent members outside of the accounting profession such as banking, insurance, etc. The Board is responsible for oversight of practice reviews, standard-setting, and disciplinary actions and is funded by the ZiCA.

    Second, after its Education and Training Committee’s five-year review of its Accountancy Programme in 2015 and in consultation with various stakeholders, ZiCA decided to rebrand its current qualifications to CA Zambia and the Diploma in Accounting in order to align with recognized worldwide qualifications. The new qualifications will be changed effective June 2017 with the first examinations expected at the same time. More information on the transition to the new qualifications can be found here.

Adoption of International Standards

  • Quality Assurance

    Under the Accountants Act 2008, Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing a quality assurance review system. ZiCA established a Practice Review Department and from 2009–2014 contracted the Association of Chartered Certified Accountants (ACCA) for a period of six years to carry out the reviews and build ZiCA’s internal capacity to conduct the reviews.

    In December 2014, the contract with ACCA expired and since then ZiCA states that it is carrying out all reviews in accordance with the requirements of SMO 1.

    Current Status: Adopted

  • International Education Standards

    In accordance with the Accountants Act 2008, Zambia Institute of Chartered Accountants (ZiCA) is responsible for setting initial and continuing professional development (IPD and CPD) requirements for the profession. The ZiCA Accountancy Programme was introduced in 2007 and is a three-tiered professional program consisting of Technician, Licentiate, and Professional (Chartered Accountant) qualifications. ZiCA indicates that its IPD and CPD requirements are line with IES 1–8 and its Education and Training Committee is responsible for reviewing and revising the content of its requirements every five years. The institute completed its review of the requirements in 2015 and is rebranding its current qualifications in 2017 in order to align with recognized worldwide qualifications.

    Members holding foreign qualifications must also take an examination that assesses knowledge on local tax and business legislation prior to attaining a practicing certificate.

    Current Status: Adopted

  • International Standards on Auditing

    Under the Accountants Act 2008, the Zambia Institute of Chartered Accountants (ZiCA) is legally mandated to set auditing standards for application in Zambia. Since 2005, ZiCA has adopted ISA as issued by the IAASB without modification and including effective date. ZiCA indicates the 2016 version of ISA is applicable in the jurisdiction.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing ethical requirements as mandated by the Accountants Act 2008.

    ZiCA reports it has adopted the IESBA Code of Ethics in effect as of the time of this report and established standard-setting procedures to incorporate updates and revisions into the Code on an ongoing basis.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Accountants Act 2008 stipulates that the Zambia Institute of Chartered Accountants (ZiCA) is to adopt, promote, and enforce internationally comparable practice standards, which include public sector accounting standards.

    ZiCA reports that cash-basis IPSAS are being used and that the adoption of full accrual IPSAS is expected by 2020. Funds to implement this project have been secured from the World Bank and, with the procurement of a consultant to do a feasibility study now underway, ZiCA states it will continue to play an advisory role in the implementation process.

    Current Status: Partially Adopted

  • Investigation and Discipline

    Under the Accountants Act 2008, the Zambia Institute of Chartered Accountants is responsible for establishing an investigative and disciplinary (I&D) system for the profession. Accordingly, it has established an I&D system that meets the SMO 6 requirements for all professional accountants.

    Current Status: Adopted

  • International Financial Reporting Standards

    The Zambia Institute of Chartered Accountants (ZiCA) is responsible for setting corporate accounting standards in accordance with its mandate under the Accountants Act 2008. Since 2005, IFRS have been adopted as issued by the IASB including effective dates.

    In 2010, ZICA has established a three-tier reporting framework whereby public interest entities (PIEs), listed companies, and government-owned companies are required to use full IFRS. Economically significant companies, defined as companies that are not PIEs or quoted on the stock exchange with turnover of ZMW 20 billion (approximately USD 2 million) and above, may choose between IFRS and the IFRS for Small- and Medium-sized Entities. Finally, micro and small enterprises may apply the Zambian Financial Reporting Standard for Micro and Small Entities.

    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: 10/2017
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