Madagascar

The statutory framework for accounting and auditing in Madagascar is established primarily by Act No. 2003-036 of January 30, 2004 on Commercial Companies, which sets out the requirements for financial reporting, accounting, and statutory audits for corporate entities. Under this framework, all companies are required to prepare financial statements in accordance with the Plan Comptable Général (PCG) issued by the Conseil Supérieur de la Comptabilité (CSC). The PCG, approved by Ministerial Decree No. 2004-272 of February 18, 2004, is based on an earlier version of International Financial Reporting Standards (IFRS).

Companies are permitted to apply full IFRS or the IFRS for Small- and Medium-sized Entities (SMEs) where this results in improved financial reporting; however, such application is not mandated. In practice, entities—particularly subsidiaries of foreign groups—often prepare two sets of financial statements: one in accordance with the PCG for statutory and tax purposes, and another in accordance with IFRS for group reporting. The PCG also provides simplified accounting requirements for micro-entities, including the option to apply the Système Minimal de Trésorerie (SMT) on a cash basis.

Sector-specific accounting frameworks apply to financial institutions and insurance entities. The Commission de Supervision Bancaire et Financière (CSBF) establishes financial reporting requirements for banks and financial institutions under Banking Law No. 95-030 of February 22, 1996, including the application of the Plan Comptable des Établissements de Crédit (PCEC). Insurance companies apply accounting requirements established by the Ministry of Finance and Budget under Decree No. 2007-152 of December 19, 2007. These sectoral frameworks are also based on earlier versions of IFRS.

Statutory audits are required for incorporated and limited liability companies based on size and turnover thresholds defined in the Commercial Companies Act. Auditing standards are established by the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) in accordance with Ordinance No. 92-047 of November 5, 1992 on the Organization of the Profession of Chartered Accountant, as amended. OECFM has adopted International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board for application in the jurisdiction.

The accountancy profession in Madagascar is regulated under Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended by Law No. 96-019 of September 4, 1996 and Law No. 2001-023 of January 2, 2002. The law establishes the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) as the statutory body responsible for regulating the profession.

Under this framework, OECFM is responsible for establishing initial professional development (IPD) and continuing professional development (CPD) requirements for individuals seeking to obtain and maintain the title of Expert comptable et financier. Entry into the profession requires candidates to hold a diploma from an OECFM-accredited higher education institution, successfully complete an entrance examination covering accounting, law, taxation, audit, and management, undertake a minimum of three years of practical experience with an OECFM-registered firm, pass a final professional examination, and defend a thesis. The title is protected under law and membership in OECFM is mandatory for practicing professionals. Members are required to complete a minimum of 40 hours of CPD annually (120 hours over a three-year period).

In accordance with Article 70 of the Ordinance, OECFM is vested with broad regulatory authority over the profession. Its responsibilities include ensuring members’ compliance with ethical and professional standards; organizing and overseeing professional education and training; conducting quality assurance reviews of members; and establishing and administering an investigative and disciplinary system. OECFM is also responsible for setting auditing and ethical standards, maintaining a register of qualified professionals and firms, and representing the profession at both national and international levels.

There is no independent public audit oversight authority in Madagascar.

The regulation of auditors is governed by Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended, which establishes the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) as the body responsible for the oversight of the profession. Individuals holding the title of Expert comptable et financier (Chartered Accountant), which is protected under law, must be registered with OECFM in order to provide audit services.

OECFM is responsible for regulating its members and overseeing the quality of audit services. Its functions include establishing and enforcing ethical and professional standards, conducting quality assurance reviews, and administering an investigation and disciplinary system. Through these responsibilities, OECFM performs the key oversight functions for auditors in the absence of an independent audit oversight authority.

Ordre des Experts Comptables et Financiers de Madagascar (OECFM)

The Ordre des Experts Comptables et Financiers de Madagascar (OECFM), established in 1962 in accordance with Ordonnance No. 62-104 du 1er octobre 1962, is the sole professional accountancy organization in Madagascar and operates as a mandatory membership body for individuals practicing as Experts comptables et financiers (Chartered Accountants).

OECFM’s mandate and responsibilities are defined in Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended. Under this framework, the institute is responsible for regulating the profession, including establishing and enforcing ethical and professional standards; organizing and overseeing professional education and training; conducting quality assurance reviews; and implementing and administering an investigation and disciplinary system. OECFM also maintains the register of qualified professionals and firms and represents the profession at the national and international levels.

In addition, OECFM serves in an advisory capacity to the accounting standard-setting body, the Conseil Supérieur de la Comptabilité (CSC). OECFM is a member of the International Federation of Accountants (IFAC), the Fédération Internationale des Experts-Comptables Francophones (FIDEF), and the Pan African Federation of Accountants (PAFA).

In accordance with Article 70 of Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended, the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for establishing and operating a quality assurance (QA) review system for its members.

OECFM began implementing QA reviews in 2018 with support from the European Union-funded Programme d’Appui à l’Emploi et à l’Intégration Régionale (PROCOM). An initial cycle of reviews was launched, with a number of firms subject to QA inspections. The system has been operationalized in practice; however, implementation has been gradual and not all firms performing audits have been subject to regular review cycles.

While OECFM indicates that its QA review procedures are broadly aligned with the requirements of SMO 1, certain elements remain to be fully formalized and consistently implemented. These include the methodology for selecting firms for review, the formal linkage between QA review findings and the investigative and disciplinary system, and the establishment of a regular and cyclical review process covering all mandatory audits.

Accordingly, a QA review system has been established and is operational, but it does not yet fully incorporate all the requirements of SMO 1.

Current Status: Partially Adopted

Initial and continuing professional development requirements for the title of Expert comptable et financier (Chartered Accountant) are established under Decree No. 92-960 of November 11, 1992. The Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for determining professional education and practical experience requirements, while universities and specialized institutions, including the National Institute of Accounting Sciences and Business Administration, deliver initial professional development (IPD) programs.

IPD requirements include completion of a diploma from an OECFM-accredited institution, successful completion of entrance and final examinations, a minimum of three years of practical experience with an OECFM-registered firm, and the defense of a final thesis. The title is protected under law and individuals must register with OECFM to practice. OECFM also establishes continuing professional development (CPD) requirements, with members required to complete a minimum of 40 hours annually (120 hours over a three-year period).

While elements of the national education system align with aspects of the International Education Standards (IES), including practical experience and continuing professional development requirements, the IES in effect as of the time of the assessment have not been fully adopted or demonstrably incorporated for all professional accountants. In particular, alignment with learning outcomes-based approaches and updated competency requirements remains incomplete.

OECFM has initiated efforts to review national requirements against the IES and identify areas for convergence; however, progress has been constrained by legal and institutional factors, including the absence of fully updated translated materials and the shared responsibilities across multiple stakeholders.

Accordingly, some requirements aligned with the IES are in place, but the standards have not been adopted in their entirety for all professional accountants.

Current Status: Partially Adopted

Under Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended, the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for establishing auditing standards in the jurisdiction.

OECFM has adopted International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) for application in all statutory audits. The standards are adopted by direct reference and are applicable to audits performed by members of OECFM.

Current Status: Adopted

Under Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended, the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for establishing ethical requirements for professional accountants in the jurisdiction. The 2022 edition of the IESBA Code is available in French and is applied by its members.

As the version applied is not the Code in effect as of the time of the assessment, the adoption status is assessed as Partially Adopted.

Current Status: Partially Adopted

Public sector accounting standards in Madagascar are established by the Conseil Supérieur de la Comptabilité (CSC) within the Ministry of Finance and Budget, in accordance with Decree No. 89-161 of June 13, 1989, as amended by Decree No. 98-442 of June 18, 1998.

Since 2006, government entities have been required to apply the Plan Comptable des Opérations Publiques (PCOP). The PCOP is based on a cash-basis framework and incorporates elements of the 2004 version of the International Public Sector Accounting Standards (IPSAS), as well as aspects of the Plan Comptable Général (PCG).

While the PCOP reflects certain IPSAS principles, it does not constitute adoption of IPSAS in their entirety and remains based on an earlier version of the standards.

Accordingly, public sector accounting standards are based on a cash-basis framework with reference to IPSAS, and IPSAS have not been adopted in full.

Current Status: Partially Adopted

Under Ordonnance No. 92-047 du 5 novembre 1992 relative à l’Organisation de la Profession d’Expert Comptable, as amended, the Ordre des Experts Comptables et Financiers de Madagascar (OECFM) is responsible for establishing and administering an investigative and disciplinary (I&D) system for its members.

OECFM’s I&D procedures are set out in its bylaws, including the establishment of an ethics and discipline committee responsible for conducting investigations and reporting findings to a disciplinary chamber, which is responsible for determining and imposing sanctions. Members have the right to appeal decisions, and a government representative participates in the disciplinary process.

The I&D system is operational; however, it does not yet fully incorporate all the requirements of SMO 6. Areas for improvement include strengthening the involvement of non-accountants in the disciplinary process, formalizing the linkage between quality assurance review findings and disciplinary actions, and enhancing public interest aspects such as transparency of outcomes and accessibility of the complaints process.

OECFM has initiated revisions to its bylaws to address these gaps; however, implementation is subject to government approval procedures.

Accordingly, an I&D system has been established and is operational, but it does not yet fully incorporate the requirements of SMO 6.

Current Status: Partially Adopted

Corporate financial reporting standards in Madagascar are established by the Conseil Supérieur de la Comptabilité (CSC) within the Ministry of Finance and Budget. Companies are required to prepare financial statements in accordance with the Plan Comptable Général (PCG), which was introduced in 2005 and is based on an earlier version of International Financial Reporting Standards (IFRS).

The use of IFRS is permitted but not required. Entities may apply full IFRS or the IFRS for Small- and Medium-sized Entities (SMEs) where this results in improved financial reporting; however, companies that elect to do so typically prepare a separate set of financial statements in addition to those prepared under the PCG. In practice, the PCG remains the primary framework for statutory financial reporting.

Sector-specific accounting frameworks apply to financial institutions and insurance entities. Banks and financial institutions are required to apply the Plan Comptable des Établissements de Crédit (PCEC), while insurance companies apply accounting requirements established under the Insurance Accounting Plan. These frameworks are also based on earlier versions of IFRS.

The PCG also provides simplified accounting requirements for micro-entities, including the option to apply the Système Minimal de Trésorerie (SMT) on a cash basis.

While there have been discussions regarding convergence with more recent versions of IFRS, including initiatives involving the Central Bank, IFRS Accounting Standards in effect as of the time of the assessment are not required for application by publicly accountable entities. Accordingly, national standards not converged with IFRS Accounting Standards are applied in the jurisdiction.

Lastly, the use of IFRS and the IFRS for Small- and Medium-sized Entities (SMEs) is permitted but not required, and neither framework has been formally adopted for application in the jurisdiction.

Current Status: Not Adopted

Relevant Organizations

Conseil Supérieur de la Comptabilité (CSC)

Ordre des Experts Comptables et Financiers de Madagascar (OECFM)

Relevant Legislation

Act No. 2003-036 of January 30, 2004 on Commercial Companies

Ministerial Decree No. 2004-272 of February 18, 2004 approving the Plan Comptable Général (PCG)

Order No. 6801/92 MINF / SG determining the equivalence level of DESCF and DEC

Order No. 62-104 of October 19, 1962

Ordinance No. 92-047 of November 5, 1992 related to the Organization of the Profession of Chartered Accountant, amended by Law No. 96-019 of September 4, 1996 and Law No. 2001-023 of January 2, 2002

Relevant Publications

IFRS Foundation, IFRS Application Around the World?Jurisdictional Profile: Madagascar, 16 June 2016.