Zambia

Accounting Framework

In Zambia, the Companies Act of 2017 and the Accountants Act of 2008 govern corporate financial reporting requirements. The Companies Act requires every company to maintain accounting records but does not prescribe the applicable accounting standards. The Accountants Act establishes the Zambia Institute of Chartered Accountants (ZiCA) as the accounting standard-setter. Accordingly, ZiCA has adopted International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) without modification and including effective dates since 2005.

In 2010, ZiCA established a three-tier financial reporting framework whereby public interest entities (PIEs), listed companies, and government-owned companies are required to apply full IFRS. Banks and listed companies are required to publish their financial statements in a newspaper circulating throughout Zambia.

Economically significant companies, defined as companies that are not PIEs or listed on the stock exchange with turnover of ZMW 20 million (approximately USD 1 million) and above, may apply either full IFRS or the IFRS for Small- and Medium-sized Entities (SMEs).

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

Auditing Framework

The Companies Act of 2017 requires every public interest entity (PIE) to undergo an annual statutory audit. Under the Accountants Act of 2008, ZiCA is the auditing standard-setter and has adopted International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) without modification and including effective dates since 2005.

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

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

ZiCA is responsible for: (i) setting accounting standards for application in Zambia; (ii) setting auditing standards; (iii) establishing initial and continuing professional development requirements and approving tertiary education providers offering the ZiCA professional qualification and diploma programs; (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 and operating an investigative and disciplinary system for its members in the public interest.

Individuals aspiring to attain the Chartered Accountant (CA) designation, which is a protected title under the Accountants Act of 2008, must successfully complete the relevant professional-level examinations recognized by ZiCA, complete three years of practical experience under a registered CA, and apply for membership with ZiCA. ZiCA is the only organization in Zambia authorized to award the Chartered Accountant designation by issuing a registration certificate upon approval of an applicant’s membership. Individuals registered as CAs may act as practitioners, tax advisors, and tax consultants.

To publicly offer accounting services, registered CAs must obtain either an audit practicing certificate or a non-audit practicing certificate. To apply for a practicing certificate, candidates must have satisfied the professional-level education and training requirements, obtained seven years of practical experience, and passed competence examinations set by ZiCA for practicing certification purposes. Applicants for an audit practicing certificate must have completed seven years of practical experience specifically in audit and assurance, while applicants for a non-audit practicing certificate may draw their seven years of experience from broader accounting-related roles. Practicing certificates are renewed annually, and ZiCA maintains a public register of certificate holders.

Individuals holding foreign qualifications from recognized professional accountancy organizations may apply for ZiCA membership as a CA and subsequently for a practicing certificate, subject to passing additional examinations assessing knowledge of local tax and business legislation. Where qualifications are not listed in ZiCA’s schedule of recognized bodies, ZiCA applies established criteria to evaluate and determine the appropriate membership designation.

In addition to ZiCA’s regulatory oversight, financial sector regulators impose additional requirements on auditors serving entities under their supervision. For example, the Insurance Act requires annual audits to be conducted by independent auditors registered with ZiCA and approved by the Pensions and Insurance Authority. The Bank of Zambia approves the appointment of auditors for banks and requires auditors to be registered, hold valid practicing certificates, and demonstrate appropriate capacity. The Bank also mandates engagement partner rotation every three years and limits audit firm tenure to ten years.

Similarly, the Securities Act 2016 and the Lusaka Stock Exchange Listing Rules require auditors of listed companies to be practicing members of ZiCA and in good standing. The Securities framework also requires auditors to report on internal controls of regulated entities.

Auditors in Zambia are regulated by the Zambia Institute of Chartered Accountants (ZiCA) under the Accountants Act of 2008. Oversight of audit regulation activities is conducted through ZiCA’s Directorate of Standards and Regulation, which reports to the Standards and Regulatory Board.

Under the Act, ZiCA is responsible for: (i) setting auditing standards; (ii) establishing initial and continuing professional development requirements; (iii) setting ethical requirements; (iv) conducting quality assurance reviews of practicing members; (v) maintaining a registry of registered and practicing members; and (vi) operating an investigative and disciplinary system in the public interest.

To provide audit services to the public, individuals must obtain an audit practicing certificate from ZiCA. Applicants must have satisfied the professional-level education and training requirements, obtained seven years of practical experience specifically in audit and assurance, and passed competence examinations established by ZiCA. Audit practicing certificates are renewed annually.

In addition to ZiCA’s oversight, sector regulators impose further requirements for auditors of regulated entities. For example, the Insurance Act requires auditors to be registered with ZiCA, hold a valid practicing certificate, and be approved by the Pensions and Insurance Authority. The Bank of Zambia approves the appointment of auditors for banks and requires engagement partner rotation every three years and limits audit firm tenure to ten years. The Securities Act 2016 and Lusaka Stock Exchange Listing Rules require auditors of listed entities to be practicing members of ZiCA in good standing.

There is no separate independent public audit oversight authority established by law; audit oversight functions are exercised within the statutory mandate of ZiCA.

The Zambia Institute of Chartered Accountants (ZiCA)

ZiCA is the sole professional accountancy organization in Zambia and membership is mandatory for individuals seeking to practice as Chartered Accountants. ZiCA is established under the Accountants Act of 2008.

Under the Act, ZiCA is responsible for: (i) setting accounting standards for application in Zambia; (ii) setting auditing standards; (iii) establishing initial and continuing professional development requirements and approving tertiary education providers offering the ZiCA professional qualification and diploma programs; (iv) setting ethical requirements; (v) conducting quality assurance reviews for practicing members; (vi) maintaining a registry of registered and practicing members; and (vii) establishing and operating an investigative and disciplinary system in the public interest.

ZiCA’s membership categories include Technician, Licentiate, Graduate, and Chartered Accountant (Associate and Fellow). ZiCA is the only organization authorized to confer the Chartered Accountant designation in Zambia.

In addition to being a Member of IFAC, ZiCA is also a member of the Pan African Federation of Accountants (PAFA) and Chartered Accountants Worldwide.

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing and operating a quality assurance (QA) review system for auditors. ZiCA established a Practice Review Department in 2009 and currently conducts QA reviews for all audit firms in Zambia using internal resources.

The QA system applies to all mandatory audits and incorporates the requirements of SMO 1. Firms are required to implement systems of quality management in line with the International Standards on Quality Management (ISQM 1 and ISQM 2), which have been adopted as part of ZiCA’s adoption of International Standards on Auditing (ISA). QA reviews are conducted on a cyclical basis and are linked to ZiCA’s investigative and disciplinary system where necessary. The QA review system is aligned with the requirements of SMO 1 and is subject to ongoing review to ensure continued compliance with international best practices.

Oversight of the QA system is exercised through the Standards and Regulatory Board, which reviews the functioning of the system and may refer matters to the Disciplinary Committee in cases of persistent non-compliance.

Current Status: Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants in Zambia.

ZiCA introduced the Chartered Accountant Zambia (CA Zambia) qualification in 2017, consisting of three exit qualifications: CA Certificate in Accountancy, CA Application Advanced Diploma in Accountancy, and CA Advisory Professional in Accountancy. The qualification is registered and accredited by the Zambia Qualifications Authority (ZAQA) and incorporates practical experience requirements of three years prior to admission as a Chartered Accountant.

ZiCA reports that the CA Zambia qualification has been reviewed to incorporate the 2019 revisions to IES 2, 3, 4, 6, and 8, and further revisions are scheduled for implementation following training of examiners and tutors. Individuals holding foreign qualifications must pass additional examinations assessing knowledge of local tax and business legislation prior to obtaining practicing certification.

ZiCA requires members to complete a minimum of 40 hours of continuing professional development annually and enforces compliance through its membership renewal process. Overall, ZiCA reports that its IPD and CPD framework is aligned with the requirements of the revised 2019 International Education Standards.

Current Status: Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is legally mandated to set auditing standards for application in Zambia. Since 2005, ZiCA has adopted International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) without modification and including effective dates. ISA are applicable to all mandatory audits in Zambia.

Current Status: Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing ethical requirements for professional accountants in Zambia. ZiCA has adopted the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants (IESBA) without modification and including effective dates. The Code applies to all professional accountants regulated by ZiCA.

Current Status: Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is mandated to adopt, promote, and enforce internationally comparable practice standards, including public sector accounting standards.

Cash-basis International Public Sector Accounting Standards (IPSAS) are currently applied in Zambia. Accrual-basis IPSAS have not yet been adopted in their entirety for application by all public sector entities.

Current Status: Partially Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is responsible for establishing and operating an investigative and disciplinary (I&D) system for professional accountants in Zambia.

ZiCA has established an independent Disciplinary Committee in accordance with the Act, with appeals permitted to the High Court of Zambia. The I&D system applies to all professional accountants regulated by ZiCA and incorporates the requirements of SMO 6.

Current Status: Adopted

Under the Accountants Act of 2008, the Zambia Institute of Chartered Accountants (ZiCA) is responsible for setting accounting standards in Zambia. Since 2005, ZiCA has adopted International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) without modification and including effective dates.

Public interest entities (PIEs), listed companies, and government-owned companies are required to apply full IFRS. Other entities may apply either full IFRS or the IFRS for Small- and Medium-sized Entities (SMEs), in accordance with ZiCA’s three-tier reporting framework.

Current Status: Adopted

Relevant Organizations

• Association of Chartered Certified Accountants (ACCA)
• Department for International Development–UK (DFID)
• Institute of Chartered Accountants in England and Wales (ICAEW)
• Zambia Institute of Chartered Accountants (ZiCA)

Relevant Legislation

• Accountants Act 2008
• Banking and Financial Services Act 1994
• Companies Act 2017
• Insurance Act 1994
• Lusaka Stock Exchange Listing Rules (LuSE)
• Securities Act 2016

Relevant Publications

• IFRS Foundation, “IFRS Application Around the World Jurisdictional Profile: Zambia,” June 16, 2016.
• PricewaterhouseCoopers, “Zambia’s Financial Reporting Framework,” 2011. Presentation.
• World Bank, Report on the Observance of Standards and Codes, Accounting and Auditing: Zambia, June 25, 2007.
• ZiCA, SMO Action Plan, August 2021.