The lack of a strong regulatory framework underpinned by robust professional accountancy organisations (PAOs) and oversight authorities is one of the most daunting challenges that emerging African economies are facing, strategic research by The Accountant has found.
The Accountant chaired recently a round table with the heads of four African regulatory bodies from South Africa, Zimbabwe, Botswana and Uganda -four countries that are making great strides in setting up an appropriate framework nationally and regionally within the continent.
One of the concerns raised by regulators is a perceived lack of technical capacity to ensure a proper arm’s-length relationship between watchdogs, oversight authorities, PAOs and market participants.
Admire Ndurunduru, executive secretary of the Public Accountants and Auditors Board of Zimbabwe, warned about the lobby of market participants such as accountancy firms against proposed legislation and the concept of "regulatory capture", a form of government failure to act in the public interest.
Duncan Majinda, CEO of Botswana Accountancy Oversight Authority, shared insights into how the body he leads has become a member of the International Forum of Independent Audit Regulators or IFIAR, one of the very few African bodies that have joined the forum.
Derick Nkajja, CEO of the Institute of Certified Public Accountants of Uganda, analysed the issue of funding regulatory bodies to ensure their independence.
And Bernard Agulhas, CEO of South Africa’s Independent Regulatory Board for Auditors (IRBA), also an IFIAR member and the most advanced regulator in the continent, shared IRBA’s bold measures to promote independence.
Among the recently appointed IRBA’s board there is no practising registered auditors.
"You only need one auditor on your board to be lobbied by the global networks, and everything we discuss gets out to the rest of the profession," Agulhas said.
The round table, held in Mauritius on the back of the Africa Congress of Accountants, provided an improvised forum for the exchange of views among regulators in Africa, which according to participants has been the first time they get together to share their concerns.
The Accountant’s regulatory round table is part of ongoing strategic research analysing the finance and accountancy industries of key African countries.