Botswana

The HYPERLINK "https://www.bica.org.bw/legislature"Companies Act 2007 and the Financial Reporting Act 2010 as amended govern the corporate financial reporting framework in Botswana. The Companies Act outlines the formation and operation of companies and stipulates the requirements for the preparation of their financial statements. It also establishes mandatory audit requirements for all companies except exempt private companies.

The Companies Act 2007 stipulates that a public company and non-exempt private companies are to use IFRS for the preparation of their financial reporting. Entities that do not have public accountability are permitted to use IFRS for SMEs.

The Financial Reporting Act 2010 established the Botswana Accountancy Oversight Authority (BAOA) with an objective to provide oversight to accounting and auditing services and promote the standard, quality and credibility of providing financial and non-financial information by entities, including public interest entities (PIEs). BAOA is mandated to issue, adopt, establish, monitor and enforce financial reporting, accounting and auditing standards in the Country. The Financial Reporting Act’s accompanying Regulations as amended define PIEs as:

• any entity that has issued equity or debt securities for public subscription, and which is listed in a stock exchange
• any bank, deposit taking institution, or other institution that is subject to supervision by the Bank of Botswana;
• any insurance company, pension and provident fund, collective investment undertaking, and any other institution that is subject to supervision by the Non-Bank Financial Institutions
• any entity to which any two of the following conditions are applicable:
• an annual revenue of P200 million;
• 150 employees;
• total assets of P150 million; or
• total liabilities of P50 million, not including shareholder’s equity.
• any partly or wholly funded public body

The Financial Reporting Act 2010 as amended empowers the BAOA to adopt, issue, and keep up-to-date auditing standards that are consistent with international best practice. The BAOA has adopted ISA as issued by the IAASB including effective date. The BAOA has also adopted all IFRS as issued by the IASB.

Professional accountants are subject to regulation by the Botswana Institute of Chartered Accountants (BICA) in accordance with the HYPERLINK "https://www.bica.org.bw/legislature"Accountants Act 2010 as amended. Certified auditors are licensed and regulated by the BAOA.

As noted, the BAOA is empowered with regulatory and oversight functions. In addition to overseeing BICA’s activities, the BAOA’s responsibilities are to: (i) license auditors and audit firms; (ii) maintain a register of Certified Auditors and Firms; (iii) oversee and monitor the performance and conduct of Certified Auditors through QA reviews; (iv) establish and maintain an investigation and disciplinary system for Certified Auditors; (v) issue, monitor, and enforce financial reporting, ethics, and auditing standards.

In accordance with the Accountants Act, 2010 as amended, BICA’s responsibilities are to: (i) establish, develop, and implement the Botswana Chartered Accountancy Qualification (BCAQ); (ii) establish and monitor compliance with initial professional development and continuing professional development requirements; (iii) oversee professional examinations; (iv) implement a quality assurance (QA) review system for Non-Audit Member Firms; (v) establish and publish a Code of Ethics in line with the IESBA’s Code of Ethics for Professional Accountants; (vi) investigate and discipline members for professional misconduct; and (vii) maintain registers of members and member firms.

In order to enter the BCAQ program, candidates must (i) possess a university degree recognized by the BICA as equivalent to a degree from the University of Botswana; or (ii) be a student at the Association of Chartered Certified Accountants (ACCA) who at least passed ACCA Part 1; or (iii) be a student at the Chartered Institute of Management Accountants (CIMA) who completed at least the CIMA Certificate in Business Accounting; or (iv) be a member of ACCA, CIMA, or any other IFAC recognized professional accountancy body. Students must then complete professional examinations, practical experience of 450 days with an authorized training employer, and a structured training program in ethics in order to qualify as Chartered Accountants and apply for BICA membership to use the designation of Chartered Accountant.

In accordance with the Financial Reporting Act 2010 as amended, the Botswana Accountancy Oversight Authority (BAOA) is the independent audit oversight entity in Botswana. The BAOA is a member of the International Forum of Independent Audit Regulators. BAOA’s oversight and regulatory responsibilities are outlined in the Regulation section.

Botswana Institute of Chartered Accountants (BICA)

BICA was established in 1990 as the body responsible for regulating the accountancy profession, now under the oversight of the Botswana Accountant Oversight Authority. The BICA is a mandatory membership organization comprising accountants and accounting firms. The Institute’s responsibilities are to: (i) establish, develop, and implement the Botswana Chartered Accountancy Qualification; (ii) establish and monitor compliance with initial professional development and continuing professional development requirements; (iii) oversee professional examinations; (iv) implement a quality assurance review system for Non-Audit Member Firms (v) establish and publish of a Code of Ethics in line with the IESBA’s Code of Ethics for Professional Accountants; (vi) investigate and discipline members for professional misconduct; and (vii) maintain registers of members and member firms.

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

• The Accountants (Amendment) Act 2020 and the Financial Reporting (Amendment) Act, 2020 have been revised and enacted effective 01 April 2023. The new laws have among others, required transfer registration and regulation of certified auditors from BICA to BAOA .
• As a member of the BAOA Standard Setting Committee and following the launch of the ISSB, BICA is encouraging the revision of legislation for mandatory application of the standards and preparing members for adoption.

The Accountants Act 2010 as amended and the Financial Reporting Act 2010 as amended require the establishment of mandatory quality assurance (QA) review systems for all non-audits and audits in Botswana respectively.

With the passage of the Financial Reporting Act 2010, the Botswana Accountancy Oversight Authority (BAOA) was established and authorized to conduct QA reviews the audits of public interest entities (PIEs). Subsequently in April 2022, the Accountants (Amendment) Act, 2020 and the Financial Reporting (Amendment) Act, 2020 became effective and transferred the responsibility of QA reviews of non-PIE auditors from BICA to the BAOA as well. BICA indicates that the BAOA’s procedures meet the SMO 1 benchmark and that relevant standards (now ISQM 1, 2, and ISA 220 (revised)) are applicable.

BICA will carry out inspections of non-audit firms using SMO 1 as best practice.

Current Status: Adopted

The Accountants Act, 2010 as amended outlines some general entry and educational requirements and states that the Botswana Institute of Chartered Accountants (BICA) may set more specific initial and continuing professional development (IPD and CPD respectively) for professional accountants. In accordance with the Financial Reporting Act 2010 as amended, the Botswana Accountancy Oversight Authority (BAOA) oversees the training, professional development programs, and examinations carried out by BICA.

BICA has established and implemented the Botswana Chartered Accountancy Qualification (BCAQ) which utilizes the Institute of Chartered Accountants in England and Wales’s (ICAEW) materials except for a module on Botswana’s tax and business law. The ICAEW’s educational programming aligns with the latest IES. After passing examinations, individuals must complete three years of practical experience with an Authorized Training Employer and demonstrate that they have learned necessary competencies.

BICA has also established CPD requirements of 40 hours per year to align with the latest IES.

Beginning in 2018, all professional qualifications were to be registered on the National Credit and Qualifications Framework (NCQF) implemented by the Botswana Qualifications Authority (BQA). BICA has been accredited as an Education Training Provider for short term courses by the BQA under the Consultancy classification. At the moment the Institute has twenty (20) approved short term learning programmes under the Human Resource Development Council (HRDC).

BICA indicates that it works closely with tertiary institutions and other providers to ensure alignment and preparation for the Botswana Chartered Accountancy Qualification and the IES.

Current Status: Adopted

The Financial Reporting Act 2010 as amended empowers the Botswana Accountancy Oversight Authority to adopt, issue, and keep up-to-date auditing standards that are consistent with international best practice. The BAOA has adopted ISA as issued by the IAASB including effective date.

Current Status: Adopted

The Accountants Act 2010 as amended requires the Botswana Institute of Charted Accountants (BICA) to establish a Code of Ethics for professional accountants that is aligned with the IESBA Code of Ethics. The institute reports that the latest IESBA Code of Ethics for Professional Accountants and other pronouncements as issued by the IESBA have been fully adopted.

BICA’s activities are subject to the oversight of the Botswana Accountancy Oversight Authority (BAOA) in accordance with the Financial Reporting Act 2010 as amended. The Act states that the BAOA may adopt and issue ethics standards. The BAOA adopted the Code of Ethics as issued by the IESBA.

Current Status: Adopted

The Botswana Government through Public Financial Management Act determines the accounting basis to be adopted by the public sector. The Financial Reporting Act 2010 as amended provides for the adoption of IPSAS and empowers the Botswana Accountancy Oversight Authority (BAOA) to enforce compliance with the standards. The Botswana Institute of Chartered Accountants (BICA) states that the government has initiated a project to transition from cash accounting to accrual accounting.

Current Status: Partially Adopted

Per the Accountants Act 2010 as amended, BICA is charged with investigating and disciplining its members for professional misconduct, as well as for violations or breaches of its codes, rules, and standards.

BICA indicates that since the passage of the Accountants Act 2010 as amended it has repeatedly taken steps to strengthen its I&D mechanisms to meet SMO 6 requirements. These include changing the composition of the Disciplinary Committee (i.e., removing the dominance of Council and introducing an independent chairperson with a legal background) and establishing an Independent Accounting Appeals Committee (appointed by the Minister of Finance with an independent secretary).

I&D related to certified auditors is performed by BAOA under the Financial Reporting Act.

Current Status: Adopted

The Companies Act 2007 stipulates that a public company and non-exempt private companies are to use IFRS for the preparation of their financial reporting. Entities with no public accountability are permitted to use IFRS for SMEs.

Subsequently, the Financial Reporting Act 2010 as amended established the Botswana Accountancy Oversight Authority (BAOA) with the authority to adopt, issue, and keep up-to-date financial reporting standards for public interest entities (PIEs), and ensure that they are consistent with the IFRS and interpretations issued by the International Accounting Standards Board. The Financial Reporting Act’s accompanying Regulations issued define PIEs as :

• any entity that has issued equity or debt securities for public subscription, and which is listed in a stock exchange
• any bank, deposit taking institution, or other institution that is subject to supervision by the Bank of Botswana;
• any insurance company, pension and provident fund, collective investment undertaking, and any other institution that is subject to supervision by the Non-Bank Financial Institutions
• any entity to which any two of the following conditions are applicable:
• an annual revenue of P200 million;
• 150 employees;
• total assets of P150 million; or
• total liabilities of P50 million, not including shareholder’s equity.
• any partly or wholly funded public body

Current Status: Adopted

Relevant Organizations

Botswana Accountancy Oversight Authority (BAOA)

Botswana Institute of Chartered Accountants (BICA)

Botswana Qualifications Authority (BQA)

Relevant Legislation

Accountants Act, 2010

BICA Rules 2014 related to the Accountants Act 2010

Companies Act, 2003

Financial Reporting Act, 2010

Financial Reporting (Public Interest Entities) Regulations, 2016

Relevant Publications

BAOA, Summary of Standards Issued/Adopted by the Board of the Botswana Accountancy Oversight Authority during 1 January 2014 to 31 December 2016.

BICA, SMO Action Plan, 2023.

BQA, List of TVET Registered and Accredited ETPS and Programmes, August 2018.

International Forum of Independent Audit Regulators, Member Profile—BAOA.

IFRS Foundation, IFRS Application Around the World—Jurisdictional Profile: Botswana, 8 Feb 2017.

World Bank, Report on the Observance of Standards and Codes—Accounting and Auditing: Botswana, 2006.