Sierra Leone

The Companies Act of 2009 outlines the requirements for the financial reporting of all companies incorporated in Sierra Leone, prescribing the preparation, presentation, and publication of all financial statements, including the disclosures they are to contain.

The Companies Act of 2009 requires the application of IFRS as adopted by the Institute of Chartered Accountants of Sierra Leone (ICASL). The ICASL has delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate and Institutional Governance (CSAAG), which operates under the aegis of the Sierra Leone Accountability Foundation (SLAF). The SLAF—which was established in 2009—was intended to be a multi-stakeholder, independent standard-setting and monitoring body for the accounting and auditing profession; however, as of 2019, the SLAF is not operational.

The CSAAG has nonetheless adopted the IFRS for public interest entities such as listed companies, banks and non-bank financial institutions, and insurance companies. The CSAAG also adopted IFRS for SMEs under CSAAG BPR2/2009, Board Paper Resolution 29, December 2009. All entities that are not required to use IFRS or the (national) public benefit entity standard (Composite Financial Reporting Standard for Public Private Not For Profit Entities (CS 1) which also aligns with IFRS for SMEs) are permitted to use the IFRS for SMEs. As new and revised IFRS are issued, the standards become effective in the country.

In 2014, amendments to the Companies Act stipulate that small companies are not required to have their financial statements audited. All other companies must have their annual financial statements audited. While the Companies Act also contains extensive provisions on auditors’ obligations and their appointment, it does not specify which auditing standards are to be applied for audits. De facto, the ICSAL is the body responsible for setting auditing standards and states that ISA as issued by the IAASB are effectively applied. Under the ICASL Act of 1988, only firms and individuals who have been licensed by the ICASL are authorized to conduct audits.

The Institute of Chartered Accountants of Sierra Leone (ICASL) is responsible for regulating professional accountants in accordance with the ICASL Act of 1988.

The ICASL Act of 1988 empowers the institute to: (i) establish initial and continuing professional development requirements for members; (ii) establish ethical requirements and financial reporting standards; (iii) establish a quality assurance mechanism and investigative and disciplinary procedures to monitor and enforce compliance with standards; (iv) issue practicing certificates, register auditors, and maintain said registry; and (v) promote the collective interest of its members. Further, as stated in the Public Financial Management Act 2016, the setting of public sector standards are to be done by the Accountant General in consultation with the ICASL.

All accounting professionals who wish to practice must be a member of ICASL. Only individuals who receive a practicing certificate and register with ICASL may conduct audits. In order to use the designation of Chartered Accountant, (ACA(SL)) as conferred by ICASL, candidates must complete a program of professional accountancy education, have three years of practical experience and receive a recommendation from the partner or firm where they completed their practical experience, and pass final examinations. According to a joint agreement with the ICASL, the Association of Chartered Certified Accountants (ACCA) is responsible for the delivery of the accountancy education program and administering the final examinations.

ICASL, in partnership with the Institute of Chartered Accountants of Nigeria (ICAN), is also offering an Accounting Technician (AT) qualification to graduates who have passed the Association of Accountancy Bodies of West Africa’s Accounting Technician Scheme, West Africa (ATSWA). Graduates of the ATSWA may proceed to the ICAN CA qualification or the ACCA’s CPA qualification. ATs may join ICASL membership as students.

Lastly, in addition to the requirements of the Companies Act, under the Banking Act 2000 and the Other Financial Services Act 2001, banks and non-bank financial institutions must receive approval by the Bank of Sierra Leone in regards to the appointment of auditors.

There is no independent audit oversight arrangement in Sierra Leone. Provision of auditing services is regulated by the Institute of Chartered Accountants of Sierra Leone (ICASL), under the ICASL Act of 1988. Chartered Accountants who, after registering with and receiving a practicing certificate from the institute, are the only individuals authorized to conduct audits in the jurisdiction. The ICASL Act authorizes the institute to (i) establish initial and continuing professional development requirements for professional accountants; (ii) establish ethical requirements; (iii) establish a quality assurance mechanism and investigative and disciplinary procedures to monitor and enforce compliance with standards; (iv) issue practicing certificates and register auditors; and (v) promote the collective interest of its members.

Lastly, in addition to the requirements of the Companies Act, under the Banking Act 2000 and the Other Financial Services Act 2001, banks and non-bank financial institutions must receive approval by the Bank of Sierra Leone in regards to the appointment of auditors.

Institute of Chartered Accountants of Sierra Leone (ICASL)

The ICASL was established under the ICASL Act of 1988 and its membership is comprised of Chartered Accountants who, after receiving a practicing certificate from the institute, are the only individuals authorized to conduct audits in the jurisdiction. The ICASL Act authorizes the institute to (i) establish initial and continuing professional development requirements for professional accountants; (ii) establish ethical requirements and financial reporting standards; (iii) establish a quality assurance mechanism and investigative and disciplinary procedures to monitor and enforce compliance with standards; (iv) issue practicing certificates and register auditors; and (v) promote the collective interest of its members.

In addition to being a member of IFAC, ICASL is a member of the Association of Accountancy Bodies in West Africa and the Pan African Federation of Accountants.

The ICASL reports that steps have been taken to improve the capacity of the institute through legislative means. After several years of preparation, in December 2017, the ICASL drafted and submitted to Parliament a new ICASL Act which is still pending approval as of the date of the assessment. The Act would address governance arrangements, mandate quality assurance reviews, designate ICASL as the legal accountancy standard-setter (rather than de facto) to adopt international standards, strengthen investigation and disciplinary procedures, and give ICASL exclusive control over the use of the term “accountant” to permit the development of the professional accountancy education system in accordance with IES.

In May 2019, the World Bank carried out its Report on Observance of Standards & Codes—Accounting and Auditing (ROSC A&A) assessment. The institute reports the ROSC assessment is being finalized.

Section 9 of the ICASL Act of 1988 authorizes the Institute of Chartered Accountants of Sierra Leone (ICASL) to establish mechanisms to ensure that its members maintain proper application of the standards. This is interpreted to mean that ICASL has direct responsibility for establishing a quality assurance (QA) review mechanism. ICASL has adopted ISQC 1 as the quality control standard and had previously planned to delegate the operations of the QA review system aligned with SMO 1 best practices to the Sierra Leone Accountability Foundation (SLAF). The SLAF, however, is not operational as of 2019 although there are plans to meet in March 2019 to reconstitute the foundation.

ICASL has gradually been making plans to progress with the implementation of a QA review system for its members since 2017 when firms agreed to undergo QA reviews in the public interest. In February 2019, ICASL made a formal agreement with a QA reviewer from Zambia to review files of six audit firms. The reviews are stated to being in December 2019; firms that do not participate will not have their practicing licenses renewed. ICASL states that the review procedures would meet the SMO 1 best practices.

Current Status: Partially Adopted

The ICASL Act of 1988 empowers the Institute of Chartered Accountants of Sierra Leone (ICASL) to establish initial and continuing professional development requirements (IPD and CPD, respectively) for its members.

In order to use the designation of Chartered Accountant, (ACA(SL)) as conferred by ICASL, candidates must complete a program of professional accountancy education, have three years of practical experience and receive a recommendation from the partner or firm where they completed their practical experience, and pass final examinations. According to a joint agreement with the ICASL, the Association of Chartered Certified Accountants (ACCA) is responsible for the delivery of the accountancy education program and administering the final examinations as the ICASL is developing its own qualification which would incorporate the IES requirements. As reported by the ACCA, its IPD programming aligns with the 2015 revised IES.

ICASL requires its members to adhere to CPD requirements which are 40 CPD credits per year in line with IES 7 (2015).

ICASL, in partnership with the Institute of Chartered Accountants of Nigeria (ICAN), is also offering an Accounting Technician (AT) qualification to graduates who have passed the Association of Accountancy Bodies of West Africa’s Accounting Technician Scheme, West Africa (ATSWA). Graduates of the ATSWA may proceed to the ICAN CA qualification or the ACCA’s CPA qualification. ICASL is working with tuition providers to teach to the ATWSA examination content. Presently, the ICASL does not have the resources to hold its own examination on Sierra Leone’s business and legal requirements to ensure that candidates who hold the diploma from ACCA or foreign institutes have knowledge of these areas. The ATSWA is intended to help mitigate this as it is more tailored to the regional context.

Current Status: Partially Adopted

In 2014, amendments to the Companies Act of 2009 stipulate that small companies are not required to have their financial statements audited. All other companies must have their annual financial statements audited.

While the Companies Act also contains extensive provisions on auditors’ obligations and their appointment, it does not specify which auditing standards are to be applied for audits. De facto, the ICASL is the body responsible for setting auditing standards and as auditors must be members of the institute to practice publicly, they must follow the institute’s regulations.

ICASL states that ISA as issued by the IAASB are to be applied and communicates all updates to its members when issued by the IAASB.

ICASL reports that a new draft of the ICASL Act is pending the Parliament’s approval which adopts ISA by reference. Once the draft law is approved, ICASL would be legally recognized as the audit standard-setting authority.

Current Status: Adopted

In accordance with the ICASL Act of 1988, the Institute of Chartered Accountants of Sierra Leone (ICASL) is responsible for setting ethical requirements. The ICASL has drafted a new Code of Ethics that is reportedly based on the IESBA Code of Ethics, although it is not clear what version of the IESBA Code the ICASL’s new requirements might reference.

Current Status: Partially Adopted

In accordance with the Public Financial Management Act 2016, financial statements are to be prepared in accordance with such internationally accepted accounting standards as specified by the Accountant General in consultation with the Institute of Chartered Accountants of Sierra Leone (ICASL). Further, the Act specifically states that the statements of the Consolidated Fund, which is composed of all government revenues, are to be prepared in accordance with IPSAS.

ICASL states that cash-basis IPSAS have been adopted and that the institute is proposing a framework for the transition to accrual-basis IPSAS (IFAC, CIPFA 2018). The ICASL report that there are challenges with the transition process such as dealing with fixed assets and evaluating natural assets and resources. There is also a lack of infrastructure capacity such as an Integrated Financial Management Systems (IFMIS) system. As of the date of the assessment, the timeline for transitioning to accrual-basis IPSAS remains to be specified.

Current Status: Partially Adopted

Under the ICASL Act of 1988, the Institute of Chartered Accountants of Sierra Leone (ICASL) is authorized to investigate and discipline professional accountants.

ICASL’s I&D procedures at the time of the assessment are outlined as follows: when an official complaint is brought to the Director or President it will be submitted to Council. ICASL’s Council reviews the complaint and forwards it to the investigation committee. The investigation committee will then determine whether it should proceed to a disciplinary hearing or not. The disciplinary committee may then hear the case and may issue certain sanctions. An appeals mechanism is available within the institute.

The ICASL reports that its system falls short of SMO 6 best practices such as non-accountants serving on the disciplinary committee; liaison with outside bodies; having definitions of misconduct; and certain administrative processes such as independent review of complaints. It has been planning to revise its I&D system to bring it in line with SMO 6 pending the approval of a new ICASL Act which is with Parliament for review and approval.

Current Status: Partially Adopted

The Companies Act of 2009 requires the application of IFRS as adopted by the Institute of Chartered Accountants of Sierra Leone (ICASL). The ICASL has delegated this responsibility to the Council for Standards of Accounting, Auditing, Corporate and Institutional Governance (CSAAG), which operates under the aegis of the Sierra Leone Accountability Foundation (SLAF). The SLAF—which was established in 2009—was intended to be a multi-stakeholder, independent standard-setting and monitoring body for the accounting and auditing profession. To date, however, the SLAF is not operational.

The CSAAG has nonetheless adopted IFRS for public interest entities such as, listed companies, banks and non-bank financial institutions, and insurance companies. The CSAAG also adopted IFRS for SMEs under CSAAG BPR2/2009, Board Paper Resolution 29, December 2009. All entities that are not required to use IFRS or the (national) public benefit entity standard (Composite Financial Reporting Standard for Public and Private Not For Profit Entities, CS1) are permitted to use the IFRS for SMEs.

As new and revised IFRS are issued, the standards become effective in the country.

Current Status: Adopted

Relevant Organizations

Council for Standards of Accounting, Auditing, Corporate & Institutional Governance (CSAAG)

Institute of Chartered Accountants of Sierra Leone (ICASL)

Relevant Legislation

Banking Act 2000

Companies Act, 2009

ICASL Act of 1988

Other Financial Services Act 2001

Public Financial Management Act, 2016

Relevant Publications

ICASL, SMO Action Plan, November 2019.

IFRS Foundation, IFRS Application Around the World—Jurisdictional Profile: Sierra Leone, 16 June 2016.

World Bank, Implementation Completion and Results Report (IDA41460-Trust Fund No.:TF57287,TF56158) on a Credit in the Amount of SDR 2.7 Million (US$ 4.0 Million Equivalent) Republic of Sierra Leone for an Integrated Public Financial Management Reform Project, January 2015.

World Bank, Implementation Status & Results Sierra Leone Strengthening of Accounting Profession in Sierra Leone (P128030), 2012–2014.

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