Zambia sees international accounting rules as key
LUSAKA - New international accounting rules are expected to play a critical role in the risk-based supervision of financial firms in Zambia, the head of the country's central bank said in mid-February.
Bank of Zambia governor Caleb Fundanga said the adoption of the new rules, known as International Financial Reporting Standards (IFRS), is expected to result in higher quality reporting of the health of financial institutions in Zambia.
The country will benefit from quality international research on accounting and finance issues, Fundanga told a workshop on IFRS in Lusaka organised by the central bank and the Zambia Institute of Chartered Accountants.
The country will also benefit from cross-border comparability of financial performance and conditions among banks and non-bank financial firms.
Fundanga said the Bank of Zambia has in the recent past streamlined the supervision of financial firms to make them more focused on risks. This is aimed at encouraging the firms to implement sound risk management practices that provide for active oversight by management and directors and clearly defined policies, procedures and delegation of authority. The streamlining also means comprehensive risk measurement and reporting systems, and the institution of adequate audits and controls.
Latest estimates indicate that 94 countries either require or permit the use of IFRS for publicly traded companies, according to a study by professional services firm Deloitt & Touche. IFRS were developed by the International Accounting Standards Board, the London-based accounting rule-maker.
