The House of People’s Representatives has approved a draft proclamation for the establishment of the Ethiopian Institute of Certified Public Accountants, a crucial step towards addressing the acute shortage of certified accountants in the country. This move is seen as vital for implementing international financial reporting and audit standards, which have been hindered by the lack of qualified professionals.
Ethiopia currently has only 250 certified accountants, a stark contrast to neighboring countries like Kenya, which boasts 45,000, and Nigeria with 60,000. This shortage has resulted in reliance on foreign accountants, leading to significant foreign exchange outflows.
Desalegn Wodajo, Chairman of the Standing Committee on Planning, Budget, and Financial Affairs, emphasized that the institute will play a pivotal role in establishing a quality financial system, promoting economic development, and protecting national interests. The establishment of the institute is also crucial for the implementation of the African Continental Free Trade Area (AfCFTA), as it will help produce internationally recognized Ethiopian professionals, reducing the need for foreign expertise.
The main objective of the Financial Reporting and Presentation Proclamation No. 847/2006 is to establish a comprehensive and transparent financial reporting system. However, the lack of qualified experts has hindered its full implementation. International experiences show that professional associations can produce large numbers of qualified professionals, but in Ethiopia, such associations have made limited progress due to high costs and lengthy training periods.
To address this challenge, the government has been working to establish the Ethiopian Institute of Certified Accountants. The institute will consist of a general assembly, a governing council, and various committees to ensure the accounting profession safeguards public interest and promotes international standards.
The establishment of the Ethiopian Institute of Certified Public Accountants is a significant step towards addressing the critical shortage of certified accountants and enhancing Ethiopia’s financial infrastructure. This move is expected to support economic development and integration into global markets, particularly under the AfCFTA framework.
