Inside BAOA hold a Media brief BAOA Reviews its Strategic Plan Registration update, reflecting on compliance Corporate Governance Model for Botswana Vision Enhanced International confidence in Financial Reporting, Audit, and Corporate Governance through exceptional technical skills and expertise. Mission To protect public interest in Botswana through oversight and regulation by developing, promoting and implementing credible financial reporting. The oversight NEWSLETTER ISSUE 2 DECEMBER 2018
Transcript
Inside BAOA hold a Media briefBAOA Reviews its Strategic PlanRegistration update, reflecting on complianceCorporate Governance Model for Botswana
Vision
Enhanced International confidence in Financial Reporting, Audit, and Corporate Governance through exceptional technical skills and expertise.
Mission
To protect public interest in Botswana through oversight and regulation by developing, promoting and implementing credible financial reporting.
The oversight
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ISSUE 2 DECEMBER 2018
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The second issue of ‘The Oversight’, a Newsletter which communicates useful information on the regulation of Public Interest Entities (PIEs) and corporate sector at large brings you yet another important coverage of issues of importance.
We continue to hear and see more disturbing news of failures in corporate governance by PIEs with one listed entity currently suspended from the Botswana Stock Exchange. Our reviews have also revealed widespread non-compliance with International Financial Reporting Standards (IFRS) and also non-compliance with good practice in corporate governance. BAOA has also cautioned some PIE auditors for poor audit quality. More disturbing is the revelation that auditors of non-PIEs fail the BAOA audit practice reviews in large numbers. BAOA has also talked with the leadership of the Botswana Institute of Chartered Accountants to up their game in monitoring their members as the high incidents of non-compliance with IFRS are a result of the poor performance of their members. As the profession, we must together put our house in order by promoting high standards of financial reporting and auditing to enhance accountability and transparency.
This might sound like a harsh attack on the profession but in order to come up with appropriate interventions, we have to be candid about our weaknesses as the profession. This Issue of ‘The Oversight’ contains reports and statistics about the performance of PIEs in financial reporting and corporate governance. The Issue also highlights the high-risk areas like cyber security.
As our stakeholders, we have also included for your information the results of the mid-term review of the BAOA Strategy implementation with a focus on revised strategic initiatives and time lines for implementation.
Finally, I would like to thank our stakeholders for their continued support and cooperation, in particular, the Government through the Ministry of Finance and Economic Development for its financial support as it currently provides more than seventy-six (76) percent of the Authority’s total funding.
CEO’s Desk
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Welcome to the 2018 Oversight Newsletter. This is the second Issue of the Newsletter and we are excited to assure stakeholders and the public that more exciting and informative features in this publication on both financial and non-financial matters are coming.
While the first issue was an introduction of the Authority, this publication has now expanded its scope with more exciting news and information from the core business of the Authority, namely; Audit Practice, Financial Reporting Monitoring and Corporate Governance Reviews. As the organisation exists to protect the public interest, features in this publication cover News for investors, auditors, regulators, audit firms as well as the public at large. Dave Ramsey once said, “I believe that through knowledge and discipline, financial peace is freedom”.
To recap on the very fruitful and productive 2018, the Authority began its year with a successful Media Briefing where the press was presented with the Authority’s mandate; Memoranda of understanding with Companies and Intellectual Property Authority (CIPA) and Public Enterprises Evaluation and Privatisation Agency (PEEPA) were signed to establish official partnerships on shared and overlapping mandates; the Authority held a mid-term strategy review for the Strategy 2016 to 2020; the Authority participated in the 2018 Botswana Consumer Fair and the BOT 50+2 events to increase awareness and sensitise its stakeholders on its services and
Editor’s Noteexpectations; the Authority also conducted an awareness meeting with Botswana Medicines Regulatory Authority (BOMRA) towards the end of the year to also sensitise them on the Authority’s mandate as stipulated in the Financial Reporting Act, 2010.
The BAOA Management attended the 15th Biennial National Business Conference from 09th to 11th September 2018, in Francistown to discuss reforms to make Botswana internationally competitive under the theme “Breakthrough to a High-Income Botswana: - the Role of the Private Sector in Charting the Path”. From an international perspective, the Board chairperson and the CEO attended the International Forum of Independent Audit Regulators’ (IFIAR) Plenary Session in Ottawa, Canada during the year. International exposure, global networking and active participation in such international forums is vital as the Authority intensifies and tackles its regulatory role guided by international best practice fundamentals in corporate governance, financial reporting and auditing.
In order to continue to reach out to the stakeholders, the Authority intensified its awareness campaigns. The leading indicator of the good relationship with our stakeholders is shown by the response of Public Interest Entities (PIEs) who registered with the Authority in large numbers in accordance with the Act. The success of the Authority depends on acceptance of its mandate by stakeholders. The Authority will continue to strive to protect public interest and enhance investor protection by improving the quality of audits and financial reporting. Early in the new year, the Authority will also conduct a customer satisfaction survey to gauge its effectiveness and how it is perceived by its stakeholders and use the outcome to inform future policy direction.
In conclusion, I would like to extend my gratitude to the Management and Staff of BAOA in making this publication possible. Not forgetting our stakeholders for their invaluable contribution, support and carrying us through the achievements made by the Authority within such a short time since its inception.
Visit our website www.baoa.org.bw for more news and updates.
Wishing you all a blessed and prosperous 2019.
Ndulamo NtopoPublic Relations Officer
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What is a Strategy? In his book, Strategy and Structure: Chapters in the History of the American Industry Enterprise, Alfred D. Chandler, Jr defines strategy as, “the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”.
On the 22nd June 2018 Botswana Accountancy Oversight Authority conducted a Workshop to review progress in the implementation of its Strategic Plan 2016-2020 at Manong Game Lodge. The Workshop which was facilitated by Innolead Consulting was attended by Management and members of the BAOA Board.
The elements that constitute Strategy are dynamic as they respond to changes in the operating enviroment. It is for this reason that a mid-term Strategy review was considered necessary.
The Primary objectives of the mid-term review was to:
► determine whether the Authority’s vision and mission were still relevant;
BAOA REVIEWS ITS STRATEGIC PLAN ► review the continued relevance of the Authority’s
strategic initiatives;
► conduct a review of the current strengths, weaknesses, opportunities and threats and respond by taking appropriate interventions; and
► ensure that the appropriate infrastructure was put in place to produce the desired results.
At the conclusion of the review of the Strategic Plan, it was agreed that Management would cascade the Revised Strategy to all the functional and support units in the Organisation through the development of aligned individual scorecards to ensure that all units and employees understood how they contribute to the successful implementation of the overall strategy.
The Strategy will impact all parts of the Authority including its business and operating model as well as the underlying processes, systems, organisational structure and people. The Authority will make deliberate efforts to ensure that these are continuously re-aligned to the Strategy through monitoring plans.
The Strategy Map and Scorecard Dashboard below summarise the assessed performance for the first two and a half years of the strategy period as per the approved indicators.
KeyBelow target (<60%) Over achieved (100%) Slighty below target (61 - 84%) Not measuredAchieved (85 - 100%)
EVISED STRATEGY OBJECTIVESEnhanced International
ConfidenceOutcome Perspective
Customer &StakeholderPercective
ProcessPerspective
Human Capital Perspective Financial Resources
Increase StakeholderSatisfaction
Talent Management Improve Employee Engagement
Improve Performance
BAOA Funding Prudent Financial Management
ImproveCommunication
Increase Awareness
Improve Operational Excellence
Leverage IT(% Implementation of IT Strategy to Plan)
Improve Enhancementand Monitoring
Improve Risk Management
Improve compliance
Leverage Strategic Partnerships
(# of Corporate failures)(Performance audit)
(SSI)
(% Compliance to Training Plan),(Vacancy Rate),(Turnover rate) (Engagement Index) (% Employment Performance) (% Budget Request Granted) (% Budget Compliace)
During the strategy review session, a Strategy Projects Portfolio and new Strategy Initiatives Timeline were established.
REVISED STRATEGY OBJECTIVESAt the time of the review, the BAOA strategy implementation was achieved to a level of just over fifty (50) percent. The following areas were yet to be addressed during the 2nd half of the strategy period. This was summarised according to the Customer and Stakeholder, internal processes, learning and growth, and Financial perspectives.
Customer and Stakeholder Perspective
► Establish partnerships (HRDC; BQA and PEEPA); and
► Roll out the Customer Satisfaction Survey.
Internal Processes Perspective► Develop an Annual Monitoring Plan including
survey tools etc. (Monitoring for implementation of the Strategy);
► Improve and map Internal Business Processes where appropriate;
► Review and implement the IT Strategy;► Optimise new services in operation, and
Improve Services already in operation, namely;
Corporate Governance and Financial Reporting Monitoring;
► Develop Inter-Departmental Service Standards;► Implement integrated reporting; and► Roll out engagement survey.
Learning and Growth PerspectiveDescribes our emphasis on people as the foundation for achieving the Strategy. The theme emphasises the importance the Authority places on attracting, developing, managing performance and retaining the right talent. Without employees with the right competencies and skills and the right supportive environment, it will not be possible to drive the operational processes that deliver customer and financial outcomes.
► Develop strategy aligned Training Plans; and► Develop a Talent Management strategy
including succession planning.
Financial PerspectiveThis perspective ensures that BAOA is financially resourced to execute on the Strategy and conducts the necessary cost benefit analysis. The remaining Portfolios for the implementation of the Strategy will include:
► Review the Authority’s Revenue Structure; and► Preparation of the Authority’s Funding Plan.
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The Botswana Accountancy Oversight Authority held a Media briefing on the 27th February 2018 to create an awareness on the existence of the Authority, its mandate and services; as well as to interact with the media fraternity as one of its key stakeholders. This follows a series of similar meetings and presentations previously with other stakeholders across the country covering Gaborone, Francistown, Sowa, Mahalapye, Lobatse, Maun, Kanye, Jwaneng, Tsabong, Ghanzi, Molepolole, Good-Hope, Selebi-Phikwe and Kasane. Giving an overview to members of the Press on how the Authority came about, the Chief Executive Officer of BAOA, Mr Duncan Majinda, highlighted that the Authority was established institutionally, in response to providing for Botswana, a cushion against the corporate scandals experienced in the United States of America. Mr Majinda shared some research findings citing that some of the scandals within the accountancy profession emanated from inadequate oversight over accountants and auditors.
There were other corporate lapses including lack of auditor independence, weak corporate governance procedures, conflict of interest, inadequate disclosure; and poor accountability and transparency in Corporate Financial Reporting. He emphasized that by virtue of the interconnectedness of world economies, including that of America, when the American economy is affected by any unbalanced force, a ripple effect is created which has implications on the global economy; hence Botswana could not be an exception. As a result of this observation Botswana was then motivated as a matter of proactiveness to establish an independent body of this stature to regulate the accounting and auditing profession.
The CEO reported that Botswana was one of only four regulators in Africa to satisfy the requirements for membership of the global body of independent audit regulators, the International Forum of Independent Audit Regulators (IFIAR). The other three countries that qualified are Egypt, Mauritius and South Africa.
Mr Majinda also pointed out that BAOA oversees:
a) Professional Accountancy Organisations (PAOs) such as BICA, ACCA, and CIMA;
b) Financial Reporting Monitoring of Public Interest Entities (PIEs) as defined in the Act, and the Financial Reporting (Public Interest Entities) Regulations, 2016 (the Regulations);
c) Corporate Governance of PIEs.
The above mentioned entities are classified as PIEs as explained by the Act below. The Authority obtains its statutory powers from the Act and the Regulations, which defines a Public Interest Entity (PIE) as:
1. Any entity that is listed in the Botswana Stock Exchange;
2. Any entity that is supervised by the Bank of Botswana;
3. Any entity that is supervised by the Non-Bank Financial Institutions Regulatory Authority;
4. Any entity which, at the end of the preceding accounting year, exceeded at least two of the following thresholds:a) An annual revenue of P300 million;b) 200 employees;c) Total assets of P200 million; or d) Total liabilities of P100 million not including
shareholders’ equity; and5. Any entity required under any enactment
to file financial statements and reports with a Government department or authority, in accordance with Section 56 (1) of the Financial Reporting Act, 2010.
The above entities are regulated to protect public interest by ensuring that they comply with international standards, applicable legislation as well as best local and international practice in Corporate Governance. The Authority has adopted a three-year review cycle by way of monitoring compliance. Mr. Majinda also made reference to the 2018 Budget Speech where upon delivering the Budget Speech, the Minister of Finance and Economic Development Honourable Kenneth Matambo also highlighted the massive role and expected responsibility of the BAOA’s mandate in the area of performance monitoring of State-Owned Enterprises (SOEs) to eliminate corporate failures.
The Minister said, “the continued loss making by some state-owned enterprises is a major concern to Government. In an effort to address this, Government established institutions such as Public Enterprise Evaluation and Privatisation Agency (PEEPA) and Botswana Accountancy Oversight Authority (BAOA). These institutions are expected to monitor the financial performance and governance of SOEs in meeting their objectives and targets, using information obtained from the audited financial statements and annual reports of such enterprises”.
BAOA MEETS WITH THE MEDIA
By Ndulamo Ntopo
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“Going forward, Government will work closely with PEEPA and BAOA to strengthen the performance monitoring mechanisms for State-Owned Enterprises to ensure that they deliver on their mandates, and that the country derives value-for-money from their existence”, said Honourable Minister Matambo.
Subsequent to sharing the Honourable Minister’s sentiments, Majinda pointed out that corporate failures cannot be totally eliminated but appreciated that the comprehensive regulatory approach adopted by the Authority will identify entities that are under financial stress and have weak corporate governance practices early enough, so that corrective measures could be implemented whilst there’s still time to intervene.
Closing the event, the Chairperson of the BAOA Board, Mr Michael Lesolle said that the Authority was one of several other entities and regulators established by the Government of Botswana to consolidate our country’s democratic institutions and to give them meaning. In this regard, doing business with Botswana requires transparency, strong institutions, the rule of law, governance, ethical behaviour
BAOA CEO-Duncan Majinda giving a presentation during the Media briefing.
BAOA CEO-Duncan Majinda and Board Chairperson- Michael Lesolle giving closing remarks at the event.
Some of the Journalists, among them, John Churu from OVYTV (2nd right) posing a question during the Media briefing.
Attendants listening to the deliberations at the Media briefing.
Deputy Permanent Secretary-Ministry of Finance and Economic Development, Jacob Momene (left) and Deputy Accountant General (Accounts & General Leger)-Mmopa Juma paying attention during the presentation.
among others. The oversight executed collectively by regulators within the economic system, gives an assurance to existing and potential investors, and the required level of confidence in the system. As such, he continued, “it is not a coincidence that Botswana commands the distinct respect internationally”.
He added that “this was evidenced by the prestigious profile of ratings of good governance measured among the league of nations, particularly, among its peers on the African continent and beyond. He emphasized that, the Authority, in discharging its mandate, does so not only to protect the communities we serve against the effects of possible corrupt practices, but also to instil in the same communities, the trust that regulators do what they have to do in the public interest. The Authority has earned their trust”.
He concluded by stating that if the curricula at all levels do not cover governance and ethics, they ought to, particularly that both constitute the intrinsic national asset which must be nurtured from one generation to the next.
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The Botswana Accountancy Oversight Authority (BAOA) is an independent oversight body whose principal objective is to provide oversight to the accounting and auditing profession and promote the standard, quality and credibility of the financial statements of Public Interest Entities (PIEs) and the corporate sector. PIE is defined in the Financial Reporting Act 2010, (the Act) and the Financial Reporting (Public Interest Entities) 2016 (the Regulations), as:
(a) any entity that has issued equity or debt securities for public subscription, and which is listed in the stock exchange;
(b) any bank, deposit taking institution or other similar institution that is subject to supervision by Bank of Botswana;
(c) any insurance company, pension and provident fund, collective investment undertaking and any other similar institution that is subject to supervision by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA);
(d) any entity which, at the end of the preceding accounting year, exceeded at least two of the following thresholds:
(i) an annual revenue of P300 million;
(ii) 200 employees;(iii) assets of P200 million; or (iv) liabilities of P100 million not
including shareholders equity.
In addition, Section 56 (1) of the Act states that, where a public interest entity or other entity is required under any enactment to file financial statements or reports with a Government department or authority, the Authority or any officer of the Authority may review the financial statements and reports of the public interest entity filed with a Government department or authority to determine whether the financial statements and reports are in compliance with this Act. Entities affected by Section 56 (1) are also PIEs and are therefore required under Regulation 4 (1) (b) of the Regulations to be registered with the Authority. This excludes financial statements and reports filed with the Botswana Unified Revenue Services (BURS).
Good Corporate Governance and compliance with the Law are linked and often correlated. Compliance with applicable laws should be understood not only in terms of the obligations that they create, but also for the rights and protection that they afford. For the past decade, Botswana’s regulatory framework has evolved extensively resulting in increased regulation and the establishment of more aggressive authorities
all across the different sectors. As responsible corporate citizens, it is essential that entities ensure compliance with the continuously expanding regulatory requirements applicable to business. The consequences of non-compliance include reputational loss, fines and even imprisonment. As per the latin maxim provides that Ignorantia juris non excusat (meaning ignorance of the Law is not an excuse), eligible entities are required to comply or suffer the consequences as per the heavy penalties provided in the Act.
The Table below summarises the total number of stakeholders registered with the Authority as at the 31st December 2018:
CATEGORY OF ENTITY NUMBER
Entities listed on the Botswana Stock Exchange
28
Entities supervised by Bank of Botswana
27
Entities supervised by Non-Bank Financial Institutions Regulatory Authority
129
Significant Entities 49State Owned Entities 56Audit Firms of PIE 10Certified Auditors of PIE 28TOTAL 327
Registration Update, Reflecting on Compliance
By Thapelo Otukile
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RECOMMENDED BEST PRACTICE CORPORATE GOVERNANCE MODEL FOR
BOTSWANA
1. INTRODUCTION
1.1 The Botswana Accountancy Oversight Authority (BAOA) was established by the Financial Reporting Act, 2010 as the independent oversight body of the accounting and auditing profession; to regulate the reporting of financial matters of Public Interest Entities (PIEs) and the corporate sector.
1.2 Section 5(g) of the Financial Reporting Act, 2010 sets out one of the principal objectives of the Authority as “to promote high standards of corporate governance and compliance with professional ethics. However, the Act does not provide any further guidance as to what “corporate governance” entails, and how the BAOA should proceed in fulfilling its mandate in that regard.
2. PROCESS FOLLOWED IN ARRIVING AT
RECOMMENDED BEST PRACTICE CORPORATE GOVERNANCE MODEL FOR BOTSWANA
2.1 In 2016 BAOA carried out a research to
determine the most appropriate corporate governance model for Botswana by examining, among others, various sources of corporate governance practices currently in use in Botswana; each underpinned by one of the following Corporate Governance Principles: a) “apply or explain’ basis, as explained in
King III; b) "Comply or explain” basis, such as in the
UK Corporate Governance Code; and c) “Comply or else” basis, such as in the
Sarbanes Oxley Act, 2002.
2.2 Having carried out the research, BAOA arrived at the conclusion that King III would be the most suitable and appropriate Code for Botswana, for the following reasons:
a) the flexibility and all-encompassing nature
of its application arising from the “apply or explain” principle, which enables the board of an entity to apply a recommendation of King III differently or apply another practice and still achieve the objective of the overarching corporate governance
principles of fairness, accountability, responsibility and transparency;
b) many entities listed on the Botswana Stock
Exchange have adopted the King III Code of Corporate Governance;
c) PEEPA Guidelines to improve shareholder
oversight (corporate governance) over parastatals are practically all accommodated in the King III;
d) practically all the principles in the Botswana
Code of Corporate Governance, also based on the “apply or explain” basis, are embodied in King III;
e) foreign subsidiaries of local companies are
required to apply the Code to the extent prescribed by the holding company and subject to entity-specific foreign legislation;
f) King III clearly differentiates corporate
governance principles that must, should, or may, be complied with.
g) A benchmarking exercise of King III against two other principles-based corporate governance systems; the Botswana Code and the UK Code revealed that King III is much more encompassing.
2.3 A Corporate Governance Procedures Manual based on King III was therefore compiled, and was approved by the BAOA Board for the internal use of BAOA, and is intended to provide guidance regarding:
a) the corporate governance standards and
codes that PIEs regulated by the Authority are expected to use; and
b) review programs which the Authority is
expected to use to ensure conformance to the recommended corporate governance standards and codes by PIEs; or one that achieves similarly high standards of corporate governance that include practically all the recommended best practice corporate governance elements and principles, and as required by applicable laws, rules and codes.
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c) Adoption and application, of the Code of PIEs, of the above-mentioned recommended corporate governance code as may be appropriate; or one that achieves similarly high standards of corporate governance that include practically all the recommended best practice corporate governance elements and principles, and as required by applicable laws, rules and codes.
3. INITIAL FINDINGS FROM CORPORATE GOVERNANCE REVIEWS CARRIED OUT BY THE AUTHORITY
The reviews that have been carried out so far covered 10 (ten) entities including a bank, listed companies, non-bank financial institutions, such as insurance companies, and State-owned Enterprises (Parastatals).
In terms of findings made by the Authority during the reviews, listed companies and banks appear to be better managed than their public sector counterparts.
Listed companies have strong boards constituted along the lines of King III, with the necessary balance of skills and expertise and also the balance in terms of executive and non-executive directorships. They also have strong board committees, including nominations, remuneration, risk committees in addition to the conventional committees like finance, audit, and human resources. Generally, the staff and board members are well remunerated.
Parastatals generally appear to be lagging behind with poorly constituted boards dominated by ex-officio members appointed by the shareholder, which is Government. Any semblance of balance in skills and expertise is by coincidence and not through a deliberate action by the appointing officers. Naturally, therefore, board committees are weak and, more often than not, do not include committees like remuneration, nominations and risk. The responsibility of risk is normally assumed by the finance and audit committee. Comparatively speaking, the remuneration of staff and board members is also lagging behind and does not meet the guidelines of King III.
The summary of results below shows that the overall average number of findings per company were thirteen (13) findings per company for all the companies reviewed during the year. If we split the average findings per category, parastatals recorded the highest average per company with an average of 18 findings per company, while listed companies recorded an average of 9 findings per company. The only bank reviewed recorded the lowest average findings of 6.
One surprising revelation was that virtually all the entities reviewed did not have well constituted and compliant internal audit departments as they did not undertake a quality assurance and improvement program review (QAIP) which gives them the right to claim compliance with internal audit practice standards. Very few companies in Botswana have undertaken a QAIP. Infact we are informed that only Debswana and Bank of Botswana are amongst the few that have undertaken a QAIP review in Botswana. This is a serious issue that we have drawn to the attention of the Institute of Internal Auditors (Botswana) for them to address with their members as a matter of urgency as this also brings into question their legitimacy and that of their members.
4. REVIEW FINDINGS
4.1 The review findings on corporate governance were as summarised below:
Corporate GovernanceNumber of
entities Findings Percentage
of Total
Banks 1 6 5%Listed Companies
4 34 26%
Parastatals 5 88 69%
TOTAL 10 128 100NB: For comparative purposes, please note the number of entities reviewed
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Summary of findings grouped into appropriate themes
Theme Findings Regulated by BO
B
Regulated by BSE
Regulated by SO
E
Total number
of findings
Compliance Code disclosure
No statement of compliance with a corporate governance code such as King III or similar code
1 2 4 7
Board Composition and succession
• Membership of the Board not according to best practice, example: no executive directors and inadequate mix of independent non-executive director and non-executive
• No succession plan for the Board Chairperson or other key roles in the entity
2 10 12
Board Annual Report disclosures
Inadequate/non-disclosure in the Annual Report of Board members information:• Qualifications and experience• Induction, training and development • Board & its Committee meeting attendance register • Independence assessment of the Non-Executive
Directors
2 6 20 28
Board appointment & removal process
• Inadequate policies for appointment and removal of Directors
• Absence of Board Nomination Committee
3 16 19
Board secretary
• Absence of official Board secretary • Executive director acting as Board secretary
2 2
Board Evaluation
Evaluation of the Board, its committees and individual directors not performed.
3 5 8
Directors’ remuneration approval and disclosures
• No shareholder approval of Directors remuneration policy;
• Inadequate Annual Report disclosures of remuneration of directors
1 5 5 11
Effectiveness of Internal audit
• No effective risk based internal audit review
• Internal audit function not subjected to a Quality Assurance and Improvement Programme (QAIP) review
• Internal audit function not reporting functionally to the Board Audit Committee
2 8 15 25
Timely reporting
The Annual Report not prepared timely 2 2
Shareholder compact
There was no shareholder compact 1 1
Effectiveness of the Audit Committee and Risk Assessment
• Not all members of the Audit Committee were Independent Non-Executive Directors
• Audit Committee chairperson not independent
5 8 13
Total findings 6 34 88 128Key:BOB: Bank of BotswanaBSE: Botswana Stock ExchangeSOE: State Owned Entities / Parastatals
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4.2 Coupled with the corporate governance reviews, the Authority also carried out financial reporting monitoring of PIEs, which looked at, amongst other things, financial performance, compliance with International Financial Reporting Standards, liquidity and gearing. The results in terms of findings mirrored those described above under corporate governance where there was a strong positive correlation between good corporate governance and
good performance and compliance with international standards.
Most parastatals were technically insolvent as their continued existence (i.e. going concern status) depended upon continued support or bailout by the Government.
The review findings on financial reporting monitoring were as summarised below:
Financial Reporting MonitoringNumber of entities Number of Findings Percentage of Total
• IAS 7: Interest paid/received in the statement of cashflows.
- 3 5 8
Related party disclosures
• IAS 24: Incorrect/inadequate disclosures of related party balances and transactions.
- 2 1 3
General deficiencies in disclosures
• IAS 33: Weighted average number of shares in calculating EPS not disclosed.
• IAS 37: Description of the nature of a provision not disclosed
• IFRS 8: Inadequate disclosures on factors used to identify reportable segments
1 3 - 4
Valuation Inadequate disclosures of:• IFRS 13: Level 2 and Level 3 information;• IFRS 7: collateral; gains and losses on financial
instruments; market related risks and financial instruments carried at fair value.
1 4 7 12
Subsequent events
IAS 10: Dividends approved after balance sheet date incorrectly accrued for
1 4 - 5
Total 9 29 40 78
The overall average number of findings per company was 8 findings for all the companies reviewed. Compared to the average, parastatals had an average of 8 findings per company, listed companies averaged 7 findings per company and the only bank reviewed had 9 findings. This shows that compliance with IFRS for financial reporting is fairly uniform across the companies. This is because most of the companies are audited by the big-4 firms where standards are fairly high for PIEs. Hopefully, with BAOA’s input, the findings will gradually reduce.
Periodic reviews of the Corporate Governance Review Manual by BAOA will be made so that any changes arising from periodic international revisions of the code, such as those arising from the implementation of King 1V, for example, are captured.
5. THE CURRENT POSITION WITH THE BOTSWANA CODE OF CORPORATE GOVERNANCE
The Botswana Code of Corporate Government was prepared by a consultancy headed by Professor Mervin King through facilitation by the Directors Institute of Botswana. Our enquiries as to the process in progress in incorporating the new developments of King IV revealed the sad news that the Directors Institute of Botswana was not active as the members had not met in a long while. The Institute could therefore be regarded as ‘dormant’.
Consequently, the Botswana Stock Exchange Limited removed the Botswana Code from its
listing requirements as a recommended Code of Corporate Governance for the Botswana. This is a huge step backwards in view of the inroads that had been made for Botswana to have its own Code of Corporate Governance. In addition, the Code had been prepared through the support of an international donor, the African Development Bank (ADB).
The Directors Institute of Botswana is encouraged to resuscitate the Institute so that Botswana could have its own Code that it could work on domesticating as the current Botswana Code of Corporate Governance is a mirror image of King III and does not have legal enforceability in Botswana.
6. CONCLUSION
In comparing the performances of these different categories of PIEs, it is important to take cognisance of their mandates and objectives as certain entities like parastatals may concentrate on socio-economic developmental initiatives where the emphasis is on administration and delivering a product or service for the society rather than an emphasis on commercial viability and creating shareholder value. The emphasis on social delivery has in the past given birth to a culture of operational inefficiencies and poor financial performance.
That notwithstanding, a tailored adoption of good corporate governance practices can be beneficial across sectors or entities whether they are private entities, public entities, non-governmental organisations or investment entities. One apparent
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weakness that came to the fore during our reviews was that for certain entities, representation in the board was not based on the need to constitute a board with the right skills, knowledge and experience but on stakeholder representation without considering the legitimate interests and expectations of the broader stakeholders.
The decision by the Government of Botswana to monitor corporate governance practices in Botswana through the Authority is highly commendable and will revolutionise corporate governance in this country.
The results of the first batch of reviews conducted by the Authority have sent shock waves to the PIEs as many are found wanting in this regard. BAOA has also signed the long-awaited Memorandum of Understanding with PEEPA in order to coordinate activities by the two entities in pursuance of their mandates.
PIEs are encouraged to start preparations for the migration from King III to King IV (apply and explain) which is more principles based.
KNOW YOUR STAFF WITHMR ITUMELENG SELEBALAKHAI-Accountant
1. Describe your typical workday?
The ultimate objective of my work is to produce financial statements that comply with International Financial Reporting Standards (IFRS). On a monthly basis my objective is to prepare detailed Management Accounts to assist Management in decision making. In arriving at these two main objectives, my role covers cashflow management, bank reconciliations, management of debtors and creditors, ensuring compliance with financial and procurement procedures and budget management.
2. What skills are required in your position on a day-to-day basis?
By its very nature, my position requires advanced
knowledge of financial reporting, auditing and information technology. An accounting qualification and registration with Botswana Institute of Chartered Accountants are a prerequisite. I also have to meet the requirements of Continuing Professional Development (CPD). In this area, soft skills, time management, team spirit, good work ethics, leadership skills and communications skills in both writing and verbally are absolutely essential.
3. Which laws, regulations or standards guide your operations as an Accountant for the Authority?
In carrying out my role, I am guided by statutes such as the Companies Act and the Financial Reporting Act, 2010. In the area of Standards and Codes, I am guided by IFRS, Auditing Standards, Code of Ethics for accountants and the King III Code of Corporate Governance.
4. What parts of your job do you find most challenging?
The fact that in accounting deadlines are non-negotiable, reporting accurately and on time can be a major challenge if not properly managed. I often work additional hours and ensure that I prioritise my work. Compliance with IFRS is critical and the fact that standards frequently change, and new ones come in, makes it even more challenging.
5. How do you maintain accuracy of your accounting numbers on daily operations?
I apply the highest level of attention to detail and ensure compliance to laid down accounting procedures and standards. I manage transactions to ensure that financial and procurement procedures are adhered to all the time. The fact that my work is subjected to internal and external stakeholders review, requires care and diligence in executing my work.
6. What do you do when you have a tight deadline and multiple accounting assignments to finish?
Deadlines in the area of work are a regular occurrence. Prioritisation and management of my daily activities
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
16
through my diary are critical. More often than not, the deadlines require working overtime during the week and over the weekend.
7. How do you answer questions from clients who do not have any background in accounting?
This is the area where soft skills, such as presentation and communication skills are essential. However, the trick when dealing with laymen is to be as simple as possible and avoid, at all costs, the use of jargon. You have to “hold your client by the hand” so to speak and exercise a lot of patience and listening skills. Allow for as many questions as possible.
8. What developments in the Accounting profession can affect future prospects and opportunities?
Information Technology has taken over business activities in the accounting profession through the use of computer-based accounting systems and we see a lot of automation taking place today. The advent of the Internet has made this even more pronounced as remote access can be made and work can even be done from home or away from the work place. An accountant has, therefore, no choice but to
embrace technology and raise his level of IT literacy if he is to remain relevant.
9. Every profession evolves with time, what changes have you seen in your industry in the past five years?
Apart from new accounting standards issued, we have seen an improvement in oversight by regulators where it is evident that companies are now held accountable for their financial reporting regionally and within the country.
10. How has the Authority helped you to improve your accounting experience and skills?
The strength of the Authority is in its trained man power who has to embark upon lifelong learning. For this reason, Fridays at BAOA are dedicated to training through the use of both internal and external experts. This has assisted me significantly in making me a better accountant.
11. If you could start all over again, would you change your career path in any way? Why?
Absolutely not. I love this profession.
Audit Practice Reviews Undertaken in 2018 Overview of Audit Practice Review
Nine (9) certified audit firms and their certified auditors were reviewed during 2018. One (1) of these was a certified audit firm of Public Interest Entities (PIEs), and eight (8) were certified audit firms of Non-Public Interest Entities.
Overall, the quality of the firms’ system of quality control (firm reviews) has not improved in terms of average number of findings per audit firm. The average number of findings remained virtually static at five (5) findings for certified audit firms of PIEs and slightly decreased for certified audit firms of Non-PIEs from seven (7) to six (6) findings. (see Table A).
For the Engagement Reviews, the quality of the audits does not seem to be improving. As it will be noted in Table B, the average number of findings per attest partner increased in 2018 for certified auditors of PIEs to twenty-three (23) from eight (8) in the first cycle while for certified auditors of non-PIEs the average number of findings decreased slightly to twenty-four (24) from twenty-seven (27) in the first cycle. Clear distinctions can be noted for small audit firms which continue to record a high number of findings when compared to the “big” audit firms. Small audit firms find it difficult to resource their practices with adequately competent staff and engagement quality control structures to cope with the ever-changing audit and International Financial Reporting Standards (IFRS) landscape.
The Authority participated in the International Forum
of Independent Audit Regulators (IFIAR) 2018 Survey of Inspection Findings in which member countries were required, among other things, to classify findings into audit practice review/inspection themes provided by the IFIAR. All findings arising from both the firm and engagement reviews were classified into the IFIAR Inspection Themes. The detailed analysis of Firm Review and Engagement Review findings are provided in the following paragraphs.
Firm Reviews
All the key elements of each firm’s system of Quality Control Policies and Procedures were reviewed on a sample basis and were then compared to the standard requirements of ISQC 1. All deviations from the requirements of ISQC 1 were noted as “findings” and were allocated to their respective ISQC 1 element.
Provided in Table A below are the findings for 2018 and for the first cycle; allocated to each ISQC 1 element (IFIAR Theme), and split between audit firms of Public Interest Entities and Audit Firms of Non-Public Interest Entities:
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
17
Tabl
e A
: Firm
Rev
iew
Fin
din
gs a
lloca
ted
to th
e IS
QC
1 IF
IAR
“Ins
pect
ion
Them
es”
20
18
FIRS
T CYC
LE
(201
5 -2
017)
C
ERTIF
IED
AUD
IT FI
RMS
OF
PUBL
IC
INTE
REST
EN
TITIE
S
CER
TIFIE
D A
UDIT
FIRM
S O
F N
ON
- PU
BLIC
INTE
REST
EN
TITIE
S
ALL
CER
TIFIE
D A
UDIT
FIRM
S
CER
TIFIE
D A
UDIT
FIRM
S O
F PU
BLIC
IN
TERE
ST E
NTIT
IES
CER
TIFIE
D A
UDIT
FIRM
S O
F N
ON
- PU
BLIC
INTE
REST
EN
TITIE
S
ALL
CER
TIFIE
D A
UDIT
FIRM
S
SYS
TEM
OF
QUA
LITY
CO
NTR
OL
IFIA
R In
spec
tion
Them
e
Total findings
Total findings as a % of
total findings for all firms
Total findings
Total findings as a % of
total findings for all firms
Total findings
Total findings as a % of
total findings for all firms
Total findings
Total findings as a % of
total findings for all firms
Total findings
Total findings as a % of
total findings for all firms
Total findings
Total findings as a % of
total findings for all firms
Lead
ersh
ip R
espo
nsib
ilitie
s fo
r Qua
lity
with
in
the
Firm
(i.e
., To
ne a
t the
Top)
12%
24%
36%
5
3%
12
7%
17
10%
Inde
pend
ence
and
Eth
ical
Req
uire
men
ts0
0%5
11%
511
%
8
5%
22
12
%
30
17%
Clie
nt R
isk A
sses
smen
t, A
ccep
tanc
e an
d C
ontin
uanc
e 0
0%3
6%3
6%
00%
2
1%
2 1%
Hum
an R
esou
rces
12%
24%
36%
17
9%
37
21%
54
30%
Enga
gem
ent P
erfo
rman
ce2
4%24
49%
2653
%
14
8%
37
21
%
51
28%
Mon
itorin
g1
2%8
16%
918
%
6
3%
19
10
%
25
14%
Tota
l Fin
ding
s5
10%
4490
%49
100%
50
28
% 129
72%
179
100%
Num
ber o
f Aud
it Fi
rms
18
9
1018
28
Ave
rage
num
ber o
f find
ings
Per
Aud
it Fi
rm5
65
5
76
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
18
The nine (9) firms that were reviewed in 2018 recorded an average number of findings of 5 (five) per audit firm. For the first three-year (2015-2017) cycle twenty-eight (28) audit firms recorded an average number of findings of six (6) per firm.
The number of findings for the one (1) certified audit firm of public interest entities reviewed in 2018 was five (5). Over the first audit practice review cycle, the average number of findings for the ten (10) audit firms reviewed was five (5).
With regard to audit firms of Non-Public Interest Entities, the performance of the eight (8) audit firms reviewed in 2018 recorded an average number of findings of six (6); while for the first cycle, the eighteen (18) firms recorded an average number of findings of seven (7).
Analysis of the ISQC 1 findings by IFIAR inspection theme
The findings as summarised at Table A above, split by System of Quality Control IFIAR Inspection Themes are further analysed below, by each theme’s contribution to the total findings:
The Engagement Performance theme made the largest contribution to the total findings of 53% in 2018 and 28% in the first cycle. Audit Firms of Non-Public Interest Entities accounted for 49% of the findings, while audit firms of Public Interest Entities accounted for only 4% in 2018.
The Monitoring theme accounted for the second highest contribution to total findings of 18% in 2018 and 14% for the first cycle. Audit Firms of Non-Public Interest Entities contributed 16% of the findings compared to 2% contributed by Audit Firms of Public Interest Entities in 2018.
The Independence & Ethical Requirement element contributed 11% to the findings in 2018, and 17% in the first cycle. The entire 11% was attributed to Audit Firms of Non - Public Interest Entities.
Engagement Reviews
During 2018, a total of twenty-six (26) engagement reviews under the responsibility of thirteen (13) practitioners across nine (9) audit firms were carried out. During the first three-year cycle (2015-2017), a total of eighty-six (86) engagements under the responsibility of forty-five (45) practitioners across twenty-eight (28) audit firms were undertaken.
The results of the review of practitioners and the total number of findings, split between Certified Auditors of Public Interest Entities and Certified Auditors of Non-Public Interest Entities are provided in the Table B below:
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
19
Table B: Summary of Engagement Review Results for Certified Auditors of Public Interest Entities and Certified Auditors of Non-Public Interest Entities
2018First Cycle
(2015 – 2017)
DESCRIPTIONS
AUDITORS OF PUBLIC INTEREST ENTITIES
AUDITORS OF NON - PUBLIC
INTEREST ENTITIES
TOTAL
AUDITORS OF PUBLIC INTEREST ENTITIES
AUDITORS OF NON - PUBLIC
INTEREST ENTITIES
TOTAL
NUMBER OF FIRMS 1 8 9 10 18 28
Total Number of Partners 2 11 13 32 20 52Total Number of Attest Partners Reviewed 2 11 13 27 18 45
Total Number of Attest Clients (Total practitioners client Portfolio) 70 255 325 1,358 387 1,745
Total Number of Attest (Assurance) Engagements Reviewed 4 22 26 52 34 86
Total Number of Findings 45 267 312 221 490 711Average number of findings per Attest Partner 23 24 24 8 27 16
Attest Partner Rating:
1
5
6
24
6
301. Satisfactory
2. Unsatisfactory 1 6 7 3 12 15
Total Attest Partners 2 11 13 27 18 45
Firm Ratings:0 2 2 7 6 13
1. Satisfactory
2. Unsatisfactory 1 6 7 3 12 15
Total Firms 1 8 9 10 18 28
As will be noted from Table B above, of the total of thirteen (13) Certified Auditors reviewed in 2018, the performance of one (1) Certified Auditor of Public Interest Entities and five (5) Certified Auditors of Non-Public Interest Entities were “Satisfactory” while the performances of the other Certified Auditor of Public Interest Entities and six (6) Certified Auditors of Non-Public Interest Entities were “Unsatisfactory”. For the first cycle, of the total of forty-five (45) Certified Auditors reviewed twenty-four (24) Certified Auditors of Public Interest Entities and six (6) Certified Auditors of Non-Public Interest Entities) were “Satisfactory”. This meant that twelve (12) Certified Auditors of Non-Public Interest Entities and three (3) Certified Auditors of Public Interest Entities were “Unsatisfactory”.
Engagement Review Results: Analysis by Audit Area (IFIAR Inspection Theme Findings)
All deviations from the requirements of applicable Assurance Standards, International Financial Reporting Standards, Code of Ethics, and applicable laws and regulations were noted as “findings”.
Each engagement finding was allocated to one of the seventeen (17) Audit Inspection Themes (audit areas) provided by the IFIAR for the 2018 Survey. These were in turn split between Certified Auditors of Public Interest Entities and Certified Auditors of Non-Public Interest Entities. The results are provided in Table C below:
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
20
Tabl
e C
: Eng
agem
ent R
evie
w F
ind
ings
split
by
IFIA
R In
spec
tion
Them
es
20
18
FIR
ST C
YCLE
(2
015
- 201
7)
CER
TIFI
ED
AU
DIT
OR
S O
F PU
BLI
C IN
TER
EST
ENTI
TIES
CER
TIFI
ED
AU
DIT
OR
S O
F N
ON
-PU
BLI
C
INTE
RES
T EN
TITI
ES
TOTA
L A
UD
IT
ENG
AG
EMEN
TS
CER
TIFI
ED
AU
DIT
OR
S O
F PU
BLI
C IN
TER
EST
ENTI
TIES
CER
TIFI
ED
AU
DIT
OR
S O
F N
ON
-PU
BLI
C
INTE
RES
T EN
TITI
ES
TOTA
L A
UD
IT
ENG
AG
EMEN
TS
IFIA
R IN
SPEC
TIO
N T
HEM
ES
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Gro
up A
udits
00%
00%
00%
1
0%1
0%2
0%
Inte
rnal
Con
trol
Tes
ting
00%
00%
00%
0
0%1
0%1
0%
Ade
quac
y of
Fin
anci
al S
tate
men
t Pre
sent
atio
n an
d D
iscl
osur
es7
2%28
9%35
11%
65
9%71
10%
136
19%
Use
of E
xper
ts/S
peci
alis
ts
00%
00%
00%
0
0%1
0%1
0%
Subs
tant
ive
Ana
lytic
al P
roce
dure
s 0
0%0
0%0
0%
20%
81%
101%
Aud
it C
omm
ittee
Com
mun
icat
ion
00%
00%
00%
2
0%0
0%2
0%
Frau
d Pr
oced
ures
0
0%4
1%4
1%
71%
243%
314%
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
21
20
18
FIR
ST C
YCLE
(201
5 - 2
017)
CER
TIFI
ED
AU
DIT
OR
S O
F PU
BLI
C
INTE
RES
T EN
TITI
ES
CER
TIFI
ED
AU
DIT
OR
S O
F N
ON
-PU
BLI
C
INTE
RES
T EN
TITI
ES
TOTA
L A
UD
IT
ENG
AG
EMEN
TS
CER
TIFI
ED
AU
DIT
OR
S O
F PU
BLI
C IN
TER
EST
ENTI
TIES
CER
TIFI
ED
AU
DIT
OR
S O
F N
ON
-PU
BLI
C
INTE
RES
T EN
TITI
ES
TOTA
L A
UD
IT
ENG
AG
EMEN
TS
IFIA
R IN
SPEC
TIO
N T
HEM
ES
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Total Findings
Total Findings as a % of
findings for all Engagements
Ris
k A
sses
smen
t 0
0%8
3%8
3%
51%
183%
233%
Aud
it R
epor
t2
1%17
5%19
6%
81%
172%
254%
Acc
ount
ing
Estim
ates
, inc
ludi
ng F
air V
alue
M
easu
rem
ent
103%
72%
175%
1
0%10
1%11
2%
Rev
enue
Rec
ogni
tion
00%
21%
21%
0
0%5
1%5
1%
Inve
ntor
y Pr
oced
ures
00%
10%
10%
1
0%3
0%4
1%
Rel
ated
Par
ty T
rans
actio
ns
31%
155%
186%
16
2%18
3%34
5%
Enga
gem
ent Q
ualit
y C
ontr
ol R
evie
wer
s (“
EQC
R”)
00%
00%
00%
3
0%0
0%3
0%
Goi
ng C
once
rn2
1%2
1%4
1%
41%
81%
122%
Ade
quac
y of
Rev
iew
and
Sup
ervi
sion
45
14%
149
48%
194
62%
98
14%
263
37%
361
51%
Aud
it Sa
mpl
ing
21%
82%
103%
5
1%21
3%26
4%A
udit
of A
llow
ance
for L
oan
Loss
es a
nd L
oan
Impa
irmen
tsN
/A
00%
20%
20%
Oth
er A
reas
/Top
ics
N/A
3
0%19
3%22
3%
TOTA
L FI
ND
ING
S71
23%
241
77%
312
100%
22
131
%49
069
%71
110
0%
Not
e on
“N
/A”:
The
se th
emes
fell o
ff at
the
end
of 2
015-
2017
cyc
le.
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
22
241 (77%) of the 312 total findings for 2018 were for Certified Auditors of Non-Public Interest Entities, while the remaining 71 (23%) were for Certified Auditors of Public Interest Entities. In the first cycle, of the 711 findings, 490 (69 %) relate to Certified Auditors of Non-Public Interest Entities while 221 (31%) were for Certified Auditors of Public Interest Entities.
Most of the findings in the 2018 reviews were in the theme of “Adequacy of Review and Supervision” (62%), split between Certified Auditors of Non-Public Interest Entities (48%) and Certified Auditors of Public Interest Entities (14%). This was followed by the “Adequacy of Financial Statement Presentation and Disclosures” theme with (11%) of the findings, split between Certified Auditors of Non-Public Interest Entities (9%) and Certified Auditors of Public Interest Entities (2%).
This was also the case during the first cycle, as most of the findings related to the theme of ‘Adequacy of Review and Supervision’ (51%), split between Certified Auditors of Non-Public Interest Entities (37%) and Certified Auditors of Public Interest Entities (14%). This was also followed by the ‘Adequacy of Financial Statement Presentation and Disclosures’ theme (19%), split between Certified Auditors of Non-Public Interest Entities (10%) and Certified Auditors of Public Interest Entities (9%).
Summary of Audit Practice Review Findings and Decisions The Engagement Performance element of an audit firm’s system of quality control tends to have the most significant impact on the overall performance in a firm review. Therefore, all audit practices with engagement practitioners whose performance was “Unsatisfactory” in engagement reviews also attained an “Unsatisfactory” rating in the Engagement Performance element of the firm review; and consequently, attained an “Unsatisfactory” rating in the overall audit practice review. Of the nine (9) audit firm reviews undertaken during 2018, two (2) (22%) attained a “Satisfactory” rating while six (6) (67%) attained an “Unsatisfactory” rating with a recommendation for a re-review within 18 to 24 months; one (1) (11%) attained an ‘Unsatisfactory’ rating for the third time in a row (See Table B above) and the practitioner’s certificate was revoked in line with the BICA’s three strike rule.
During the first cycle, twenty-eight (28) firms were reviewed. Thirteen (13) (46%) of these attained a ‘Satisfactory’ rating; eleven (11) (39%) attained ‘Unsatisfactory’ rating and were recommended to be re-reviewed; four (4) (15%) attained an ‘Unsatisfactory’ rating for the third time in a row and three (3) of these practitioners’ certificates were revoked in line with the BICA’s three strikes rule while one (1) is pending the final outcome from BICA. (See table B above)
The Authority, however, wishes to emphasize that the primary objective of audit practice reviews is to raise the standard of audit and protect public interest. For that reason, the Authority’s audit practice review reports are proactive and forward looking, contain detailed recommendations and guidance to enable audit practices to improve their performance and overall standard of audit, where such need has been identified. Deregistration of an audit practitioner or firm is a last resort and will only be considered if an audit firm/practitioner fails three reviews consecutively, and it is determined that there is little prospect of an audit firm/practitioner improving in the short-term in order to meet the minimum performance standards; or if the performance of a firm or practitioner, even if at first or second review, is considered so inadequate that continued practice would put public interest or those for whom the audit reports are intended, at significant risk. Conclusion Based on the results of the audit practice reviews undertaken by the Authority in 2018, it is evident that audit firms need to improve their systems of quality controls, particularly the Engagement Performance and Monitoring elements.
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
23
By Thapelo Otukile
The signing of MoUs with other regulators and enforcement organisations was found necessary for the following reasons:
a) a closer look at a number of their respective mandates reflected a number of overlaps and duplications which required to be rationalised to avoid wastage in the use of resources. These arrangements will ensure that regulators specialise in areas that they have expertise in and rely on formal information exchange in all other areas as may be necessary;
b) to provide a platform for dialogue, and information exchange, training and research between parties in matters of mutual interest;
c) to provide a framework for parties to cooperate and communicate constructively in order to carry out their independent statutory responsibilities as stated above; and
d) cooperation and communication will benefit both parties through efficient and effective regulation of Public Interest Entities and enforcement of financial reporting laws, amongst others.
MoUs, therefore, serve only as a stopgap intervention, but, if managed properly, could achieve the required objective until the longer-term solution is achieved
In an effort to contribute towards an efficient and effective Authority that is with aligned International best practices, the Authority signed two new MoUs with CIPA and PEEPA in 2018. The Authority has in the past signed other MoUs with the Botswana Stock Exchange, Botswana Institute of Chartered Accountants, Bank of Botswana, and Non-Bank Financial Institutions Regulatory Authority.
While the longer-term solution would be to revise the statutes that established these entities, this
BAOA signs Memoranda of Understanding (MoUs) with Companies and Intellectual Property Authority (CIPA) and Public Enterprises Evaluation
and Privatisation Agency (PEEPA)
BAOA CEO, Mr Duncan Majinda with PEEPA CEO, Mr Ezekiel Moumakwa exchanging MoUs during the signing ceremony
BAOA CEO, Mr Duncan Majinda with CIPA CEO, Mr Conductor Masena (C)signing an MoU, flagged by Legal personnel from the two Authorities
would call for a holistic approach requiring the amendments of several statutes as, in some cases, the overlaps involve more than two entities.
Finalisation of MoUs with the Office of the Auditor General, Botswana Qualifications Authority (BQA), and Human Resource Development Council (HRDC) is underway.
BA = 100 BLACK
O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
24
By Ndulamo Ntopo
Botswana Accountancy Oversight Authority (the Authority) continues to explore and utilise available opportunities to implement its outreach programme intended to introduce the Authority to the stakeholders by explaining its role and mandate. In pursuance of this spirit, the Authority participated in the Botswana Consumer Fair from the 27th August to 2nd September 2018 under the theme: Its more than just shopping.
The consumer fair attracts both local and international participants and it is for this reason that the Authority recognises it as a good outreach platform and opportunity to raise awareness, advertise its mandate and also to interact with stakeholders. A large number of visitors and exhibitors visited the Authority’s stall to learn more about its role in financial reporting, auditing and corporate governance.
BAOA continues reaching out to stakeholders
BAOA CEO, Mr Duncan Majinda (L) explaining the mandate of the Authority to a visitor. BAOA PRO, Ms Ndulamo Ntopo, sharing with students on the services provided by the Authority.
BAOA Stall
The Botswana Consumer Fair is an all-inclusive fair that offers great opportunities to promote and diversify the economy through creation of new products and services for various sectors and promoting direct trade. The consumer fair also offers a platform to build brand equity through promotions and face to face direct marketing.
Some of the highlights from the event included a visit to the Authority’s Stall by the Botswana Medical Regulatory Authority (BOMRA) CEO which was followed by a formal meeting arranged at their offices for presentation on registration requirements. The Authority was also delighted to address students from Primary to Senior Secondary schools who visited our stall as we believe that sensitisation on accounting and auditing is best done at the grassroot level.
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By Ndulamo Ntopo
September 30th is a big day in Botswana as the country celebrates its independence which it attained on 30th September 1966. Before then, Botswana was called Bechuanaland and it was a British Protectorate.
In 2018, Botswana celebrated 52 years of Independence and the Ministry of Youth, Sport and Culture Development (MYSC) was assigned the responsibility to oversee these celebrations. The main event was held at the National Stadium in Gaborone. As a Parastatal, Botswana Accountancy Oversight Authority (the Authority) was one of the participants that took part in the carnival march or float procession from Gaborone Technical College Grounds (GTC) to the National Stadium. The procession was characterised by creative displays of products and services as well as demonstrations and exhibitions of diverse cultures and heritage by different organisations. The Authority came up with creative designs to showcase its mandate and services as encapsulated in the Financial Reporting Act, 2010 (its
BOT 52 Celebrations
Float procession
founding legislation). BAOA shared a float trailer with other parastatals from the Ministry of Finance and Economic Development such as Botswana Institute of Chartered Accountants (BICA) and Statistics Botswana.
The proceedings afforded ordinary citizens the opportunity to participate and enjoy the celebrations and also appreciate the roles of the many organisations that the Government uses to achieve its role of economic development and service delivery. As the procession headed to the National Stadium from the GTC grounds, it was applauded by multitudes of people along the route who were appreciating the creative works, brands and the products and services that were on display.
The Authority shall continue to be part of such celebrations and several other Governmental programmes and initiatives that contribute to the great future of this country.
Attendants at the Bot 52
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By Patrick Andrew Jansen
In the context of computing, security comprises of cybersecurity and physical security. Cybersecurity is the protection of Internet connected systems, including hardware, software and data from digital attacks. This means that Cybersecurity is solely concerned with attacks that are inflicted on the systems through digital access and means. It, thus, does not involve physical access to the systems. Within Cybersecurity we have the broad groupings of Information Security which deals with the confidentiality, integrity and availability of data; application security; Network security; and Operational security.
Cybersecurity is not another buzz word; it is a real issue affecting all sectors. Gartner, in August 2018, predicted that the global expenditure on information security products will exceed $114 billion at the end of 2018 and grow by a further 8.7% to $124 billion in 2019. Ten percent of this growth is driven by privacy concerns. Regulation, such as the European Union’s Global Data Protection Regulation (GDPR) has also had a factor on the growth on Cybersecurity related spending.
The global costs of cybercrime on the other hand, are now estimated at between $500 billion to $1 trillion. These costs exceed the national budgets of most countries and remain the driving factor behind new and more complex crimes.
Cybersecurity threats can take one of the forms of Ransomware, Malware, Social Engineering, and Phishing. Ransomware is a form of extorsion which involves disenfranchising the victim of his or her system or its contents. This is typically achieved through encryption of the victim’s data and demand for payment to decrypt and unlock the contents. The attack on the system may be launched through a combination of malware, phishing and social engineering. The second threat of Malware is a grouping of files or programs that can harm computer systems such as Viruses, trojans, worms and spyware. This is the most common grouping of threats that most users are accustomed to. It was initially made more prevalent through file sharing through removable media such as diskettes but ballooned with the advent of the Internet through file sharing sites such as BitTorrent and Kazaa.
Social Engineering and Phishing involve human intervention, and these are by far the most difficult to contain. Social Engineering involves interacting with a victim in a manner that tricks the victim to release information that allows the attacker to circumvent the system controls. A simple scenario is where the victim releases log in credentials that allow the attacker to take control of the system. Once control is gained, it may be used to unleash other attacks on the system
or as a launching pad for other forms of attack on other systems. User education and vigilance is crucial in reducing this kind of attack. Phishing, also very common, involves masking fraudulent intents through emails or links that resemble those from reputable organisations. This is where the text of a link depicts one’s intents whilst the underlying link directs a victim to a completely different site. The recent attacks on Apple™ devices used the same trick to compromise iPhones. Sometimes attackers use a domain name very similar to a genuine site such as an online banking portal to direct users to a similarly looking website where they unknowingly enter their login credentials which the attacker or hackers then collects to later use to impersonate the legitimate user.
Many organisations, including the Authority, have measures in place, spanning from policy, end user education, monitoring to software systems such as anti-viruses, that are aimed at blocking and mitigating attacks. A successful cybersecurity framework is a result of the orchestration of all these measures.
Users of computer systems are required to be more vigilant when using computer systems. This involves adequately identifying the Internet sites they use, using only trusted removable media, safely keeping sensitive information and reporting any suspicious incidents and most importantly creating and rotating complex credentials.
4. h t t p s : / / w w w . f o r b e s . c o m / s i t e s /r o g e r a i t k e n / 2 0 1 8 / 0 8 / 1 9 / g l o b a l -information-security-spending-to-exceed-124b- in -2019-pr ivacy-concerns -d r iv ing-demand/#3c983d287112
5. ht tps : // searchsecur i ty . techtarget .com/definition/cybersecurity
6. h t t p s : / / w w w . f o r b e s . c o m / s i t e s /forbestechcouncil/2018/09/28/breaking-down-malware-why-its-still-one-of-the-biggest-threats-facing-businesses/#761906c4fe1a
Cybersecurity Awareness
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Botswana Accountancy Oversight Authority New Appointments
By Boitumelo V. Raditladi
The Botswana Accountancy Oversight Authority has made several new appointments in 2018 including the position of Director Technical, which is critical in the execution of the mandate of the Authority.
Mr Innocent Munjanja has been appointed as the Technical Director effective 3rd October 2018. His appointment follows the departure of Mr Joe Mutwale from the Authority in March 2018. Mr Munjanja has vast experience in the critical area of external audit as well as wide knowledge of International Financial Reporting Standards, including training experience in these areas. He also has experience in the area of audit practice quality reviews which he carried out in Botswana, South Africa, Zimbabwe, Portugal and the United Kingdom as part of an international team appointed by Ernst and Young Global Office in London.
Mr Motlatsi Morty Mmusi joined the Authority on 3rd December 2018 as Finance Manager responsible for managing and controlling the provision of
financial management and accounting services to the Authority. Mr Mmusi joins the Authority from the private sector and brings vast experience in financial reporting, management and financial analysis, amongst others.
Ms Neo Shirley Kwape and Ms Boitumelo Rabatshabeng also joined the Authority under the Technical Department as Reviewer and Assistant Reviewer, respectively in November 2018. The role of these two employees will be to undertake audit practice reviews and financial reporting monitoring reviews of Public Interest Entities (PIE’s) in accordance with applicable accounting and auditing standards. The two officers bring internal and external audit experience which is essential for their positions.
The Authority believes in empowering its staff and has thus employed Ms Dorcas Tjizoo who was an Internship Participant, on a definite contract in September 2018.
Neo S. KwapeReviewer
Innocent MunjanjaTechnical Director
Boitumelo RabatshabengAssistant Reviewer
Motlatsi M. MmusiFinance Manager
Dorcus TjizooAccounts Officer
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To: Botswana Accountancy Oversight Authority Stakeholders
REGISTRATION OF CERTIFIED AUDITORS AND AUDIT FIRMS OF PUBLIC INTEREST ENTITIES (PIEs)
As you are aware, the Financial Reporting Act, 2010 (the Act) ushered in the Botswana Accountancy Oversight Authority to, among other functions:
a) set the standard and quality of accounting and audit services; and
b) protect the interest of the general public and investors in entities.
With specific reference to Certified Auditors of PIEs and Audit Firms for PIE, Section 24 of the Act states that “notwithstanding anything contained in the Companies Act, or any other law, a person shall not hold any appointment, or offer any services for remuneration, as a Certified Auditor of a PIE, unless he or she is registered by the Authority as a Certified Auditor of PIE under this Act”, while Section 25 of the Act states that an audit firm shall not practise or provide audit services to a PIE unless such firm is registered with the Authority.
Pursuant to the foregoing, the following Certified Auditors of PIE and Audit Firms for PIEs are registered with the Authority as at 31st January 2019:
CERTIFIED AUDIT FIRM FOR PIE REGISTRATION NUMBER CERTIFIED AUDITOR OF PIE REGISTRATION NUMBER
All Public Interest entities are therefore informed that only the above listed certified auditors and audit firms are permitted to offer audit services to Public Interest Entities.
If you wish to obtain any more information or clarification, please contact either the undersigned or the Director, Technical, e-mail [email protected] you for your cooperation.
Yours sincerely,
Duncan D Majinda CHIEF EXECUTIVE OFFICEREmail: [email protected] line: 3919735
1 Capital Bank Limited BoB 0012 Bank of India BoB 0023 Bank SBI Botswana Limited BoB 0034 Bank of Baroda BoB 0045 First National Bank of Botswana BoB 0056 Bank Gaborone Limited BoB 0067 Rennies Foreign Exchange Proprietary Limited BoB 0078 African Banking Corporation of Botswana Limited BoB 0089 Barclays Bank of Botswana Limited BoB 009
Public Interest Entities (PIEs) Registered with the Botswana Accountancy Oversight Authority (BAOA) as at 31st December 2018
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30
10 Stanbic Bank Botswana Limited BoB 001011 Standard Chartered Bank BoB 001112 UAE Exchange BoB 001213 Gorogang Bureau de Change BoB 001314 Tshilong Bureau de Change BoB 001415 TLR Money Link Bureau de Change BoB 001516 Sunny Bureau de Change BoB 001617 Silver Bureau de Change BoB 001718 Proxy Bureau de Change BoB 001819 Ozair Bureau de Change BoB 001920 Macheng Bureau de Change BoB 002021 Boitekanelo Bureau de Change BoB 002122 Sherwood Bureau de Change BoB 002223 Garona Foreign Exchange Bureau (Pty) Ltd BoB 002324 Mochudi Bureau de Change BoB 002425 Master Bureau de Change BoB 002526 Limpopo Bureau de Change BoB 002627 Border Forex (Pty) Ltd BoB 002728 Andy & Esi Bureau de Change BoB 0028
TOTAL: 27ENTITIES SUPERVISED BY THE NON-BANK FINANCIAL INSTITUTIONS
10 Regent Life Botswana Limited NBF 001011 Botswana Stock Exchange NBF 001112 Norsad Finance Limited NBF 001213 Bona Life Insurance NBF 001314 Alexander Forbes Botswana Group Holdings Limited NBF 001415 Kalahari Insurance Brokers NBF 001516 Kebonang Holdings (Proprietary) Limited NBF 001617 AON Botswana (Proprietary) Limited NBF 001718 Phoenix of Botswana Assurance Co. Proprietary NBF 001819 GetBucks (Proprietary) Limited NBF 001920 Kgori Capital (Proprietary) Limited NBF 002021 Liberty Life Botswana NBF 002122 First Sun Alliance (Proprietary) Limited NBF 002223 Penrich Insurance Brokers NBF 002324 Bank Gaborone Insurance Agency NBF 002425 FMRE Property and Casualty (Proprietary) Limited NBF 002526 Investec Asset Management Botswana NBF 002627 Botswana Public Officers Pension Fund NBF 002728 Sesiro Insurance (Proprietary) Limited NBF 002829 Marsh Botswana (Proprietary) Limited NBF 002930 Hollard Life Botswana NBF 0030
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31
31 Imara Holdings Limited NBF 003132 Hollard Insurance (Proprietary) Limited NBF 003233 Bayport Financial Services NBF 003334 Old Mutual Short-Term Insurance (Botswana) Limited NBF 003435 Old Mutual Life Insurance Company (Botswana) (Pty) Ltd NBF 003536 Continental Reinsurance Company Limited NBF 003637 Alpha Direct Insurance Company NBF 003738 Botswana Housing Corporation Staff Pension Fund NBF 003839 Botswana Ash Staff Pension Fund NBF 003940 Alexander Forbes Individual Member Pension Fund NBF 004041 African Alliance Botswana Securities Limited NBF 004142 Alexander Forbes Financial Services Botswana NBF 004243 Alexander Forbes Asset Consultants (Pty) NBF 004344 Botswana Life Insurance Limited NBF 004445 Botswana Insurance Fund Management NBF 004546 Legal Guard NBF 004647 Botswana Insurance Fund Management Unit Trusts NBF 004748 Allan Gray Botswana NBF 004849 StockBrokers Botswana Limited NBF 004950 Investec Fund Managers Botswana NBF 005051 Barclays Bank Staff Pension Fund NBF 005152 First National Bank Pension Fund NBF 005253 Alexander Forbes Retired Fund NBF 005354 Water Utilities Staff Pension Fund NBF 005455 Kgalagadi Breweries Limited Pension Fund NBF 005556 BURS Pension Fund NBF 005657 BBS Pension Fund NBF 005758 Debswana Staff Pension Fund NBF 005859 Stanbic Bank Botswana NBF 005962 Civil Aviation Authority Botswana Staff Pension Fund NBF 006061 Ipro (Botswana) (Pty) Ltd NBF 006162 Africa Fifty Three Provident Fund NBF 006263 Botswana Telecommunications Limited Staff Pension Fund NBF 006365 Botswana Examinations Council Pension Fund NBF 006465 G4S Limited Pension Fund NBF 006566 Local Enterprise Authority Pension Fund NBF 006667 BPOMAS NBF 006768 PULA Medical Aid NBF 006869 Ernst & Young Pension Fund NBF 006970 National Development Bank Staff Pension Fund NBF 007071 BIHL Defined Contribution Retirement Fund NBF 007172 Bank of Botswana DC Staff Pension Fund NBF 007273 BUIST Staff Pension Fund NBF 007374 Engen Botswana Retirement Fund NBF 007475 Deloitte & Touche Pension Fund NBF 007576 Botswana Telecommunications Staff Pension Fund NBF 007677 Botswana Power Corporation Staff Pension Fund NBF 007778 Mascom Wireless Staff Pension Fund NBF 007879 Total Pension Fund NBF 007980 Apex Retirement Fund NBF 008081 Puma Energy Pension Fund NBF 0081
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O = C=100 M=96 Y= 25 K= 22
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82 Fleming Asset Management Botswana NBF 008283 Bomaid/Southview Group Staff Pension Fund NBF 008384 Free Standing Additional Voluntary Contribution NBF 008485 UB Pension Fund NBF 008586 Standard Chartered Bank Pension Fund NBF 008687 BMC Pension Fund NBF 008788 Sentlhaga Pension Fund NBF 008889 Millennium Retirement Fund NBF 008990 Sefalana Group Staff Pension Fund NBF 009091 Botswana Insurance Company Retirement Fund NBF 009192 Motor Vehicle Accident Retirement Fund NBF 009293 Botswana Railways Staff Pension Fund NBF 009394 Maru-a-pula School Staff Pension Fund NBF 009495 Deferred Pensioners Pension Fund NBF 009596 Foreign Service Nationals Retirement Fund NBF 009697 Majwe Mining Provident Fund NBF 009798 Vivo Energy Pension Fund NBF 009899 Botswana Agricultural Marketing Board Pension NBF 0099
100 Botswana Post Staff Pension Fund NBF 00100101 BOBS Staff Pension Fund NBF 00101102 CEDA Staff Pension Fund NBF 00102103 Metropolitan Pension Fund NBF 00103104 Metropolitan Provident Fund NBF 00104105 Orange Staff Pension Fund NBF 00105106 Botsogo Health Plan NBF 00106107 Barclays Life Botswana NBF 00107108 Air Botswana Pension Fund NBF 00108109 BDC Contributory Staff Pension Fund NBF 00109110 Apostolic Faith Mission Pension Fund NBF 00110111 BSB Staff Pension Fund NBF 00111112 Glenrand M.I.B Pension Fund NBF 00112113 Hollard Insurance Botswana Pension Fund NBF 00113114 Botswana Telecommunications Authority Staff Fund NBF 00114115 Aon Botswana Preservation Fund NBF 00115116 Botswana Vaccine Institute Pension Fund NBF 00116117 IDM Pension Fund NBF 00117118 NAFTEC Pension Fund NBF 00118119 BCL Staff Pension Fund NBF 00119120 BOMAID NBF 00120121 BOCODOL Staff Pension Fund NBF 00121122 Botswana Savings Bank Staff Pension Fund NBF 00122123 Glenrand Orphans Fund NBF 00123124 Aon Botswana Defined Contribution Fund NBF 00124125 Stanlib Botswana Managed Prudential Fund NBF 00125126 Stanlib Botswana Income Fund NBF 00126127 Stanlib Botswana Equity Fund NBF 00127128 Stanlib Botswana Money Market NBF 00128129 African Alliance Botswana Management Company NBF 00129
TOTAL 129ENTITIES DETERMINED BY THE MINISTER
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1 Woolworths (Botswana) Proprietary Limited MIN 0012 Motovac (Proprietary) Limited MIN 0023 Morupule Coal Mine Limited MIN 0034 Radical Investments (Proprietary) Limited MIN 0045 Motor Centre MIN 0056 Diamond Trading Company Botswana MIN 0067 Global Holdings Botswana MIN 0078 CitySkapes MIN 0089 Allied Investments MIN 009
10 Bolux Group MIN 001011 Trans Africa MIN 001112 Kromberg& Schubert Botswana MIN 001213 Tati Nickel Mining Company MIN 001314 Mupane Gold Mining MIN 001415 Overseas Development Enterprises MIN 001516 DeBeers Global Sightholder Sales MIN 001617 Vivo Energy Botswana MIN 001718 CA Sales and Distribution MIN 001819 Lenmed Health Bokamoso Private Hospital MIN 001920 Mascom Wireless MIN 002021 Naledi Motors MIN 002122 Consolidated Group Contractors Sal MIN 002223 Boteti Mining MIN 002324 Botswana Ash MIN 002425 Kgalagadi Breweries MIN 002526 FSG Limited MIN 002627 Puma Energy MIN 002728 Debswana Limited Company MIN 002829 Healthcare Management Services MIN 002930 Orange Botswana (Proprietary) Limited MIN 003031 Pula Sales (Proprietary) Limited MIN 003132 Clover Botswana (Proprietary) Limited MIN 003233 Majwe Mining Joint Venture MIN 003334 J Haskins & Sons (Proprietary) Limited MIN 003435 Barloworld (Proprietary) Limited MIN 003536 Universal Builders (Proprietary) Limited MIN 003637 Bokomo (Proprietary) Limited MIN 003738 Retail Holdings Botswana (Proprietary) Limited MIN 003839 M Suresh Botswana (Proprietary) Limited MIN 003940 Master Farmer Feeds (Proprietary) Limited MIN 004041 Khoemacau(Proprietary) Limited MIN 004142 Unik Construction Engineering (Proprietary) Limited MIN 004243 Unitrans Botswana (Proprietary) Limited MIN 004344 Diacore Botswana (Proprietary) Limited MIN 004445 Komatsu Botswana (Proprietary) Limited MIN 004546 Cash Bazar Holdings (Proprietary) Limited MIN 004647 Barloworld Equipment Botswana (Proprietary) Limited MIN 004748 Senn Foods (Proprietary) Limited MIN 004849 KGK Diamonds Botswana MIN 004950 Deci Investments (Proprietary) Limited MIN 0050
TOTAL 50
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A = C=75 M=13 Y= 0 K= 0
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ENTITIES REQUIRED TO FILE FINANCIAL STATEMENTS AND REPORTS WITH A GOVERNMENT DEPARTMENT OR AUTHORITY
1 Citizen Entrepreneurial Development Agency PAR 0012 Botswana Bureau of Standards PAR 0023 Botswana National Sports Council PAR 0034 Botswana Vaccine Institute PAR 0045 Botswana Postal Services Limited PAR 0056 Gambling Authority PAR 0067 University of Botswana PAR 0078 Local Enterprise Authority PAR 0089 Botswana Communications Regulatory Authority PAR 009
10 Botswana Oil Limited PAR 001011 Botswana Savings Bank PAR 001112 Institute of Development Management PAR 001213 Botswana Building Society PAR 001314 Botswana Meat Commission PAR 001415 Botswana Housing Corporation PAR 001516 Motor Vehicle Accident Fund PAR 001617 Competition Authority PAR 001718 Botswana Investment & Trade Centre PAR 001819 Public Procurement & Asset Disposal Board PAR 001920 Botswana Institute for Development Policy Analysis PAR 002021 Companies and Intellectual Property Authority PAR 002122 Debt Participation Capital Funding Limited PAR 002223 Botswana International University of Science and Technology PAR 002324 Civil Aviation Authority of Botswana PAR 002425 Forest Conservation Botswana PAR 002526 Botswana Railways PAR 002627 Air Botswana PAR 002728 National Food Technology Research Centre PAR 002829 Botswana Fibre Networks PAR 002930 Bank of Botswana PAR 003031 Botswana Privatisation Asset Holdings PAR 003132 National Development Bank PAR 003233 Botswana National Productivity Centre PAR 003334 BOCODOL PAR 003435 Botswana Qualifications Authority PAR 003536 SPEDU PAR 003637 Water Utilities Corporation PAR 003738 Minerals Development Company Botswana PAR 003839 Botswana Agricultural Marketing Board PAR 003940 Botswana Power Corporation PAR 004041 Engineers Registration Board PAR 004142 Quantity Surveyors Registration Council PAR 004243 Botswana Examinations Council PAR 004344 Okavango Diamond Company PAR 004445 Legal Aid Botswana PAR 004546 Botswana Development Corporation PAR 004647 Construction Industry Trust Fund PAR 004748 Botswana Tourism Organisation PAR 0048
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O = C=100 M=96 Y= 25 K= 22
A = C=75 M=13 Y= 0 K= 0
35
49 Human Resource Development Council PAR 004950 Botswana Accountancy College PAR 005051 Botswana University of Agriculture and Natural Resources PAR 005152 Public Enterprises Evaluation and Privatisation Agency PAR 005253 Architects Registration Council PAR 005354 Botswana Unified Revenue Service PAR 005455 Statistics Botswana PAR 005556 Botswana Innovation Hub PAR 0056
TOTAL 56TOTAL OF REGISTERED ENTITIES 284
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NOTICEALL PUBLIC INTEREST ENTITIES ARE NOTIFIED OF THE DEADLINE FOR
RENEWAL OF REGISTRATION FOR 2019 WITH BOTSWANA ACCOUNTANCY OVERSIGHT AUTHORITY
The Botswana Accountancy Oversight Authority (BAOA) wishes to remind all its stakeholders that the deadline for renewal of registration with BAOA as a Public Interest Entity (PIE), Certified Auditor of PIE, Audit Firm of PIE, a Professional Accountancy Body (PAO) and Branches of the Institute is the 31st December, 2018. This is pursuant to Regulations 6(1), 11(1), 12(1) and 16(1) of the Financial Reporting (Public Interest Entities) Regulations, 2016 (the Regulations).
In accordance with the Regulations, entities which fail to renew its registration as such or fail to pay the renewal of registration fee shall be liable to pay a penalty of fifty percent (50%) of the annual subscription fee on renewal of registration.
For this purpose, Sections 22 and 56(1) of the Financial Reporting Act, 2010 read with Regulation 3(1) of the Financial Reporting (Public Interest entities) Regulations, 2016 define a PIE as:
1. Any entity that is listed in the Botswana Stock Exchange;2. Any entity that is supervised by the Bank of Botswana;3. Any entity that is supervised by the Non-Bank Financial Institutions Regulatory Authority;4. Any entity which, at the end of the preceding accounting year, exceeded at least two of the following
thresholds:a) An annual revenue of P300 million;b) 200 employees;c) Total assets of P200 million; ord) Total liabilities of P100 million not including shareholders’ equity; and
5. Any entity required under any enactment to file financial statements and reports with a Government department or authority, in accordance with Section 56(1) of the Financial Reporting Act, 2010.
All PIEs as defined above which have not yet registered with BAOA are also urged to register by the above-mentioned deadline, taking note that failure to do so is a breach of the Law which shall attract significant penalties.
Please contact the Legal Officer, Mr Thapelo Otukile at [email protected] or telephone number3919735 for any further clarification.
