WELCOME ADDRESS BY HON. ABDISALAAM
ISSA KHATIBU (MP), DEPUTY MINISTER FOR FINANCE TO
STAKEHOLDERS’ WORKSHOP ON “UPDATING OF
ACCOUNTING AND AUDITING LEGISLATION IN TANZANIA,”
THHELD ON WEDNESDAY 29 NOVEMBER 2006, KILIMANJARO
DAR ES SALAAM
Chairman and Members of the NBAA Governing Board,
World Bank Officials,
NBAA Acting Executive Director,
Consultants to the Project,
Ladies and Gentlemen,
1. It is an honour and great pleasure to be given this opportunity to
officiate this historical workshop on “updating the accounting and auditing legislation in Tanzania.” Since this is my first audience with members and stakeholders of the accounting profession in
Tanzania this year, may I on behalf of the Minister of Finance and on
my own behalf congratulate, Mr. Ludovick S.L. Utouh for his presidential appointment as the new Controller and Auditor General of the United Republic of Tanzania. He is your true product of the profession and through his leadership, we shall, with your support carry the ongoing financial reforms in Tanzania.
May I also congratulate all members of the accounting profession who were elected new Members of Parliament in the fourth Phase Government under the leadership of H.E. President Jakaya Mrisho Kikwete.
We wish all those elected and appointed good health and success in their new careers.
Mr. Chairman, today’s forum is one of the products of the
ongoing financial reforms in the country, which is being accomplished by the Government of the United Republic of Tanzania and, assisted by our development partners like the World Bank. The project is on updating the accounting and auditing legislation in Tanzania.
Mr. Chairman, a similar forum was held in March 2006 and the focus was on a World Bank and International Monetary Fund “Report
on Observance of Standards and Codes (ROSC)“ study aimed at
strengthening the corporate financial reporting regime in the country.
Chairman, the World Bank ROSC Study revealed that the National Board of Accountants and Auditors (NBAA) has made a
significant contribution to accounting development of the accounting
profession over the past decade through its examination processes,
professional education programmes and usage of International
Accounting and Auditing Standards. However, among the constraints
is the lack of learning materials on these international standards.
Another problem which was identified by the Study was that NBAA is unable to
function effectively both as a regulator and a professional body. This is due to the
composition of the Governing Board, whose membership does not allow for adequate
regulatory public oversight by non-accountants. Additionally, there is lack of capacity to
undertake monitoring activities in order to ensure compliance with accounting and
auditing standards by the Practitioners.
Furthermore, it was observed that in some cases the accounting and disclosure
requirements set by other legislations like the Bank and Financial Institutions Act,
Insurance Act, Capital Market and Securities Act and Companies Act are incompatible
with the International Financial Reporting Standards requirements.
Mr. Chairman, as stated above, the ROSC Report is based on a review of
strengths and weaknesses of existing institutional framework that underpin financial
accounting and auditing practices, the actual practices, as well as an analysis of the
effectiveness of monitoring and enforcement mechanism. Various weaknesses and
encouraging advancements were revealed in the study. The challenge, now facing both
the Government and NBAA, is to work on the weaknesses identified in order to come up
with improvements in the financial reporting regime in the country.
Mr. Chairman, one thing, which the profession should take into consideration,
which is also the Government headache, is the introduction of an oversight body, which
is a major recommendation in the ROSC report. The World Bank thinks that this is in
line with the global trend towards accountancy bodies being more open in their
governance and regulatory processes and towards more independent oversight or
regulation in areas of public interest.
The oversight (regulatory) body among other things shall be responsible for adoption,
monitoring, and enforcement of accounting and auditing standards based on financial
reporting of Public Interest Entities (PIE).
Mr. Chairman, may I emphasize again that, a financial reporting system
supported by strong governance, high quality standards and sound regulatory
frameworks is key to our economic development. Indeed, high quality standards in
financial reporting, auditing and ethics underpin the trust that investors place in financial
and non-financial information and, go a long way in contributing to a country’s economic
growth and financial stability.
Mr. Chairman, we must also agree that as forces of globalisation prompt more
and more countries to open their doors to foreign investments and as businesses
themselves expand across borders, both the public and private sectors are increasingly
recognizing the benefits of having a commonly understood financial reporting framework
supported by strong globally accepted auditing standards. If we need to have enhanced
sustainable economic growth, we must comply with requirements set by these
Mr. Chairman, the Project on “updating of accounting and auditing standards legislation in Tanzania” by the World Bank commissioned consultants – Emerging
Markets Group [ EMG] is one of the Government’s attempts to solve the above
problems in order to strengthen our financial architecture in crisis prevention mitigation
The EMG Consultants have researched, consulted a number of key stakeholders
and come up with the following proposals for our deliberations and recommendations to
(a) Update the current legal framework for accounting and auditing in
(b) Restructure the NBAA so as to be a public oversight (regulatory) body to
monitor compliance by auditors and accountants with international
standards as they apply to public interest entities.
(c) Develop a strong independent professional institute for accountants and
Mr. Chairman, the sooner this goal is achieved, the better will be the financial
and economic environment needed to compete in today’s global economy. On this
score may I sincerely express my appreciation to the World Bank, Consultants and the
NBAA for their timely organisation of this stakeholders workshop aimed at coming up
with concrete and workable recommendations. Please feel at ease and get prepared to
contribute intellectually and if necessary provocatively.
Mr. Chairman, since I see you have a very busy programme to discuss issues
concerning updating of the current legal framework for accounting and auditing in
Tanzania, restructuring of NBAA and establishing accountancy institute, I would like to
end my opening remarks by wishing you very fruitful deliberations. May I thank you for
your attention and I now declare this Workshop officially opened.