Intent Declared Summary
According to an assessment of the accounting and auditing environment in Ghana conducted by the World Bank in 2004, although Ghana National Standards on Auditing (NSAs) are based on the International Standards on Auditing (ISAs), they are "outdated" and not in line with current international standards. Furthermore, the assessment pointed out that, with the exception of the banking sector, compliance with the existing NSAs was weak, due to inadequate enforcement mechanisms. One of the World Bank's major recommendations was to call for the creation of an independent oversight body to be responsible for the process of adoption and enforcement of accounting and auditing standards based on international equivalents for public interest entities. The World Bank also recommended developing simplified reporting requirements for Small and Medium-size Enterprises. In a 2007 speech by then acting Minister of Finance and Economic Planning of Ghana Kwadwo Baah Wiredu, the Minister pointed out that, as envisioned in the Strategic Plan developed by the Institute of Chartered Accountants of Ghana (ICAG), International Standards on Auditing were expected to be adopted in full by 2009. However, as of April 2009, there is no further publically available information as to progress towards achieving this goal.
General Overview
The legal framework for financial reporting and auditing requirements in Ghana for public and private companies is largely based on the Companies Code of 1963 (Act 179). As specified in this Act, annual accounts of both public and private companies must be audited by independent auditors, and the Ghana National Standards on Auditing (NSAs) are to be used for the purpose of auditing. The Securities and Exchange Commission Regulations of 2003, Securities Industry Law of 1993, Stock Exchange Act of 1971, Listing Regulations of 1990, Banking Law of 1989, Financial Institutions (Non-Banking) Law of 1993, and the Insurance Law of 1989 supplement the Companies Code in regulating financial reporting requirements for different types of companies.
In 2004, the World Bank conducted a review of accounting and auditing practices in Ghana in order to evaluate the weaknesses and strengths of the accounting and auditing requirements, and to review the reporting requirements against actual practices. This review involved the participation of representatives from the Ghanaian regulatory, supervisory, and industry bodies. International Financial Reporting Standards and International Standards on Auditing (ISAs) were used as the benchmarks for assessing national standards. The Report on the Observance of Standards and Codes published in June 2004 as a result of the assessment contained policy recommendations to improve the reporting framework in Ghana. As part of its recommendations for improvement of the statutory framework of accounting and auditing, the World Bank suggested the adoption of ISAs without any modifications. The World Bank noted that "although Ghana Accounting and Auditing Standards have been based on International Accounting Standards and International Standards on Auditing, respectively, they are outdated and gaps exist in comparison with the international equivalents" (p. 1). NSAs issued by the Institute of Chartered Accountants of Ghana (ICAG) became effective in 2001. However, the World Bank noted that NSAs need to be updated and revised in line with the current ISAs. Furthermore, the absence of implementation guidelines impedes application of NSAs locally. In a 2007 speech by then acting Minister of Finance and Economic Planning of Ghana Kwadwo Baah Wiredu, the Minister pointed out that, as envisioned in the Strategic Plan developed by the Institute of Chartered Accountants of Ghana (ICAG), International Standards on Auditing were expected to be adopted in full by 2009. However, as of April 2009, there is no further publically available information as to progress towards achieving this goal.
According to the description of the Ghanaian regulatory framework as detailed in the 2006 ICAG self-assessment, the Registrar-General has the legal authority to enforce compliance with the provisions of the Companies Code for listed and private companies. It also has the authority to use sanctions for non-compliance. However, the 2004 World Bank assessment noted that "the Registrar-General has no technical and logistical capacity to review financial statements with which to identify accounting and auditing violations" (p. 9). The securities market in Ghana is regulated by the Securities and Exchange Commission Ghana (SEC), which monitors compliance with financial reporting requirements. The Ghana Stock Exchange (GSE) ensures compliance with disclosure requirements. The SEC does not play a role in setting auditing standards. However, it does set additional requirements for listed companies. These requirements are called the International Securities Principles and Practices in the ICAG self-assessment of 2006. The World Bank noted that both the SEC and the GSE lack adequate capacity to monitor compliance with the financial reporting requirements.
The Bank of Ghana (BoG) monitors compliance with financial reporting requirements for banks and nonbanking financial institutions. In addition to the requirements specified by the Companies Code and the SEC, the entities regulated by the BoG must comply with the requirements specified in the Manual of Accounting and Manual of Auditing for Banks which, according to the 2004 World Bank assessment, is "outdated." The National Insurance Commission regulates the insurance companies, and the financial statements of insurers must comply with the requirements of the Insurance Law in addition to other requirements.
The ICAG is the national auditing standard-setter in Ghana, as mandated by the Chartered Accountants Act of 1963. The ICAG conducts qualifying examinations and acts as the licensing body for auditors. However, the World Bank assessment noted that the ICAG lacked resources and required further strengthening to improve its disciplinary practices and educational training in the field of accounting and auditing. ICAG also sets out requirements for professional codes of conduct and ethics to be observed by auditors. According to the 2007 ICAG self-assessment, the International Federation of Accountants (IFAC) Code of Ethics has been adopted without any modifications. The ICAG is listed as a member on the IFAC website.
The Principles
IIISA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 210 Agreeing the Terms of Audit Engagements (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 220 Quality Control for an Audit of Financial Statements (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 230 Audit Documentation (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements (effective 2009)
According to the 2004 World Bank assessment the equivalent Ghana standard needs to be updated in line with ISA 240.
IIISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 260 Communications of Audit Matters with Those Charged With Governance (effective 2009)
According to the 2004 World Bank assessment, no equivalent national standard exists in Ghana.
IIISA 300 Planning an Audit of Financial Statements (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 320 Materiality in Planning and Performing an Audit (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 402 Audit Considerations Relating to an Entity Using a Service Organization (effective 2009)
According to the 2004 World Bank assessment, no equivalent national standard exists in Ghana.
IIISA 500 Audit Evidence (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 501 Audit Evidence—Specific Considerations for Selected Items (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 505 External Confirmations (effective 2009)
According to the 2004 World Bank assessment, no equivalent national standard exists in Ghana.
IIISA 510 Initial Audit Engagements—Opening Balances (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 520 Analytical Procedures (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 530 Audit Sampling (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 540 Audit of Accounting Estimates (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 550 Related Parties (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 560 Subsequent Events (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 570 Going Concern (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 580 Written Representations (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 610 Using the Work of Internal Auditors (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 620 Using the Work of an Auditor’s Expert (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 700 Forming an Opinion and Reporting on Financial Statements (effective 2009)
According to the 2004 World Bank assessment the equivalent Ghana standard needs to be updated in line with ISA 700.
IIISA 705 Modifications to the Opinion in the Independent Auditor’s Report (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
NCISA 710 Comparative Information—Corresponding Figures and Comparative Financial Statements (effective 2009)
According to the 2004 World Bank assessment, no equivalent national standard exists in Ghana.
IIISA 720 The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
IIISA 800 Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (effective 2009)
There is insufficient information publicly available regarding Ghana's compliance with this principle.
