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Standards Committee of the Egyptian Society of Accountants and Auditors completes the amendments to the Egyptian Accounting Standards

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• Dr. Omran: Standardizing accounting policies and procedures for companies to provide greater disclosure and transparency for financial statements’ users
• A new Egyptian Accounting Standard for leasing contracts in accordance with Financial Leasing and Factoring Law no. 176 of 2018
• Signing a protocol of cooperation between FRA and the Egyptian Society of Accountants and Auditors (ESAA)

Dr. Mohammed Omran – FRA’s  Chairman revealed that in accordance with a ministerial decree  no. 909 of 2011,  Standards Committee of the Egyptian Society of Accountants and Auditors has completed the amendment to the Egyptian accounting standards to comply with the international standards currently in force.  A decision by the competent Minister will be issued to start applying the new amendment pursuant to Law no. 159 of 1981. In addition, a committee comprising a group of accounting and auditing experts shall be formed to answer any queries related to the amendments to the Egyptian accounting standards that may be received from companies issuing the financial statements or from auditors.

FRA’s Chairman emphasized the amendments to the Egyptian Accounting Standards aim at establishing the principles that companies must abide by in order to provide appropriate information to financial statements’ users. He added that these standards will achieve integrity and accuracy upon presenting financial statements that is through standardizing accounting policies and procedures for companies in order to provide more disclosure and transparency to financial statements’ users and enabling them to take economic and financial decisions on sound basis.  Moreover, these amendments represent a step to overcome a major obstacle hindering the competitiveness of the Egyptian market in attracting foreign investments. Also, it prepares the Egyptian economy to enter the scope of work of major companies.

Dr. Omran added that the amendments issued by the Committee have introduced three Accounting Standards represented in the Egyptian Accounting Standard no. (47) for financial instruments and  in accordance with IFRS 9. In addition to, the Egyptian Accounting Standard no.48 regarding revenue from contracts with customers pursuant to the International Financial Reporting Standard ( IFRS ) no. 15 to replace  the Egyptian Accounting Standard no.11 related to revenue and standard no. 8 related to construction contracts. Finally, the most recent of which is the Egyptian Accounting Standard no. (49) for leasing contracts pursuant to Financial Leasing and Factoring Law no. 176 of 2018 issued in August 2018 to replace the Egyptian Accounting Standard no. (20) related to financial leasing.

Dr. Omran asserted that the standards related to the new standards have been amended and the Committee issued an Egyptian accounting interpretation (Public Service Privileges Arrangements) which deals with joint projects between the government and the private sector.  In addition, the Authority added paragraphs related to the fair value model within standard no. 34 on real estate investment, noting that using this model shall be limited to real estate investment funds only.

FRA’s Chairman pointed out that in order to complete the amendments – quickly- meetings were intensified and a sub-group of accounting and auditing experts was formed in the Authority and the Egyptian Society of Accountants and Auditors to prepare a six-month guide for applying  the Financial Instruments Standard no. 47 prepared in accordance with International Financial Reporting Standard no. 9. In parallel, another working group was formed by the Egyptian Society of Accountants and Auditors to prepare the draft standards which was reviewed by the Authority and consisted of 502 pages.

Each Accounting Standard includes the objective of its issuances, the scope of its application, its details, implementation guidelines and the date of entry into force.

On the sidelines of meetings held with the Egyptian Society of Accountants and Auditors,   FRA signed a protocol of cooperation with the Egyptian Society of Accountants and Auditors. The protocol aims at raising the scientific and practical level of FRA’s employees to enhance inspection and supervision over non-banking financial companies subjected to FRA’s supervision with a level equivalent to practicing accounting and auditing internationally. 

Mr. Hazem Hassan – Chairman of Egyptian Society of Accountants and Auditors (ESAA) emphasized that this protocol is an embodiment of the continuous cooperation between FRA and ESAA. He added that the protocol shows FRA’s belief in ESAA’s professional role in raising the profession of accounting and auditing in Egypt. In addition, ESSA’s Chairman asserted that ESSA will contribute in raising the efficiency of FRA’s employees.

 On the other hand, the protocol allows benefiting from the services offered by ESSA, that is through participating in training courses and programs and conferences organized by ESSA. Besides, exchanging of experiences, discussing all matters related to accounting, auditing, and reviewing scientific researches and studies.

It is worth mentioning that the Standards Committee of the Egyptian Society of Accountants and Auditors was formed by a ministerial decree no. 909 of 2011. The Committee is under the Chairmanship of FRA’s Chairman and the membership of the Executive Chairman of the General Authority for Investment and Free Zones (GAFI) or his delegate, a representative of the Central Auditing Organization chosen of CAO’s Head, Chairman of the Egyptian Society of Accountants and Auditors (ESAA), Chairman of Free Accounting and Auditing profession in the Syndicate of Commercial Professions and an accounting expert.
 

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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