Accounting and Auditing Board takes enforcement action against audit firms

The Accounting and Auditing Board of Ethiopia (AABE) has referred three files to judicial authorities and taken disciplinary actions, including fines and license revocation, following a three-month quality review of 47 accounting and audit files. The crackdown, part of preparations for Ethiopia’s upcoming capital market, involved inspecting 21 financial reports and accepting over 1,500 statements. AABE Acting Director General Webeshet Tadele highlighted that the move aims to curb widespread malpractice where companies submit contradictory financial data to banks and tax authorities. Under new directives, banks must now verify that corporate financial statements are approved by the AABE before granting loans. Furthermore, the Board has introduced stricter licensing criteria and professional indemnity requirements for auditors, while collaborating with the Addis Ababa Revenue Bureau to investigate flawed taxpayer records.