Small and Medium enterprises (SMEs) and Non Governmental Organisations (NGOs) have been urged to implement the International Financial Reporting Standards (IFRS) specifically designed to improve accountability by producing respected financial reports.
The IFRS for SMEs were issued in July 2009 by the International Accounting Standards Board (IASB), based in London, United Kingdom for professional accountants to follow similar principles and interpretations to develop fairer financial statements.
The CEO of the Institute of Public Certified Accountants of Rwanda (ICPAR), Evans Mulera, said that over 99 per cent of private entities around the world are mandated to use the standard.
“Rwandan private companies need to adopt IFRS for SMEs to produce quality reports which improve their access to capital and also helps them to easily compare with the rest of the world,” Mulera said.
He said that although Rwanda has a shortage of professional accountants, ICPAR endeavours to sensitise and educate private companies on how to use the IFRS to produce quality reports.
“We at the institute are ensuring that Rwanda has a critical mass of local professional accountants who can ensure that their clients produce good quality reports that can be used even at the international level,” he said.
“We are preparing a local syllabus for Certified Public Accountants to be launched by March next year to ensure that many Rwandans enroll in the accounting profession. This in the long run will foster a knowledge based economy, which is one the pillars of Vision 2020.”
Damas Butera, a Project Accountant at Heifer International Rwanda, said that the IFRS for SMEs is easy to adopt and employs generally acceptable principles of accounting.
“It has helped us to conform to modern reporting standards and with it, we find that if offers greater financial transparency,” he said.
Ambrose Nzamalu, an accounting lecturer and audit practitioner, said that emerging markets in the developing world are keen on modernising their practices in order to promote their products on the international market.
“There is strong evidence that the accounting quality positively affects investment efficiency for SMEs. By adopting the IFRS version for SMEs, businesses will improve transparency, and reduce financing constraints of reporting that arise from the local generally acceptable principles of accounting,” he said.