Is this REALLY happening? I see divestment and RPF purchase at bargain basement prices, market manipulation and coersion to buy from RPF businesses: Rwanda is making considerable efforts to align its accounting and auditing practices with internationally accepted standards and codes. Corporate accounting and disclosure practices need to develop in line with a growing economy, as well as with international best practice. There are varying compliance gaps in both accounting and auditing practices. These gaps stem from inadequate understanding of ISAs and IFRS by professional accountants, inadequate technical capacities of the regulators, absence of implementation guidance, lack of independent oversight of the auditing profession, and shortcomings in professional education and training. The Institute of Certified Public Accountants of Rwanda (ICPAR) is at its infant stage. The law establishing the Institute (No. 11/2008 of 06/05/2008) became effective on August 1, 2008. The Minister of Finance and Economic Planning, as per provision of the Law, has appointed an interim Governing Council to launch operation of the Institute. 6. The contribution of the private sector to the economy and poverty alleviation remains limited; there are only about 400 enterprises in Rwanda, of which one-half have less than 50 employees. Private sector development remains hampered mainly by the high cost of infrastructure services and, to a lesser extent, by the weakness of the financial sector. 7. The institutional structure of a capital market in Rwanda is constrained in terms of types of institutions, financial instruments, and services. In view of the fact that conventional commercial banks (Bancor, Banque Commercicale du Rwanda, Banque de Kigali, Rwanda Development Bank, Cogebanque, Ecobank, and Finabank) dominate the financial scene, their services are limited to traditional loans and deposits, and foreign exchange transactions and transfers. Two financial institutions (Union des Banques Populaires du Rwanda and Rwanda Housing Bank) and more than 100 micro-finance institutions are the other players in the country’s financial sector. The insurance sector is equally thin with Société Rwandaise Dassurances (SORAS), Société Nationale des Assurances au Rwanda (SONARWA), and Compagnie Générale dAssurance et de Reassurance (COGEAR) being the key players. A Financial Sector Development Plan is being implemented at the present time, and it has been addressing these weaknesses in the financial sector. 8. In order for Rwanda to develop a competitive and efficient financial sector for the growth of a vibrant private sector, its financial system must be reasonably robust to earn investors’ confidence. Among other necessary attributes, a mechanism that ensures a high-quality financial reporting system is crucial in this respect. A strong financial reporting regime for corporate entities in both private and public sectors will benefit the Rwanda economy in various ways, including: Contributing to financial sector development through strengthening the country’s financial architecture and helping reduce the risk of financial crises and corporate failures, together with their associated negative economic impacts that have been witnessed in many industrialized and developing countries; Empowering local communities to own and manage their development process by broadening the financial system through strengthening microfinance institutions; Increasing foreign direct investment, which can be achieved through greater confidence in, and improved comparability of, financial information; Facilitating economic integration on an international level, through further alignment of Rwanda’s national standards and codes with those of its main trading partners; Improving access to financing for the small and medium enterprise sector by providing banks and other financial institutions with standardized, useful, and reliable information. 9. As Rwanda moves toward further liberalization and deregulation to further enhance their business environment, enhanced financial transparency and improved accounting and auditing practices are necessary. In this context, this ROSC sets out policy recommendations to enhance the quality of corporate financial reporting and foster a financial reporting platform conducive to sustainable private and financial sector growth, and to increase access to global financial markets. worldbank.org/ifa/RWANDA--ROSC--AA.pdf
Posted on: Tue, 16 Sep 2014 14:40:24 +0000
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