Strengthening the Legal Framework for Accounting and Auditing in South Sudan
Project Development Objective (PDO)
The main objective of this project is to assist South Sudan’s Ministry of Finance and Economic Planning in developing accounting and auditing legislation. This legislation will establish the foundation necessary to develop accounting and auditing professions in South Sudan that align with international best practices.
South Sudan’s Companies Act of 2012 requires that all registered businesses present audited financial statements annually. These financial statements should be prepared according to both the International Financial Reporting Standards and the International Standards on Auditing. In addition, the revenue authorities in South Sudan require that all businesses include audited financial statements with their annual tax returns. These requirements, however, remain largely unfulfilled, simply because there are not enough qualified professional accountants and auditors in South Sudan. In addition, according to the supervisor of banks at the Bank of South Sudan, the foreign-based auditors of 20 commercial banks in South Sudan are not subject to any national regulations; therefore, inconsistent and inappropriate application of accounting and auditing standards poses serious risks to financial reporting. The absence of a professional accounting organization in South Sudan further intensifies this problem. South Sudan thus has a need for legislation that will help grow the country’s accounting and auditing professions.
Sudan’s Ministry of Finance and Economic Planning recognizes the country’s lack of consistent accounting standards, as well as its dearth of qualified accountants and auditors. The lack of a legal framework for accounting and auditing, as well as too few qualified professionals, hampers the quality of financial statements for both tax purposes and company records. The sustainability of the accounting and auditing professions in a country depends on the quality of the services provided by its members, as well as on the professions’ capacity to respond effectively and efficiently to a country’s economic and societal demands.
The accountancy and auditing professions in South Sudan are nascent and without quality standards for professional services. South Sudan thus needs to develop professional standards for accounting and auditing from the ground up. The first step will be to draft legislation to govern the accounting and auditing professions. Such a legal framework will seek to ensure that those individuals in the accounting and auditing professions have appropriate skills, attitudes, and ethics. In addition, such legislation will seek to ensure that practicing accountants and auditors provide high-quality professional services.
No legal framework for the accounting or auditing profession currently exists in South Sudan. As a result, no established standards govern how accounting professionals prepare financial statements or how auditors verify corporate financial reporting. Such a lack of standards results in a lack of proper financial accounting and in unreliable corporate financial reporting overall. Nor is there a baseline set of requirements for the audited financial statements that must be produced for tax-filing purposes.
Authorities in South Sudan are requesting assistance with drafting modern legislation that will enable in-country stakeholders to establish more robust accounting and auditing professions. The authorities in South Sudan have identified the following immediate needs for developing the accounting and auditing professions. These needs are in line with international best practices:
1. Developing legislation to bolster the accounting and auditing professions in South Sudan
2. Strengthening the education and training available to accountants and auditors at institutions of
3. Establishing a professional accounting organization in South Sudan, as well as ethics standards
The main activities of this project are as follows:
1. Taking stock of the existing legal framework and international best practices; recommending draft
legislation for accounting and auditing; supporting authorities in drafting the legislation
2. Holding a workshop for key stakeholders in South Sudan to discuss the draft legislation and
updates to other relevant laws and regulations
The expected outcomes of the project are as follows:
1. Developing the legal framework (including governance, operations arrangements, ethics
standards, and dissemination and enforcement of standards) to grow the accounting and
auditing professions in South Sudan
2. Creating an environment for the accounting and auditing professions that will enable higher-
quality financial accounting and thus more transparent and reliable corporate financial