wajibu wa wakurugenzi kuandaa, kuzipitisha na kuzifaili hesabu za mwaka

1. The Role of Directors in the
Prepara3ons of Financial
Statements
(Presenta3on to NBAA Directors Training at APC Bunju – March 19, 2016)

2. Coverage (planned flow)
• Who is a Director?
• AFS: Source of Regula3on in Tanzania
• Fiduciary responsibili3es - revisi3ed
• Financial Numeracy Responsibility and skills
needed: CPA or no CPA
• Directors Du3es… including prepara3on of AFS
• Key areas of aVesta3ons

3. Who is a Director?
• A director, by whatever 3tle is a person
occupying the posi3on of a director and may
include Governors, Council members, Trustee,
…. etc.
• Execu3ve or Non Execu3ve Directors: Sits in
the Board as a member responsible for control
and direc3on.
• In our discussion we focus on Directors who
are board members.

4. BoVom line
• Directors are responsible for
the prepara3on, approval
and filing of company
accounts

5. AFS: Source of Regula3ons
In Tanzania, external financial reporting is
regulated by:
— Legislation – Company Act 2006 - compels
— Financial Reporting Standards (NBAA IAS
and IFRS); IPSAS – compels
— CMSA and DSE for listed companies, BOT for
Banks and Financial Ins3tu3ons,
— Other laws – Like: on Taxation - compels

6. Directors’ Fiduciary Responsibili3es -
Revisited
• To accept directorship….. is to
accept…. a responsibility of utmost
trust, faith and confidence to manage
and protect property or money wherein
one person has an obliga8on to act for
another's benefit

7. Specific responsibili3es…
to act within powers;
• to promote the success of the
company for the benefit of its
members as a whole;
• to exercise independent judgment;
• to exercise reasonable care, skill and
diligence;

8. Specific responsibili3es…
• to avoid conflicts of interest
• not to accept benefits from third
par3es; and
• to declare interest in proposed
transac3on or arrangement

9. Responsibili3es on financial numeracy
Directors responsibili3es is not limited
by a par3cular background knowledge
and experience.
One has to become familiar with the
business of his/her company and how
it is run, and ensure that it is being
properly run (by management).

10. You don’t need to be A CPA
equivalent. But….
• You must have an appropriate level of financial
knowledge to understand your company’s
business and how it is reflected in the financial
report, and apply your knowledge of transac3ons
and events to the financial report.
• Financial knowledge includes knowledge of
maVers such as:
• financial repor3ng,
• financial products or instruments,

11. You don’t need to be CPA ..but need
to be conversant with
• financial assessments for capital and funding
decisions,
• financial processes and controls, and
• how decisions can impact on the future financial
health of a company.
• The extent and areas of financial knowledge required
may vary depending upon the companies of which
you are a director and factors such as the industry
and the use of complex financial products

12. Responsibility to keep wriVen financial
records that:
• correctly record (Reliable) and
explain the company’s transac3ons
(comparability) and its financial
posi3on and performance (meaning),
and enable true and fair financial
statements to be prepared and
audited (IFRS compliant).

13. Responsibility to keep wriVen financial
records that:
Directors responsibility on AFS include:
• records are complete and accurate
• through the adop3on of appropriate
accoun3ng policies and;
• the design and implementa3on of
appropriate controls and processes.
• (This obliga8on exists regardless of who prepares them: whether
books and records are maintained in-house, outsourced to a third
party, or whether they are electronic or hard copy records)

14. Tanzania Companies Act, 2006

15. (4) Any person, being a Director of a company,
fails to take all reasonable steps to secure
compliance as respects any accounts laid before
the company in general mee3ng with the
provisions of this sec3on and with other
requirements of this Act a to the maVers to be
stated in the accounts, he shall, in respect of
each offence, be liable on convic3on to
imprisonment or to a fine
Compliance……

17. Approval
Approval
and
Signing of
the
Accounts
158 (1) A companies annual
accounts shall be approved by
the companies board of
Directors and signed on behalf
of the board of Directors of the
company

18. Failure to comply or recklessness

19. Directors’ report

20. Directors’ financial repor3ng obliga3ons -1
• Your company must lodge financial
statements: the reports must include a
directors’ aVesta3on/ statement of
responsibili3es that includes:
– whether, in the directors’ opinion, there are
reasonable grounds to believe that the company
will be able to pay its debts as and when they
become due

21. Directors’ financial repor3ng obliga3ons - 2
• whether the financial statements and notes
comply with accoun3ng standards, and give a
true and fair view of the financial posi3on and
performance of the company and any
consolidated en3ty, and
• whether the directors have been given the
declara3ons required by the chief execu3ve
officer (CEO) and chief financial officer (CFO).

22. The 3 Main AVesta3on
1. Directors’ responsibility statement
• The Board of Directors have prepared these
statements.
• The Board confirms to the best of its
knowledge:
– the consolidated financial statements, prepared in
accordance with IFRS and give a true and fair view
of the assets, liabili3es, financial posi3on and
profit or loss of the Group; and

23. Main AVesta3on
– the directors’ report includes a fair
review of the development and
performance of the business and
the posi3on of the Group together
with a descrip3on of the principal
risks and uncertain3es that it
faces.

24. Main AVesta3on
2. Disclosure of informa3on to auditor
• Having made the requisite enquiries, so far as the
directors are aware, there is no relevant audit
informa3on of which the Company’s auditor is
unaware and the directors have taken all the steps
they ought to have taken to make themselves aware
of any relevant audit informa3on and to establish
that the Company’s auditor is aware of that
informa3on.

25. Main AVesta3on
3. Going concern
• Ajer reviewing the Group’s and Company’s budget for the
next financial year, and other longer term plans, the directors
are sa3sfied that, at the 3me of approving the financial
statements, it is appropriate to adopt the going concern basis
in preparing the financial statements. [Further detail is
included within liquidity and capital resources on pages 48 to
51 and notes 21 and 22 to the consolidated financial
statements which include disclosure in rela3on to the Group’s
objec3ves, policies and processes for managing its capital; its
financial risk management objec3ves; details ]

26. The role of the Audit CommiVee
• Lets discuss !!

27. main role and responsibili3es of the
audit commiVee
They include:
• to monitor the integrity of the financial
statements of the company and any formal
announcements rela3ng to the company’s
financial performance,
• reviewing significant financial repor3ng
judgments contained in them; internal
financial controls and, and risk management
systems;

28. main role and responsibili3es of the audit
commiVee
• to monitor and review the effec3veness
of the company’s internal audit func3on;
• to make recommenda3ons to the board,
for it to be put to the shareholders at the
AGM on the appointment of the external
auditor

29. main role and responsibili3es of the audit
commiVee
• the remunera3on and terms of engagement
of the external auditor;
• to review and monitor the external auditor’s
independence and objec3vity and the
• effec3veness of the audit process, taking
into considera3on relevant professional and
regulatory requirements;
• to develop and implement policy on the
engagement of the external auditor to
supply non audit services.

30. main role and responsibili3es of the audit
commiVee
• services, taking into account relevant
ethical guidance regarding the provision
of non-audit services by the external
audit firm;

31. main role and responsibili3es of the audit
commiVee
• and to report to the board, iden3fying
any maVers in respect of which it
considers that ac3on or improvement is
needed, and making recommenda3ons
as to the steps to be taken; and
• to report to the board on how it has
discharged its responsibili3es.

32. Discussions, Q & A

33. Thank you