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VOLUME: X
FINANCIAL REPORTING
CHAPTER: 46:10
Part:IX Setting of Standards and Monitoring ss 5259
52.     Financial reporting standards

            (1) The Authority shall-

     (a)     adopt, issue, and keep up-to-date financial reporting standards for public interest entities, and ensure that they are consistent with the International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board; and

     (b)     issue appropriate interpretations and implementation guidelines to facilitate common adoption of standards by public interest entities.

            (2) The Authority shall specify in the financial reporting standards the minimum requirements for recognition, measurement, presentation and disclosure in annual financial statements, consolidated financial statements or other financial reports that every public interest entity shall comply with in the preparation of financial statements and reports.

            (3) The Authority shall adopt, issue and keep up-to-date a separate simplified financial reporting framework and standards for small and medium enterprises in conformity with international best practice.

            (4) The Authority may define in its rules certain micro enterprises that shall be exempt from the standards issued pursuant to subsection (3).

            (5) The Authority may, with the approval of the Minister, participate in cooperative arrangements with-

     (a)     qualified agencies of other governments, including their regulatory agencies;

     (b)     regional and subregional accountancy bodies; or

     (c)     international accountancy bodies, and other international institutions,

in the development of financial reporting, accounting and auditing standards to assist it in performing the functions described in subsections (1), (2) and (3).

53.     Auditing standards

            (1) The Authority shall adopt, issue and keep up-to-date auditing standards and ensure that they are consistent with international auditing, assurance and ethics pronouncements of the International Federation of Accountants.

            (2) The Authority shall adopt, issue and keep up-to-date separate auditing standards that conform to international practice best for certified auditors registered under the Accountants Act.

            (3) The Authority may issue rules and guidelines for the purpose of implementing the auditing standards adopted by it.

            (4) Every certified auditor for P.I.E shall, in the exercise of his or her profession, comply with-

     (a)     such minimum requirements as shall be specified by the Authority as minimum requirements for providing auditing and assurance services; and

     (b)     any rule, regulation, code or guideline issued under this Act.

            (5) Every certified auditor shall, in the exercise of his or her profession, comply with such minimum requirements as may be specified by the Authority in the separate auditing standards for certified auditors.

            (6) The Authority may, with the approval of the Minister, utilise the Institute to participate in cooperative arrangements with-

     (a)     qualified agencies of other governments, including their accountancy regulatory agencies; or

     (b)     regional and subregional accountancy bodies and other international accountancy bodies,

to assist it in performing the functions described in subsections (1), (2) and (3).

54.     Publication standards

            (1) Where the Authority intends to publish or amend any financial reporting standard or any auditing standard, it shall cause a notice to be published in-

     (a)     the Authority's website; and

     (a)     not less than two leading daily newspapers of national circulation, for three consecutive days, and shall invite comments from all interested persons.

            (2) A person who wishes to submit a comment shall, within 60 days of the last date of the publication specified in subsection (1), submit his or her comments in writing to the Authority.

            (3) The Authority may, in deciding whether to approve the standards or their amendments, have regard to any comment submitted under subsection (2).

55.     Compliance by public interest entities and others

            Where any public interest entity or other entity is required to prepare any financial statement or report under a particular enactment, it shall ensure that the financial statement or report is in compliance with the-

     (a)     financial reporting requirements of any other relevant enactment;

     (b)     financial reporting standards issued by the Authority under section 52;

     (c)     rules made under this Act; and

     (d)     codes, rules or regulations of the Authority with the ultimate objective of protecting the interest of the general public and investors.

56.     Monitoring of financial statements and reports

            (1) Where a public interest entity or other entity is required under any enactment to file its financial statements and reports with a Government department or authority, the Authority or any officer of the Authority may review the financial statements and reports of a public interest entity filed with the Government department or authority, to determine whether the financial statements and reports are in compliance with this Act;

            (2) The financial statements and reports of a public interest entity filed with the Botswana Unified Revenue Service shall be exempted from the right to review accorded in terms of subsection (1).

            (3) A Government department or authority referred to in subsection (1) may, at the request of the entity, for good cause shown, remove any confidential information or trade secrets from the financial statement or report filed with the Authority.

            (4) The Authority, or any officer authorised by it in writing, may seek further information or clarification from-

     (a)     any officer or director of a public interest entity;

     (b)     any employee of a public interest entity responsible for preparing the financial statements and reports; and

     (c)     any auditor or audit firm responsible for the audit of the financial statements of that public interest entity.

            (5) Where a public interest entity or other entity files any annual financial statement or report with any Government department or authority, the entity shall also file a copy of the financial statement and report with the Authority, in such manner as may be required in the rules.

            (6) The Authority may require the filing of the financial statement or report to be accompanied by such fees and such information as it deems fit.

            (7) The Authority may impose a fine not exceeding P20 000-

     (a)     for each failure of a public interest entity or other entity to file a copy of its financial statements and reports with the Authority;

     (b)     for each failure of a public interest entity to file with the Authority financial statements and reports that have been audited by a certified auditor of P.I.E or firm;

     (c)     on every officer who is responsible for the failure of a public interest entity or other entity to file a copy of its financial statements and reports for every day during which the default continues;

     (d)     on every officer who is responsible for the failure of a public interest entity to file financial statements and reports that have been audited by a certified auditor of P.I.E or firm; or

     (e)     for each wilful refusal of a public interest entity or other entity, its officers, employees or auditors, to provide further information or clarification in response to request pursuant to subsection (4).

            (8) If an officer, director, employee of a public interest entity, or an auditor of a public interest entity, without reasonable cause, conceals information or refuses to provide further information or clarification, he or she commits an offence and is liable to a fine not exceeding P100 000 or to imprisonment for a term not exceeding two years, or to both.

            (9) The Minister may, by notice published in the Gazette, exempt any public interest entity from the provisions of this section.

57.     Practice review of auditors

            (1) The Authority, or any officer, other accountancy regulatory agencies in other countries, regional and subregional accountancy bodies and other international accountancy bodies authorised by the Authority in writing, may review the practice of a certified auditor of P.I.E and, for that purpose, is authorised to-

     (a)     inspect any relevant book, audit working papers and files, document and record in the possession, or under the control of the certified auditor of P.I.E, his or her partner, employee or associated persons and make copies of or take any abstract of or extract from any such book, document and record; and

     (b)     seek information or clarification from any partner, employee or associated person of the certified auditor of P.I.E.

            (2) Subject to the provisions of subsection (3), every auditor, his or her partner, employee or associated persons shall, at the request of the Authority, or any officer authorised by it in writing, produce any relevant book, audit working papers and files, document or record in his or her possession or under his or her control for the purposes of subsection (1).

            (3) A certified auditor of a public interest entity, a partner, employee or associated person of such certified auditor who, without reasonable cause, conceals information or fails or refuses to produce any relevant book, document or record in his or her possession or under his or her control pursuant to a request made in accordance with subsection (2) commits an offence and is liable to a fine not exceeding P100 000 or to imprisonment for a term not exceeding two years, or to both.

58.     Power of investigation

            (1) The Authority, or any officer, accountancy regulatory agencies of other countries, regional and subregional accountancy bodies and other international accountancy bodies, authorised by the Authority in writing, may investigate or cause to be investigated on behalf of the Authority-

     (a)     any complaint of dishonest practice, negligence, professional misconduct, or malpractice made against a certified auditor of P.I.E or firm;

     (b)     any breach of the Code of Professional Conduct and Ethics by a certified auditor of P.I.E;

     (c)     any material irregularity notified to it pursuant to section 44; or

     (d)     any failure to provide reports or documents required by section 56.

            (2) Where the Authority investigates a complaint-

     (a)     it shall notify the auditor whose conduct, act or omission is under investigation, of the nature of the complaint;

     (b)     it may summon and hear the auditor, his or her partner, employee or associated persons;

     (c)     it may summon and hear witnesses;

     (d)     it may call for relevant documents and make such copies thereof as it thinks fit; and

     (e)     it may review any financial statement and report filed with any Government department or authority.

            (3) Every public interest entity, its officers or auditor, the partner or employee of the auditor or associated persons to such auditor shall, subject to the provisions of subsections (4) and (5), produce any relevant book, audit working papers or files, record or document in his or her possession or under his or her control to the Authority where the Authority is conducting an investigation for the purposes of subsection (1).

            (4) If an officer, director, employee of a public interest entity, or an auditor of a public interest entity without reasonable cause conceals information or fails or refuses to produce any relevant book, document or record in his or her possession or under his or her control pursuant to a request made in accordance with subsection (3), he or she commits an offence and is liable to a fine not exceeding P100 000 or to imprisonment for a term not exceeding two years, or to both.

            (5) A person may refuse to answer a question put to him or her, or refuse to furnish any information, document, record or book, where the answer to the question or the production of the document, record or book might tend to incriminate him.

            (6) Nothing in this section shall be taken to compel the production by the auditor, his or her partner, employee or associated persons, the public interest entity or its officers of any book, document, record or any other material containing-

     (a)     any information which is confidential under the Companies Act or any other law for the time being in force; and

     (b)     privileged communication by or to a legal practitioner in that capacity, except in so far as the disclosure of the information is made according to the law.

            (7) The Authority shall refer the findings of any investigation under subsection (1) to the enforcement committee for review and a recommendation of the appropriate sanction to be imposed.

59.     Sanctions of public interest and other entities, and their officers

            (1) Where the Authority reaches a final decision under sections 52 and 53, to the effect that a public interest entity or other entity has failed to comply with any financial reporting and auditing standard, code or guideline issued under this Act, and with such other financial reporting and auditing standards as may be specified under the relevant enactments, the Authority may either issue a warning to the entity or serve a notice on the entity for an immediate restatement of its financial statements or report, or do both.

            (2) Where a notice is served on a public interest or other entity under subsection (1), it shall, within 30 days of the service of the notice, restate its financial statements or reports and resubmit them to the Authority and to the Government department or authority.

            (3) Any public interest or other entity which fails to comply with the notice referred to in subsection (2) shall be liable to a fine not exceeding P50 000 imposed by the Authority, or the Authority may refer the matter to the relevant Government department or authority for appropriate action.

            (4) In the event that the Authority finds that an officer wilfully failed to comply with either subsection (1) or (2) or was responsible for a serious distortion of the public interest entity or other entity's financial statements or reports, the Authority may-

     (a)     impose a fine not exceeding P20 000 on that responsible officer;

     (b)     suspend or disqualify that responsible officer from serving in that capacity for that or any other public interest entity; and

     (c)     refer the matter to any other relevant Government department or agency for appropriate action.

            (5) Where the Authority finds that an officer of a public interest entity or other entity who wilfully failed to comply with either subsection (1) or (2) or was responsible for a serious distortion of the entity's financial statements or reports, is a certified auditor, it shall refer information about the contravention to the Institute for appropriate disciplinary action.

            (6) A person commits an offence and is liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding 10 years, or to both, if he or she knowingly and wilfully aids, abets, assists, incites or induces another person to prepare or issue an inaccurate or materially misleading financial statement or financial report.