NewsInsurer Reluctance in IFRS Adoption Draws Fire from Accounting Board, Again
Insurer Reluctance in IFRS Adoption Draws Fire from Accounting Board, Again
May 24, 2025
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The Accounting and Auditing Board of Ethiopia (AABE) cautions that insurers’ repeated failure to adopt International Financial Reporting Standards (IFRS) could lead to prosecution. Insurers argue the lack of qualified accountants in the country is preventing them from complying with IFRS— a problem repeated deadline extensions have not fixed.
None of the country’s private insurers have adopted IFRS, and the state-owned Ethiopian Insurance Corporation (EIC) remains the only firm to have done so, according to Abebe Shiferaw, director of communications for the Accounting and Auditing Board of Ethiopia (AABE).
The Board was established by a parliamentary decree a decade ago and is charged with overseeing Ethiopia’s switch over to IFRS, a globally used accounting style. The adoption is glacial, with only a tiny fraction of registered businesses in Ethiopia meeting the standard.
The insurance industry is no exception. It failed to meet the initial deadline in 2020 and a series of year-long extensions have done little to speed up the process.
Private insurers have also failed to prepare mandatory audit reports on time, prompting the Board to set a deadline in August 2025, which, Abebe says, they must meet or risk administrative, financial, and, potentially, criminal penalties under the provisions of the Financial Management Proclamation.
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Among the insurers who have yet to comply is Ethio Life and General Insurance Share Company, though that is not for a lack of trying, according to CEO Shimelis Gebregiorgis.
“It is true that a year has passed since we were supposed to implement IFRS 17. However, we were unable to adopt the system because the necessary technology and skilled professionals were unavailable in the country. For instance, in Kenya, you can easily find an IFRS expert, but that is not the case in Ethiopia. We would need to spend at least one million birr to bring one from abroad. We have discussed the issue with the Audit Board, and they have shown understanding. For now, we are working according to the mandatory audit quality guidelines and will submit our report to the AABE by August,” he said.
Ethio Life registered 734 million Birr in gross written premiums in 2023/24.
AABE reports it has conducted quality audits on a total of 73 entities over the past nine months, including special audits based on recommendations.
Abebe says the Board flagged 56 accounting firms for a range of violations, including failure to report address changes, being absent from their registered address, and professionals operating without a legal contract with their clients.