Botswana Companies Act exempts companies with a turnover of less than P 10 million AND total assets employed of P 5 million from following International Financial Reporting Standards. All non-exempt companies - whether private or public, whether related through shareholding or unrelated, whether limited by shares or guarantee - should follow International Financial Reporting Standards. Well, this is the law.
Botswana Financial Reporting Act requires companies exceeding 2 out of the 4 thresholds - turnover of P 200 million, total assets of P 150 million, 200 employeess and liabilities of P 50 million - (called Public Interest Entities) to come under the oversight of Botswana Accountancy Oversight Authority in terms of complying with IFRS and observing minimum King 3 Corporate Governance Code. Minister is expected to annouce the commencement date anytime (This is June 2021 now) for this amendment that reduced thresholds, to become effective.
Therefore our observation is that non-exempt companies not coming under the oversight of BAOA do take accouting and audit as matters of compliance and not as matters of choice for growth and transformation. Even otherwise we are in mission to enlighten any business that takes accounting and audit as mere matters of legal compulsion. Accounting and audit are tools to grow and transform the business and society at large. Practically speaking non-exempt companies (those below the turnover threshold of P 10 million and total assets threshold of P 5 million in the previous year) and a sizeable number of non-exempt and non-Public Interest entities prepare entity-specific financial statements basically to comply with Botswana Taxation. Other forms of business organizations such as sole proprietors, partners, Trusts, etc. prepare entity specific financial statement while Unions, Societies and Cooperative Societies use GAAP that comply with the respective legislation. Auditors however insist on IFRS for audit purposes.
Sage 300 Accpac is predominently used by many parastatals and large companies. SYSPRO and Oracle are used by some large parastatals. Similarly SAP is used by some very large companies. SAP Business One is gaining popularity. Sage 200 Evolution, Quickbooks Online are mostly used accounting software products for mid-sized or growing businesses. They are not small businesses or typical family owned businesses using Sage 50 Pastel or Xero. More and more small businesses are learning to use cloud software. Large businesses use private cloud products.
Bachelors of Accounting is a popular course offered at the University of Botswana. Botswana Accountancy College (BAC, owned jointed by Botswana Institute of Chartered Accountants, Debswana and Government of Botswana) and private accountancy colleges like Botho University offer specialist Accounting degrees and coach students for ACCA and such other professional qualifications. ABM Univeristy College and BAC offers accounting programs of other universities in UK / USA. Association of Accounting Technicians is also one of the most preferred qualifications in Botswana.
Botswana Institute of Chartered Accountants (BICA) regulates the profession of accountancy in Botswana. All qualified auditors and qualified accountants in practice or in service are members of BICA. Botswana CA is a new qualification that is recently implemented by BICA based on partnership agreement with the Institute of Chartered Accountants of England and Wales. Botswana CAs are increasing in number which is good news. Those in practice or those in service currently are Chartered Accountants of other countries like South Africa, India, Zimbabwe, Sri Lanka, England, Scotland and Ireland or members of the Institute of Chartered Certified Accountants (ACCA-UK) or of the Institute of Chartered Management Accountants (ACMA-UK). ACCA and CIMA are very popular in Botswana. BICA offers Technician level status to graduate accountants or AATs with experience.
Botswana Accountancy Oversight Authority (BAOA) is Botswana's Financial Reporting Authority, an oversight body to regulate corporate financial reporting. BAOA has powers to certify, conduct practice reviews and discipline those who carry out audit of public interest entities, such as banks, insurance companies and other economically significant entities. Further BAOA has authority to require financial statements prepared by public interest entities for examination of compliance with IFRS standards. BAOA has adopted IFRS, IFRS for SMEs and BICA - GAAP as national standards for preparation of general purpose financial statements.
Government accounting system is expected to be on accrual basis soon.