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Ohada Accounting Principles Pdf 23


OHADA Accounting Principles and Standards




OHADA is the acronym for the Organization for the Harmonization of Business Law in Africa, a regional organization that aims to promote legal and judicial integration and security in its 17 member states. One of the main achievements of OHADA is the adoption of nine uniform acts that cover various aspects of business law, such as commercial law, company law, insolvency law, arbitration law, and accounting law.


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This article will focus on the OHADA Uniform Act on Accounting Law and Financial Reporting (UAAFR), which was adopted by the Council of Ministers of OHADA on January 26, 2017 in Brazzaville (Congo) and published in the Official Gazette of the Organization on February 15, 2017. The UAAFR replaces the previous Uniform Act on the Organization and Harmonization of Companies Accounting (UAOHCA), which was adopted in 2000. The UAAFR aims to modernize and harmonize the accounting principles and standards in the OHADA zone, as well as to align them with the international best practices.


Scope and Objectives of the UAAFR




The UAAFR applies to all companies and entities that engage in economic activities based on repetitive acts, whether for profit or not, in the OHADA member states, with the exception of those subject to public accounting principles. The UAAFR defines the accounting system as a set of rules, methods, procedures, and conventions that govern the classification, recording, presentation, and reporting of financial information relating to the transactions and events affecting the assets, liabilities, equity, income, and expenses of a company or an entity.


The objectives of the UAAFR are to ensure that the accounting system meets the following requirements:


  • regularity: compliance with the applicable laws and regulations;



  • truthfulness: correspondence with the reality of the transactions and events;



  • transparency: clarity and completeness of the information disclosed;



  • reliability: accuracy and consistency of the information;



  • understanding: intelligibility and relevance of the information for the users;



  • comparability: possibility to compare the information over time and across entities.





Content and Structure of the UAAFR




The UAAFR consists of six titles that cover different aspects of accounting law and financial reporting:


  • Title I: Companies' personal accounts (natural persons and legal entities);



  • Title II: Consolidated accounts;



  • Title III: Combined accounts;



  • Title IV: Financial statements prepared in accordance with International Financial Reporting Standards (IFRS);



  • Title V: Accounting profession;



  • Title VI: Miscellaneous provisions.





The UAAFR also includes an appendix that contains the revised OHADA accounting system (SYSCOHADA), which comprises:


  • the OHADA general accounting plan (PCGOHADA), which defines the chart of accounts, the accounting entries, and the accounting documents;



  • the consolidated and combined accounting rules (RCCOHADA), which specify the methods and procedures for preparing consolidated and combined financial statements;



  • the sectoral accounting plans (PCSOHADA), which adapt the PCGOHADA to specific sectors or activities.





Implementation and Enforcement of the UAAFR




The UAAFR entered into force on January 1st, 2018 for personal accounts, and on January 1st, 2019 for consolidated accounts, combined accounts and financial statements prepared in accordance with IFRS. The UAAFR is directly applicable in all OHADA member states without any need for national transposition. The UAAFR is enforced by various authorities and bodies at different levels:


  • the Council of Ministers of OHADA, which adopts, amends, or repeals uniform acts;



  • the Permanent Secretariat of OHADA, which ensures the dissemination, promotion, implementation, monitoring, and evaluation of the uniform acts;



  • the Common Court of Justice and Arbitration (CCJA), which ensures the interpretation and application of the uniform acts and settles disputes arising from them;



  • the National Commissions of OHADA, which coordinate and facilitate the implementation of the uniform acts at the national level;



  • the Regional Accounting Councils (CRA), which supervise and regulate the accounting profession in each OHADA member state;



  • the Higher Council of Accounting (CSA), which harmonizes and develops the accounting standards and rules in the OHADA zone;



  • the Accounting Standards Board (ANC), which issues technical opinions and recommendations on accounting matters;



  • the auditors, who express an opinion on the compliance and reliability of the financial statements.





Benefits and Challenges of the UAAFR




The UAAFR is expected to bring significant benefits to the OHADA zone, such as :


  • enhancing the quality, comparability, and transparency of financial information;



  • facilitating the access to finance and investment for companies and entities;



  • improving the governance, management, and performance of companies and entities;



  • strengthening the credibility, professionalism, and ethics of the accounting profession;



  • fostering the integration, harmonization, and development of the regional market.





However, the UAAFR also faces some challenges and difficulties in its implementation and enforcement, such as :


  • the lack of awareness, understanding, and capacity of the stakeholders involved in accounting law and financial reporting;



  • the diversity and complexity of the accounting standards and rules applicable in different situations;



  • the scarcity and costliness of the human, material, and financial resources required for accounting law and financial reporting;



  • the resistance and reluctance of some companies and entities to adopt or comply with the new accounting law and financial reporting;



  • the inconsistency and inefficiency of the supervision and regulation mechanisms for accounting law and financial reporting.





Conclusion




The UAAFR is a major reform that aims to modernize and harmonize the accounting principles and standards in the OHADA zone, as well as to align them with the international best practices. The UAAFR is expected to bring significant benefits to the OHADA zone, such as enhancing the quality, comparability, and transparency of financial information; facilitating the access to finance and investment for companies and entities; improving the governance, management, and performance of companies and entities; strengthening the credibility, professionalism, and ethics of the accounting profession; fostering the integration, harmonization, and development of the regional market. However, the UAAFR also faces some challenges and difficulties in its implementation and enforcement, such as the lack of awareness, understanding, and capacity of the stakeholders involved in accounting law and financial reporting; the diversity and complexity of the accounting standards and rules applicable in different situations; the scarcity and costliness of the human, material, and financial resources required for accounting law and financial reporting; the resistance and reluctance of some companies and entities to adopt or comply with the new accounting law and financial reporting; the inconsistency and inefficiency of the supervision and regulation mechanisms for accounting law and financial reporting. Therefore, it is essential that all stakeholders work together to overcome these challenges and difficulties, as well as to seize the opportunities offered by the UAAFR.



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