Stricter Standards Unveiled for Public Auditors, Accounting Firms

Aug 3 , 2025


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The Accounting & Auditing Board of Ethiopia (AABE) has issued a new directive aimed at strengthening oversight and professional standards in the accounting and auditing sector. Grounded in the Financial Reporting Proclamation, the directive addresses long-standing regulatory gaps while preparing the sector for the country's emerging capital market. Key provisions introduce stricter licensing standards for public auditors, professionals permitted to audit public interest entities. Applicants must now demonstrate five years of continuous experience at a registered firm, hold at least one million Birr in capital, and secure occupational insurance coverage of three million Birr. The directive defines four licensing categories, accounting service, certified auditor, public auditor, and combined license each with clear scopes of service. Professionals are also required to complete a minimum of 40 hours of training annually. To boost consumer protection, the directive makes professional indemnity insurance mandatory across all categories. Institutions seeking accreditation, both local and foreign, must meet rigorous standards, with foreign associations restricted from owning more than 49pc of shares in Ethiopian entities. Officials say the regulation is a response to practical gaps seen under the previous framework and is part of broader reforms supporting the operationalisation of the capital market. It is expected to enhance investor confidence and improve the integrity of financial reporting in the country.


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