Accountant Magazine by Arnold Njuki

A s u p p l e m e n t o f t h e A c c o u n ta n t J o u r n a l

A P RI L - JUNE 2017

ISSUE N O. 0 0 4

I S S N N O 0856 - 2636

OOKH L W NE AUNC

E U S S I

RE-L

Life in

economic recession and investment opportunities

Audit of IT

APPLICATION CONTROLS

A Chat with

Mr. Ludovick

UTOUH Retired cag of the urt

The need for financial

literacy in Tanzania

training on financial reporting

EFFECTIVE MANAGEMENT OF A

TRAINING CENTER

APC

Conference and Hotel Bunju-Dar Es Salaam

Inside 18

A word with Ludovick Utouh

Effective Management of a Training Center

Life in Economic recession

Audit of IT controls: application controls

Minister for Finance and Planning Dr. Phillip Mpango cuts the ribbon to open APC Conference & Hotel-Bunju, DSM

Contents The articles in the magazine do not necessarily reflect the official views of the National Board of Accounts and Auditors, or any other particular institute or organisation

The need for financial literacy in Tanzania

Life in economic recession and investment opportunities

Interview with Mr. Ludovick UTOUH

Audit of it controls: Application controls

Effective Management of a training center

Tel: +255 22 22 111890/9 Fax: +255 22 2151746 Email: info@nbaa.go.tz

NBAA grants exemption of Bachelor degree in public sector

The Editorial Board welcomes contributions in the form of articles, adverts, news etc. for the Accountant Magazine. The Board reserves the right to reject, edit or shorten any article presented for publication.

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quarter of 2017

Technical and advisory department Conducts training on financial reporting

Finance Feature

The need for financial literacy in Tanzania Juma Buhimila Mabula

A sense of public urgency over the level of financial literacy in the population is, we believe, a reaction to a changing economic climate in which individuals now shoulder greater personal responsibility to face increasingly complicated financial products.(Hastings, Madrian, & Skimmyhorn, 2012)

inancial literacy theme has awakened a higher interest in the world. With the changing business trends in regional and global economic integration has come up with new ways and new products that are poured in the financial market demanding consumers to possess relevant financial knowledge and skills for effective participation. In low income countries like Tanzania financial outreach is much more limited and more sophisticated consumer products are typically accessible only to small percentage of the population.(Xu & Zia, 2012). Financial consumers do not fully comprehend the financial products available to them they end up either not using them at all or signing up out of necessity for products for which they do not know their rights. Most people know what a loan and a bank are, but 40% of people do not know what a savings account or SACCO is, and 70% do

not know what interest on savings means(TheWordBank, 2013) According to (Massele J, Darroux C, Jonathan H, & Xu, 2013) only about 200,000 individuals and corporations in Tanzania participate in the financial market in a country of over 40million people (about 0.5%) of the population, borrowing and default rate is still very higher among individuals and businesses. A high rate of new venture failure and ignorance into household financial matter decisions concerning financial planning, borrowing, and retirement issues all these evidence the need to have deliberate effort to increase the level of financial literacy of the citizens. (Xu & Zia, 2012) contends that only 11% of the surveyed individuals in Tanzania use formal financial products, 27% have never heard of saving account, 35% had never heard of interest on savings and 25% has never heard of insurance.

April / June 2017

<<Finance Feature

The need for financial literacy in Tanzania F

sense of public urgency over the level of financial literacy in the population is, we believe, a reaction to a changing economic climate in which individuals now shoulder

greater personal responsibility to face increasingly complicated financial products. (Hastings, Madrian, & Skimmyhorn, 2012) There are number of initiatives which

ranging from governmental and private organizations and international bilateral agencies has embarked into raising awareness on the importance of financial literacy. Although there has been a progress in light of the general literacy there still big challenges facing individuals as to the financial literacy which is the basis of many daily decisions being undertaken by individuals, household and businesses. Therefore this paper focuses at defining personal financial literacy and firm financial literacy, it highlights the importance of financial literacy to individuals as well as to businesses and to give more insight on the issues concerning financial literacy at stake to the country. Personal Financial literacy defined Personal financial literacy defined as â&#x20AC;&#x2DC;the ability to read, analyze, manage and communicate about personal financial conditions that affect material well-being. It include the ability to discern financial choices, discuss money and financial issues without (or despite) discomfort, plan for the future and respond competently to life events that affect every day financial decisions, including events in the general economy(Vitt et al., 2000). Jump$tart Coalition defines financial literacy as â&#x20AC;&#x153;the ability to use knowledge and skills to manage oneâ&#x20AC;&#x2122;s financial resources effectively for lifetime financial security. (Jump$tart, 2007) Considering that there is a lack of standardized definition of financial literacy, has taken a variety of operationalization in academic literature. It sometimes referred to knowledge of financial products, knowledge of financial concepts and having the computation skills and numeracy necessary for effective financial decisions making, and being engaged in certain activities such as financial planning.(Hastings et al., 2012; Lusardi, 2012). Financial literacy for SMEs The banking association of South Africa defines financial literacy for Small and medium enterprises as the one which has: firstly, managers with adequate level of

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personal entrepreneurial competencies, personal finance skills, and business management skills and has appropriate level of understanding of functional financial management systems., secondly has appropriate understanding of SME life cycles, funding and other financial services needs and options and knows where and how to source and negotiate those funding and service requirements. Thirdly, has understanding and can manage financial risks or seek relevant advice to manage such risks. Fourthly, understand legal, regulators and tax issues as they relate to financial matters. Lastly, understand the range of legal re-courses it can resort to when necessary, and namely, in case of bankruptcy or other situations of financial distress. The lack of knowledge of financial management contributes to the low prevalence of new venture creation, and ultimately the high failure rate of SMEs, as most entrepreneurs are intimidated by financial management.(Wise, 2013) Importance of Financial Literacy for Individuals and Business In everyday life consumers are confronted with financial decisions, equipping them with the right knowledge and skills could have a very important impact in their personal decisions. Consistency with the notion of financial literacy matters for financial optimization, a sizeable and growing literature has established a correlation between financial literacy and several different financial behaviors and outcomes.(Hastings et al., 2012). (Hilgert, Hogarth, & Beverly, 2003) contend that there is a strong relationship between financial knowledge and the likelihood of engaging in a number of financial practices like, paying bills on time, tracking expenses, budgeting, paying credit card bills in full each month, saving out of each paycheck, maintaining an emergency fund, diversifying investments, and setting financial goals. And there are many other studies which has proved that financial literacy is significantly positively correlated to with

Budget Need s Wan ts Savings Entertaim net Shares Scho ol Fees Trave l

planning for retirement, saving and wealth accumulation(Lusardi & Mitchell, 2011; Stango & Zinman, 2008; Van Rooij, Lusardi, & Alessie, 2011). In endeavor to promote entrepreneurship performance is a multiplicative function of motivation times entrepreneurial skills and business skills. Entrepreneurial skills include creativity, innovation, risk-taking and the ability to interpret successful entrepreneurial role models and identification of opportunities. Business skills include being able to formulate business plans, and financial marketing, operational, human resources, legal, communication and management skills. (Ladzani & Van Vuuren, 2002). All these skills are connected to financial literacy. (KotzĂŠ & Smit, 2008) contend that lack of personal financial literacy by the business owners impacts negatively on the financial management of new ventures and can lead to possible failure of SMEs. and (Sucuahi, 2013) posit that the important role assumed by micro enterprises can be well harnessed and sustained through a fine and precise financial management of the entrepreneurs themselves.

(Hilgert, Hogarth, & Beverly, 2003) contend that there is a strong relationship between financial knowledge and the likelihood of engaging in a number of financial practices like, paying bills on time, tracking expenses, budgeting, paying credit card bills in full each month, saving out of each paycheck, maintaining an emergency fund, diversifying investments, and setting financial goals.

Various Initiatives There are various initiatives that range from international organization,

April / June 2017

<< Finance Feature

The need for financial literacy in Tanzania governmental and private firms all participates either directly or indirectly in the raising the level of financial literacy. For instance we have Tanzania consumer advocacy society which offer guide to financial literacy and credit information sharing, Credit reporting and financial literacy: A pilot project in Tanzania which had an objectives to assess the level of financial literacy of Tanzania consumers who are likely to be credit active. Of recent as reported by the business times news the Bank of Tanzania (BoT) discerning the need for financial literacy has launched a national financial education framework to address financial literacy and consumer protection challenges(Kitundu, 2016). Financial institutions like commercial banks, Microfinances, and insurance companies they also play their role on educating consumers to become effective consumers of their products. By doing so they impart financial knowledge and skills. Schools, colleges and universities they have their part to play on imparting financial knowledge and skills to the consumers. As formal training institutions they offer general training to young scholars who are icons in the society. These scholars are always sought for financial advice by normal citizens in the society. (Jamie, 2015) found that financial education has a positive impact on short-term and long term financial behavior. The question is our institutions recognizing the high need of improving financial education? Do we have a strategy on making sure that our school syllabuses integrate effective financial literacy training?. What should be done? Besides of the various endeavors there is a lot need to be done with regard to financial literacy in Tanzania. A call for scientific research in personal finance and consumer financial knowledge. One reviewing financial literacy studies in our country besides what has been done by international organizations like Fine$cope there is a dearth of research activities in Tanzania compared to financial literacy studies done in other countries like South Africa, Kenya, Ghana and Nigeria. Scholars should apply lessons from behavioral economics and social marketing to financial literacy to maximize the results and ability of consumers to receive information. There is a need to come up with customized training and financial literacy initiatives different from what has been done a lot in developed world. (Holzmann, 2010) contends that, in low income and

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There is a need to come up with customized training and financial literacy initiatives different from what has been done a lot in developed world. (Holzmann, 2010) contends that, in low income and middle income countries they show a number of common and idiosyncratic countries that will have influence on financial behavior different from that of high income countries with regard to measurement of financial capability and effectiveness of financial education and alternative intervention.

middle income countries they show a number of common and idiosyncratic countries that will have influence on financial behavior different from that of high income countries with regard to measurement of financial capability and effectiveness of financial education and alternative intervention. The service provider and the regulators have a role to play in effort of improving consumer financial literacy, as the financial market advance and new products are created in the market should go hand in hand with provision of education and awareness to consumers. With the financial education framework launched by the BOT is should not be a political acumen instead be implemented and should aim at integrating various initiatives and sensitize tangible results from various participants in educating consumers. The government should work hand in hand with international partners and bodies like World Bank and Fine$cope, which conducts researches on financial inclusion and education. The results should be communicated and appropriate measures to implement strategies to combat the low level of financial literacy in our country. We need to promote exchange of information on financial literacy between public and private sectors and across institutions such as international donors, bilateral developments agencies, NGOs and financial institutions. Within the formal training institutions we need to come up with financial literacy national standard at each level, so that every scholar embarked into such a formal training be able to acquire a standardized level of financial training. Conclusion In everything we do today it is either directly or indirectly connected to financial issues, the current globalized business environment, the high pace of changes in the financial markets, and the turbulence of the business environment individuals and businesses are confronted to have better insight on financial matters for effective financial decisions. Besides the implementations of various initiatives Tanzania still faces lot of institutional challenges to offer compelling financial awareness to citizens. More effort partnering with the international and bilateral development agencies, much can be achieved.

References Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2012). Financial literacy, financial education and economic outcomes. Retrieved from

MANAGEMENT: THE POTENTIAL RELATIONSHIP WITH NEW VENTURE CREATION. The Southern African Journal of Entrepreneurship and Small Business Management, 1, 35-50.

Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Fed. Res. Bull., 89, 309.

Ladzani, W. M., & Van Vuuren, J. J. (2002). Entrepreneurship training for emerging SMEs in South Africa. Journal of Small Business Management, 40(2), 154.

Holzmann, R. (2010). of LaborBringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend.

Lusardi, A. (2012). Numeracy, financial literacy, and financial decision-making. Retrieved from

Jamie, W. (2015). An analysis of the effects of financial education on financial literacy and financial behaviors. (PhD), University of Nebraska, Lincoln. (50) Jump$tart. (2007). National standards in K-12 Personal Finance Education. Washington DC.

Lusardi, A., & Mitchell, O. S. (2011). Financial literacy and retirement planning in the United States. Journal of Pension Economics and Finance, 10(04), 509-525. Massele J, Darroux C, Jonathan H, & Xu, F. (2013). Challenges faced by Dae es Salaam Stock exchange market in Tanzania. Research Journal of Finance and Accounting, 4(15).

Kitundu, T. (2016, 27, february). Tanzania Central Bank partners on financial literacy. Business Week.

Stango, V., & Zinman, J. (2008). The price is not right (not even on average): Exponential growth bias, present-biased perceptions and household finance. Retrieved from

KotzĂŠ, L., & Smit, A. (2008). # 3-PERSONAL FINANCIAL LITERACY AND PERSONAL DEBT

Sucuahi, W. T. (2013). Determinants of financial

literacy of micro entrepreneurs in Davao City. International Journal of Accounting Research, 1(1), 44-51. TheWordBank. (2013). Tanzania, Diagnostic Review of Consumer Protection and Financial Literacy. Washington, DC: world bank. Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472. Vitt, L. A., Anderson, C., Kent, J., Lyter, D. M., Siegenthaler, J. K., & Ward, J. (2000). Personal finance and the rush to competence: Financial literacy education in the US Washington. DC: Fannie Mae Foundation. Wise, S. (2013). The impact of financial literacy on new venture survival. International Journal of Business and Management, 8(23), 30. Xu, L., & Zia, B. (2012). Financial literacy around the world: an overview of the evidence with practical suggestions for the way forward. World Bank Policy Research Working Paper(6107).

April / June 2017

SPECIALrePORT

Life in

economic recession

& investment opportunities The government is one of the major purchasers, so when there is over austerity in its expenditures, it reduces the volume of money in the would-be circulation and thereby adversely affecting growth of some economic sectors. 1.0 Introduction ince the 5th phase government in TANZANIA stepped in power, the media are poisoning our minds leading to the public outcry of the type “tough times ahead as government unveils more spending cuts cum decision to move funds to the central bank”. Going back to school in my classrooms at Minaki High School and then the University in Dar es Salaam and Liverpool, my recollection in economics all point out the detail that describe an ongoing national liquidity crisis and cash crunch to mean a RECESSION!1 It is common knowledge that one of the most notable hallmarks of a recession is the scarcity of funds. Recession has a tendency of lowering prices of items and real assets to levels that may deter further investments. In other words, it tends to create more properties on the market than there are buyers willing to buy. A major question to ask is what types of investment opportunities are appropriate during a recession period? The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

S BY Balozi Morwa (PhD)1 1

Dr. Balozi Morwa

is a freelance economist having worked extensively in a number of high reputable public Institutions at varied times since 1996 when he graduated his bachelor degree in economics at the University of dar Dar salaam. Twenty-years later, he obtained his PhD from the same University. He is reachable at +255 754 851 901 and bmorwa@ yahoo.com

2.0 Economics at Work In regards to financial liquidity, Circulating rumors: “the government is one of the major purchasers, 1

Depression (worse than a recession).

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so when there is over austerity in its expenditures, it reduces the volume of money in the would-be circulation and thereby adversely affecting growth of some economic sectors”. The fact is that; these are simply prudent economic management measures from austerity economics actions view point that put emphasis on cost-cutting measures on unnecessary spending (not salaries), strict tax collection measures, re-directing much spending to capital or development projects than recurrent expenditure. Though it dried up most of our disposable incomes, such cut costs and increase revenue measures are simply good for the economy in attempting to bring spending into line with revenue and thereby reduce budget dependence to external or

SPECIALrePORT >>

donor finance! It is noteworthy to understand that much of these capital expenditure are payments made to suppliers outside the country. Thus, the money leaves our pockets at the expense of financing infrastructural projects such as roads, energy, aircrafts, etc. whose benefits (spillover paybacks) to entire economy are expected to bounce back at some points in the future. It is simply a postponement of our current consumption for future benefits of entire economy. RECESSION is a litmus test for people have to know how to think and correctly work in order to get rewarded in future. To commercial

banks, an ongoing austerity economic actions by government provide them with a clear lesson to mobilize own money from private sector rather than keep relying on government funds. 3.0 Investment Opportunities As recession continues to take its toll on the national economy, the country tends to witness a massive crash in the price of items, real sector property, stocks and shares in the market. It is common knowledge that one of the most notable hallmarks of a recession is the scarcity of funds. Recession tends to worsen the fluctuation in the value of the

domestic currency against the Dollar/Pounds. This fluctuation made it difficult for some people to consider the possibility of investing in any long investment at this time. Even those who are willing to invest are faced with the burden of finding investment opportunities in markets that offer the greatest long term growth and stability. In Tanzania today, the prices of properties are dropping rapidly as a result of the ongoing national liquidity crisis and cash crunch. In some areas such as car sale, house rent and land, the prices of property have fallen to the point where the problem of affordability is gradually becoming a thing of the past. At April / June 2017

<<SPECIALrePORT

Life in economic recession& investment opportunities the moment, there are several developments scattered around the country that have been left uncompleted, as well as new construction projects that are either abandoned and, where completed, left unoccupied. In fact, a number of properties that have been used as securities for mortgage facilities have been foreclosed as a result of the inability of the mortgagors to fulfil their obligations under their respective loan agreements. EXPECTEDLY, more properties are projected to be on the market than there are buyers willing to buy. In view of the above, investors may do well to consider taking advantage of the cheaper property prices, and the abundant array of great deals to be found from motivated sellers, distressed sales, foreclosed properties amongst other incentives, to increase their assets portfolio. As other investors are obliged to sell their assets, this is an opportunity for

Whilst it is noted that the scarcity of funds may pose a challenge in this regard, there are several financial strategies that potential investors may consider. For instance, investors can form partnerships or incorporate companies wherein they can pool resources which can then be used to acquire developed properties or even large expanse of land that can thereafter be divided into plots and allocated to the partners/ members.

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potential investors to step in and pick them up for a fraction of their real value. Investors can also leverage on the fact that sellers are willing to grant significant discounts and consider offers or terms that they would ordinarily not consider, including reasonable deposits and payment in instalments. Property owners on the other hand may consider taking advantage of the market by either refinancing their own properties for lower rates and better terms until the market rebounds, instead of leaving same vacant and generating no income at all. Furthermore, the current economic situation presents an opportunity for TANZANIAN in DIASPORA to invest in the real estate sector by acquiring more properties back home. This is especially so in view of the prevailing exchange rate of the Shilling and Dollar/Pounds which puts them at a great advantage.

3.1 Why Real Estate and not Other Investment? Of the various advantages of real estate investment, its key benefit abounds in the fact that real estate investment is relatively stable and possesses the ability to absorb inflation. It is one of the only investments that rarely loses its value, and even where that is the case, real estate investment always has the potential to bounce back within a relatively short time. It is worthy of note however that the recession will not last forever, as the market will soon restore its lost value. Whilst it is noted that the scarcity of funds may pose a challenge in this regard, there are several financial strategies that potential investors may consider. For instance, investors can form partnerships or incorporate companies wherein they can pool resources which can then be used to acquire developed

SPECIALrePORT >>

properties or even large expanse of land that can thereafter be divided into plots and allocated to the partners/members. Finally, it is important for investors in real estate in TANZANIA to engage the services of SOLICITORS (lawyers, advocates, attorneys other legal representative) for the purpose of conducting the requisite DUE DILIGENCE on the property. This is particularly so in light of the fact that a lot of properties that are up for sale are encumbered in one way or the other such as litigation, mortgage facilities, lack of authority to sell, etc- a fact reflected in the widespread practices of land disputes and land conflicts in most Municipalities and the number of civil cases on mortgaged landed properties filed in the high court in the country. Investors are therefore advised to ensure that all necessary searches and/ or confirmations are completed prior to

purchase, and a solicitor is in a better position to assist in the said confirmations. The reason this is crucial is because an investor who acquires an encumbered property may be faced with several challenges that may arise in the property and he may not be able to take possession of the property as result of the encumbrance. 3.2 Other Assets It is a natural understanding to an investor who feels comfortable owning that, where volatility is increasing and uncertainty prevails, it’s important to own assets that can hold up in bad times. There are other asset classes that tend to either hold steady in a downturn or rise when markets suffer. While history can’t predict what will happen in the future, several assets have historically performed well in times of crisis -and appear to be leading the pack again. Government bonds do well in bad times and have always been considered a riskoff asset or safe-haven assets. There’s little likelihood of default. Precious metals such as Gold is looked at in the same way as bondsas a safe-haven asset where one’s money can be protected. That’s because gold is a physical asset that can be bought and sold around the world. Money- actual physical dollars-is considered an asset class and one that barely budges during a crisis. A dollar is a dollar in good times and bad. What that means is that in most periods it always outperforms our local currency (Shillings) and so is the case in a down market. Stay diversified- What all of this means is that an investor has to diversify and own a portfolio that includes more than just stocks and bonds. Investors should hold between 10 percent and 20 percent of their assets in alternatives. Finally, maximize your contributions to your pension or other retirement account. These contributions have the potential to grow dramatically during recovery and earn you more. 4.0 Conclusion Money are there, it all depends on how people were pocketing the money during the previous government regimes. In this (5th) regime, people have to know how to work in order to get rewarded. This is more

In Tanzania today, the prices of properties are dropping rapidly as a result of the ongoing national liquidity crisis and cash crunch. In some areas such as car sale, house rent and land, the prices of property have fallen to the point where the problem of affordability is gradually becoming a thing of the past.

of a ‘business as usual’ syndrome rested in our minds for quite long periods. It requires mindset change and equally change in our attitude towards work, our financial education (i.e. how to manage money), our personal brands and building strong relationships that will last through the recession2. As a social analysts, I in view that, without first change our mindset and attitude towards work, then we will be busy in eradicating the appearance of POVERTY rather than the ROOTS of it. Households and businesses need tightening their belts to make every penny count amidst an ongoing austerity economics actions by government. Of the various advantages of real estate investment as expounded above, it is thus safe to say that, with the current low investment in the real estate sector, which has seen housing activities dropping at rapid, this may be the perfect time to invest in real estate.

2 Relationships are more valuable than money because they can help you in a number of ways. The key is figuring out who you want to be extra close with and being honest with yourself as to who you think will actually take care of you and become your “safe haven.”

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irst and foremost may I take this opportunity to congratulate you for retiring from public service peacefully with great and very impressive achievements. It is not an easy task to reach at that stage. Now, can you tell us something about your life after retirement?

First of all, I thank the Accountant Magazine for congratulating me for my successful retirement from public service effective from the 19th September 2014. Specifically now to your question on my life after retirement, the amazing thing about my retirement is that I have found myself busier than before my retirement. When I retired I thought I will have all the time to relax and enjoy the things I had no time for example reading of novels, listening to good music etc. I have been

Mr. Ludovick

UTOUH 12

April / June 2017

a small scale farmer throughout my working life but with retirement I doubled my appetite for this economic activity perhaps resulting from the scare of the difficulties of retirees of this country which is a result of low salaries which automatically translates into unrealistic pension benefits. Apart from the agro business engagements I am involved in, I am busy writing books on among other things my experience as Controller and Auditor General on how as a country we have pushed the agenda of accountability and good governance in this country. After some four months of peaceful retirement I am now receiving many requests from both local and regional seminar/conference organizers to make presentations in their events. I have registered a company limited by guarantee known as WAJIBU – Institute of Public Accountability which I am seeing acting as the citizens mouthpiece in as far as issues of accountability and good governance are concerned in this country. Throughout my working life I have been doing my social responsibility in a small way serving my fellow countrymen especially those from my district Rombo in which I have been involved in all aspects of development of that district. With my retirement I believe I will have more time to contribute towards the development of Rombo District. So there goes my life after retirement. All I can say with much confidence is that yes I am retired BUT take it from me, I am not tired yet. We understand that the Office of CAG was not known to the majority of Tanzanians nor was it popular to any segment of the country’s economy before you assumed the office. What strategies did you undertake to make the office known and popular both locally and internationally? Your observation is very true that the office was not known at all locally and internationally as a result of which it could not have been popular if in the first place it was not known at all in any circle . On the 14th October 2006, the Office organized a welcoming party for me in which occasion the guest of honour was the then retired Chief Secretary Hon. Phillemon Luhanjo. In the guest of honour’s speech among the many challenges he gave to me was the fact that I was assuming a position which was not known at all to any Tanzanians and therefore it was my prime responsibility to rectify the situation. This was a big challenge to me and therefore I had to come up with strategies to address it. Before thinking of the solution to the problem I had first of all to know the causes of the problem. I found out that the causes of the problem the office found itself in were many and were multifaceted. The office was

Throughout my working life I have been doing my social responsibility in a small way serving my fellow countrymen especially those from my district Rombo in which I have been involved in all aspects of development of that district. With my retirement I believe I will have more time to contribute towards the development of Rombo District. So there goes my life after retirement. very underfunded, understaffed, was using old and very outdated audit systems and methodologies and was lacking a strong and visionary leadership. Having identified the root causes of the problem we started the process of modernizing the office including the preparation of operational manuals like the Regularity Audit Manual, adoption of modern audit methods and systems like using the risk based audit approach and the use of international auditing standards and technology in the audit process. We insubstantially improved our audit reports by issuing them timely and , making them more user friendly . We got the Public Audit Act No 11 of 2008 enacted together with the Audit Regulations of 2009 legislated for the first time in the history of the Office life. The outcome of which was a substantial enhancement of the office’s independence. We embarked on a massive recruitment of staff and their capacity building in our traditional and non- traditional audit areas hence substantially being able to expand the audit scope. We got the Government and donors to assist in the acquisition and construction of office buildings and were able to move the bulk of our auditors from auditee premises which was against best practice and eventually were able to abolish the very confusing post within the office organization structure of Resident Auditor changing it to Chief External Auditor (CEA) post. With an increased office budget, we were able to substantially improve the office infrastructure including the acquisition of office vehicles, computers and laptops. We got ourselves fully engaged in regional and international professional activities including assuming leadership roles in these organizations. We got ourselves actively involved in auditing regional as well as international organizations the likes of EAC, SADC and the UN. We came up with staff motivational schemes like the Audit Savings and Credit Society, NAOT Staff Revolving Fund and NAOT Mfuko wa Kusaidiana. These schemes have greatly contributed in stabilizing the Office staff turnover. All the above and other activities undertaken at the office in my eight years as Controller and Auditor General contributed in making the office very well-known both locally and internationally.

You had been a CAG for eight years. We understand that were many challenges you encountered when executing your responsibilities as a CAG. Can you please tell us some of those challenges and how you dealt with them. The CAG post is a difficult and unpopular one and therefore will have very many challenges. The biggest challenge I faced as CAG was meeting the expectations of the very many stakeholders of the CAG. These includes the NAOT staff, the Executive arm of the Government, the Parliament through its oversight committees, the Judiciary, the Donor Community, the Media, CSO/NGOs and the general public. The CAG is sandwiched among the many stakeholders above who have varied expectations from him. To successfully being able to meet this challenge is really a test of ingenuity. High public relations from the office leadership can play wonders in mitigating this challenge. The proper use of the media can also substantially assist in this regard .The other critical challenge I faced as CAG was the timeliness and quality of the audit reports being issued by the office. Were the audit opinions being issued reflecting the true situation of the auditee’s performance? This is a continuous challenge and I think the office should continue addressing it through continuous training. INTOSAI, AFROSAI, AFROSAI – E and UN Resolution strongly advocate for the independence of the Supreme Audit Institutions like the National Audit Office When it comes to the independence of the Office and similar oversight institutions in the country it still remains a big challenge. WE were able to move the Office’s standing within the AFROSAI – E’s Institutional Capacity Building Framework from Level 1 in 2004 to Level 3 in 2013. The office has a set target of moving further to Level 4 of the AFROSAI – E’s ICBF come 2018 for which I wish it success in that fulfillment. The above are just some of the challenges I faced as CAG, as I said earlier they are many which can not all be covered in this interview.

April / June 2017

ONE ON ONE

What do you comment on the independence of the office of the CAG with regard to the whole issue of good governance practices? On the issue of the independence of the office I already touched on it in item3 above. The office being a member of INTOSAI, AFROSAI and AFROSAI – E and the country being a bonafide member of the United Nations we are required to assess the independence of the office from the requirements of these organizations. I have to say that in spite of the fact that the office is a constitutional office and has the Public Audit Act No 11 of 2008 in place, the office has still not met the stipulated requirements of independence. Currently, the office staff are stiil defacto civil servants which is against best practice and is not in conformity with the requirements of INTOSAI and UN. Furthermore, the Office is still faced with a challenge of financial independence in the sense that it is not receiving all the appropriated funds as approved by Parliament. This is a real threat to the Office’s ability to execute its professional duties as expected. Without enhancing the independence of the Office to meet the requirements of INTOSAI, AFROSAI, AFROSAI – E and UN it will be very difficult for the office to realize its target of achieving Level 4 of the AFROSAI-E’s ICBF. 5 As outgoing CAG, you might be proud that there are legacies you have left behind. Can you mention a few of them? The issue is not that I might but I am in actual fact very proud of the very many legacies I have left behind after my eight years of serving the Tanzanian public as their Controller and Auditor General. I will just mention a few of those legacies as modernizing and expansion of the audit scope, joining of the UN Board of Audit, being chairman of AFROSAI WGEA and AFROSAI – E, construction of the very impressive NAOT headquarters in Dodoma and numerous NAOT Regional Offices, winning twice the SNAO’s Best Performance Audit Report of the year award, my being awarded by the President of the United Republic of Tanzania on the 9th December 2012 and being voted by TUCTA as the National best employee of the year in May 2013. Also in June 2013 the office participated in that years these are among some few legacies among the many I am very proud of. One of the challenges that are facing the accounting profession is an issue of lack of integrity which has led to such malpractices like embezzlement of public funds, bribery and corruption. What is your advice to the accounting practices towards integrity Members of the profession are bound to adhere and uphold the profession’s code of ethics and conduct. Furthermore if these members are employed in the public sector they will also be

April / June 2017

I will just mention a few of those legacies as modernizing and expansion of the audit scope, joining of the UN Board of Audit, being chairman of AFROSAI WGEA and AFROSAI – E, construction of the very impressive NAOT headquarters in Dodoma and numerous NAOT Regional Offices, winning twice the SNAO’s Best Performance Audit Report of the year award, my being awarded by the President of the United Republic of Tanzania on the 9th December 2012 and being voted by TUCTA as the National best employee of the year in May 2013. bound to observe the Civil Service Code of Ethics and Conduct. In spite of these codes of ethics, it is still a fact of life that these professional members are operating in a very corruptive society. These problem is affecting all professional in the country and hence we need a well-coordinated national approach in fighting corruption and other vices among the country’s professionals. The public should be educated on their rights when seeking professional services and should be encouraged to report on any malpractices. The professional regularity bodies should be more vigilant in dealing with any reported malpractices of their professional members. Any disciplinary action taken against any member of the profession should widely be publicized. How does the Office of the CAG relate to other organs that are responsible in promoting good governance in the country such as the judiciary, parliament, PCCB, human rights commission etc? In my eight years as Controller and Auditor General I tried very hard to forge a very close working relationship with all the other state and non-state organs responsible in promoting accountability and good governance in the country. Resulting from that resolve and on the personal advice of the President Dr. Jakaya Mrisho Kikwete, Section 27 of the Public Audit Act No 11 of 2008 was amended to make it mandatory for the CAG to immediately pass over to the law enforcing agencies of the

country any information coming to his attention in the course of his conducting his audits involving fraud, theft, malfeasance and corruption. With the amendment of the NAOT law, the office has been passing over all such documents and this has very much strengthened the working relationship between the office and these other agencies. The public honours your hard work as the former CAG. Since God has given you energy and strength to continue serving the public in other capacities, can you tell us your expectations in the future to continue to serve the public? I am indeed very happy with how the Tanzanian public has acknowledged my contribution of enhancing accountability and good governance in the country. It is that acknowledgement and recognition of my services to the nation which has given me encouragement and hope to want to continue serving my country in other equally crucial areas. It is in this regard that I have decided to form an organization called WAJIBU – Institute of Public Accountability whose main aim is to foster an environment that supports and promotes pblic accountability and good governance in Tanzania. The vision of the Institute is, “creating and sustaining an accountable society believing in accountability and good governance’, while the mission is, ‘to develop into a think tank that provides value added services

ANNOUNCEMENT TO NBAA EXAMINATION CANDIDATES:

ONE ON ONE

in fostering accountability and good governance in the country’’. In addition to this service since my retirement in September 2014, I have been invited to SAI’s of Burkina Faso, Cameroun and Malawi to make professional presentations in addition to involving myself as a resource person in training programs being run by the Tanzania Global Learning Agency. I am also involved in writing books which I hope will result in contributing to improved accountability and good governance in the country. Therefore even after my retirement it is obvious I am not short of activities to keep me relatively busy. You had been the NBAA Executive Director for more than ten years before you were appointed CAG. What kind of advice can you give to NBAA as its former CEO? Yes it is true that I was the first Executive Director of NBAA for 11 years before I left the position to Mr. Pius Maneno our current Executive Director. Before giving any advice to NBAA I would like to take this opportunity to extend my sincere congratulations to Mr. Maneno and his entire staff for the wonderful job done by the team in regulating the accountancy profession in the country. My specific commendation is on the great efforts exerted in successfully constructing the beautiful Accountancy Professional Centre (APC) at Bunju Kinondoni District in Dar es Salaam. My only advice to NBAA is that perhaps it is right time now to establish specialized professional courses to be pursued by the many CPA graduates these could be on systems analysis, financial markets, forensic accounting/auditing etc. Such programs will enrich the accountancy professionals and make them more marketable in the labour market local and internationally. I would also like to advise NBAA to explore the possibility of introducing acronym for the members of the profession as it is with other professions like Doctors (Dr), Engineers (Eng) etc. By doing so I believe it will contribute in raising the profile and status of the accountancy profession and the individual members of the profession.

CHANGES IN THE EXAMINATION REGISTRATION AND PROCEDURES We would like to inform our Esteemed Examination Candidates on the following:I: CANDIDACY AND EXAMINATION REGISTRATION From 1st July 2017 prospective examination candidates will be allowed to submit Candidacy Registration Forms and Examination Entry Forms altogether. Prospective candidates may decide to submit them separately but this should be done within the prescribed registration period. II: REGISTRATION PERIODS Registration period for new candidates (Candidacy Registration) and Examination Registration have been streamlined to be in the same period. Registration periods for both Candidacy Registration and Examination Entry Registration are as follows: CLOSING DATE FOR CANDIDACY AND EXAMINATION REGISTRATION MAY EXAMINATION SESSION

NOVEMBER EXAMINATION SESSION

15TH February

15TH August

Penalty Fee For Late Submission of Candidacy and Examination Entry Applications after Closing Dates below: MODE OF PAYMENT

MAY EXAMINATIONS NOVEMBER EXAMINATIONS

Payment with 50% penalty

16th February - 28th February

16th August - 30th August

Payment with 100% penalty

1st March – 15th March

1st September - 15th September

What do you wish to see the new CAG office accomplishing? It is my wish and prayer that the Office successfully completes the United Nations audit in June 2018. The office has been making steady progress in modernizing the audit function which I hope seeing being continued. After being elevated to Level 3 of the AFROSAI – E ICBF, the office has set a target of moving to Level 4 by 2018. During my tenure as CAG we managed to acquire a 24.5 acres of land at Gezaulole in Kigamboni Temeke District in Dar es Salaam for the purpose of constructing the National Audit Office Training Centre to be used for the country’s needs and for AFROSAI – E membership. I left drawings for the complex and negotiations with the Government had already been concluded whereby the project had Government’s approval. I am very much looking forward to the completion of this important project as NBAA did for the Accountancy Professional Centre in Bunju which I left after the beginning of phase 1 of the construction way back in 2006.

NB: No Application for examination entry shall be accepted after 16th March or September. III: PROVISION OF LEARNING MATERIALS From 1st July 2017, learning materials will be posted directly to the Candidate’s Postal Address. In this case, a candidate is required to write the correct and appropriate address in the Examination Entry Form in order to avoid unnecessary inconveniences. For any query or clarification, contact the undersigned EXECUTIVE DIRECTOR The National Board of Accountants and Auditors, Mhasibu House Bibi Titi Mohamed Street, P.O. Box 5128, DAR ES SALAAM Email: info@nbaa-tz.org Fax: +255 222151746, Tel: +255 22 2211890/9 April / June 2017

Audit of IT controls: APPLICATION CONTROLS

In the modern world, most if not all business processes depend on IT for instance accounting, payments, payroll processes etc. Indeed, every auditor is required to possess certain level of IT Controls audit skills to continue to be relevant. Cornely Levi Kilatu (CPA (T), CISA

Contacts: cornelykilatu@gmail.com, 0712452291

Introduction: nternal controls within the Information Technology are some of the most important internal controls in the modern business world because of the increased reliance upon automated data processing and information systems throughout the organization. In the modern world, most if not all business processes depend on IT for instance accounting, payments, payroll processes etc. Indeed, every auditor is required to possess certain level of IT Controls audit skills to continue to be relevant. Even reliance of financial information from IT systems such as accounting software like Enterprise Resources Planning (ERP), SAP, Navision etc depend on the effectiveness of IT controls

April / June 2017

IT controls helps to ensure Confidentiality, integrity and availability (CIA) of data and systems which process both critical and noncritical transactions CIA of information and data can be referred as follows: Confidentiality- Measures undertaken to prevent disclosure of sensitive information from reaching the unauthorized/unintended personnel. Integrity- maintaining the consistency and accuracy data and avoiding any unauthorized modification or alteration of data processed or stored. Availability- measures to ensure that the information concerned is readily accessible to the authorized viewer at all times. Therefore the reliance of accounting data

is as relevant as the effectiveness of controls on IT systems including accounting systems. Generally, IT controls can be classified as IT General controls and Application controls This article will focus on Application controlsand covers: â&#x20AC;˘ Meaning of application controls â&#x20AC;˘ Examples of application controls â&#x20AC;˘ Audit tests that can be performed on application controls 1.1. Meaning of application controls Application of controls are controls that pertain to the scope of individual business process or system and include controls within an application around input and processing and output functions in business systems.

B’se application or systems differs, application controls are specific to certain Application or system and they are not uniform as it is the case for IT general controls. Application controls are implemented to warrant that: • Inputs to the systems are validated • Processing of transactions are accurately • Outputs are accurately Take examples of business process and ideal system: • Finance - i.e. AB system • Procurement - i.e. CD system • Production - i.e. EF system 1.2. Why application controls are important? Objectives of application are to ensure that; • Input data are accurate, complete, correct and authorized i.e. customer details for loan, account etc • Data are processed as intended in an acceptable period of time. i.e. interest calculation • Data stored are accurate and complete i.e. our database records • Ensure the internal processing produces the expected results • Ensure the processing accomplishes the desired tasks • Outputs from business processes are accurate and complete. i.e. various reports • A record is maintained to track the process of data from input to storage and to the eventual output. 1.3. Examples of Application controls may include: • Finance manager override for payment transaction exceeding 3 million • Data Validation Controls, including: o Control totals – a control that automatically check if the total of all the invoices, such as the gross value. The invoices are input, the system aggregates the total of the individual input invoices’ value and this is

compared to the total gross amount. This helps to ensure completeness and accuracy of input.

system will reject the invoice. This helps to ensure accuracy of input. o Existence checks - the system is set up so that certain key data must be entered, such as supplier name, otherwise the invoice is rejected. This helps to ensure accuracy of input.

o Review of output to expected value - an independent assessment is made of the value of purchase invoices to be input, this is the expected value. The invoices are input and the total value of invoices is compared to the expected value. This helps to ensure completeness of input.

o Document counts - the number of invoices to be input are counted, the invoices are then entered one by one, at the end the number of invoices input is checked against the document count. This helps to ensure completeness of input. Other input application controls include:

o Check digits - this control helps to reduce the risk of transposition errors. Mathematical calculations are performed by the system on a particular data field, such as supplier number, a mathematical formula is run by the system, this checks that the data entered into the system is accurate. This helps to ensure accuracy of input. o Range checks - a pre-determined maximum is input into the system for gross invoice value, for example, $10,000; when invoices are input if the amount keyed in is incorrectly entered as being above $10,000, the

o Sequence checks o Validity check o Reasonableness check o Duplicate check • Edit tests controls • Control totals/batch balancing • Exception handling i.e. for reporting 1.4 Auditing application controls The following are the audit steps to be used during application controls review:

Area of application controls

Audit tests

Data checks and validation

• Observe attempt to input incorrect data and check effectiveness of validation. • Determine potential point of control override • Verify that the application owner ensure that all data are authorized prior to input.

Automated authorization, approval and override

• Conduct test based on user access rights • Test access privileges for each sensitive function or transaction • Review access rights that set and amend configurable approval and authorization limits

Automated functionality and calculations (processing of transactions)

• Compare input values and output values for all scenarios by walkthrough and re-performance. • Verify that a mechanism in place for notifying process owner when transactions have been rejected or errors have occurred. • Review table maintenance controls and determine who can change edits and tolerance levels • Verify that rejected items are re-processed appropriately in a timely manner in accordance with the procedures, and errors are corrected before reentering in the systems. • Test sample of listing transactions to validate appropriateness of aging processing • Review handling of exception reports

April / June 2017

SPECIALrePORT

Mr. Goodhope Mkaro MBA (Finance), B.COM Acc (Hons), PGD in Tax Management, CPB, CISI (UK), CPA (T). Covenant Financial Consultants

EFFECTIVE MANAGEMENT OF A

TRAINING CENTER Introduction

lthough the meaning of effective management of a training centre might be subjective,here are some principles that may generally be taken to mean how to effectively incharge the same.

Here are some tips that may assist to effectively manage the training centre.

Principle No.

Develop the Geese Leadership Style

Trainers should have empathy and understanding just as good as gees do. You should stand for each other no matter the circumstances.

· Geese are unique birds that possess a strong sense of leadership skills.They behave in such a way that, the Lead GOOSE flies where the flock decides.They will always fly in a “V” formation as the clip shows.

Lesson from the Goose

Similarly the lead GOOSE does what he wishes its flock to do implying a two ways traffic system. When the lead GOOSE gets tired, a new GOOSE flies to the front of the line to lead the flock. Being aleader is NOT the same thing as being “the boss”.

Encourage every trainer to decide for the team even at critical

Lesson

circumtances. This encourages a sense of oneness.

April / June 2017

SPECIALrePORT >>

Principle No.

Test Before you Trust Someone to be Part of theTeam

· ·

The better you are at managing your battles in life, the wiser and more responsible you become. It is advised that new trainers in the team should be encouraged to learn from their seniors for them to acquire the same spirit.

Lesson from an Eagle

Principle No.

Have the Sense of Sharing the Task as a Team

· · ·

For the team to be effective, you must test the commitment of new recruits before you trust them with your time and resources. You should also remember that, trust is a result of a series of time and test just as an eagle does. People who share a sense of community can help each other get where they are going more easily because they are travelling on the trust of one another. Trust is like a glass hence whenever it is broken it cannot be repaired.

Principle No.

Prepare a Good Succession Plan

Lesson from the Goose · · ·

Lesson from anEagle · ·

When the lead goose tires, it drops back into the formation and another goose flies to the point position. As trainers in a team, it really pays to take turns doing the hard tasks. We should respect and protect unique arrangement of skills, talents and resources. Every trainer should be able to at least teach two subjects to make sharing effective

The male and female eagles take the baby eagle to a mountain top at high altitude to prepare it for the challenge of flying at great heights. When the baby eagle is released, the free fall at first is frightening but the mother eagle soon come to the rescue and the process is repeated again until the baby eagle can fly alone.

April / June 2017

<<SPECIALrePORT

Principle No.

Encourage Those Up Front to Keep Up With Their Speed

Principle No.

Respect the Values of Others Trainers should have empathy and understanding just as good as gees do. You should stand for each other no matter the circumstances. · Trainers should love and respect one another as students consider them astheir leaders · We should also remember that are our ambassadors hence we them a genuine our students should show respect. · As a matter of fact, people know when you respect them and when you don’t, so don’t fake it. · People don’t care how much you know, until they know how much you care.

Lesson from Goose · The geese flying in formation honk to encourage those up front to keep up with their speed. · As trainers we need to make sure our honking is encouraging. · In teams where there is encouragement, result is much greater. · Individual empowerment results from quality honking. · It therefore generally sound better if trainers encourage each other to move with the same team spirit all the time.

Conclusion · Individual talents, as impressive as it may be,will only be multiplied when that person joins forces with others · Using the team work principle over and over again will not only lift your mood but help you to develop commitment to peak performance within yourself and within your team. · No matter how good someone is, yet each person has a special gift from God, of one kind or another, as such team work blends all the talents together for the great army.

The size of your success is not determined by the size of your brain but thesize of your faith. May God bless you all.

April / June 2017

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EVENTS IN PICTURES

NBAA grants exemption of Bachelor DEGREE IN PUBLIC SECTOR ACCOUNTING AND FINANCE OF TIA

The Board congratulate the TIA management for making tireless efforts to secure this exemption and argue to students to make use of this exemption in due time.

Mr. Edwin Mtoi,Principal Learning Resources Coordinator from NBAA and his colleague Emmanuel Makala and Humphrey Sympholian along with TIA Academic Staff of Accounting Department after conducting discussion on the exemption of Bachelor Degree in Public Sector Accounting and Finance.

April / June 2017

he National Board of Accountants and Auditors (NBAA) has granted exemption to the Bachelor degree in Public Sector Accounting and Finance offered by Tanzania Institute of Accountancy (TIA). The graduates from this program are exempted Accounting Technician Level I, II and Foundation stage and will be eligible to join intermediate stage of Board’s examinations.

the Board made this decision after making a thorough assessment and evaluation the program, teaching staff, library and teaching environment. However, this exemption will be valid to holder of Bachelor Degree in Public Sector Accounting and Finance who will register for Board’s examinations within five (5) years after their graduation.

EVENTS IN PICTURES >>

National Board of Accountants and Auditors has the role of creating awareness as well as promoting the accounting profession.

Tanzania Institute of Accountancy (TIA) students listening attentively when NBAA representative clarifying about the Exemption on Bachelor degree in Public Sector Accounting and Finance.

ational Board of Accountants and Auditors has the role of creating awareness as well as promoting the accounting profession. In making sure that, its functions and new developments are known to students who are the prospective candidates for future examinations; the acts as a guardian of accountancy associations, attending carrier days, accounting days and conducting regulatory visit to higher learning institutions and secondary schools.

Mr. Fidel Mfuruki, NBAA Public Relations Officer, the President of Institute of Internal Auditors, Tanzania Women Accountants representative and Director of Cornerstone Financial Consultants together with leaders of Accounting Association of Dar es salaam University (AADU) among others, during the Accounting Day held at University of Dar es salaam Business School (November 2016).

April / June 2017

EVENTS IN PICTURES

Invited guests and students listening to presentation on services offered by the NBAA during the Accounting day held at University of Dar es salaam Business School (UDBS) in November 2016.

Mr. Ibrahim Magambo, NBAAâ&#x20AC;&#x2122;S Students Liaison Officer officially launching the Accounting and Finance Association of Tanzania Institute of Accountancy-Dar es salaam.(January 2017)

Miss Rebecca Siame,The Students Liaison Officer at the National Board of Accountants and Auditors (NBAA) explaining issues to Students of Mabibo Secondary School-Dar es salaam during the visit of accountancy awareness creation in February 2017.

April / June 2017

The Students Liaison Officer from National Board of Accountants and Auditors (NBAA) explaining issues to students of META Secondary SchoolMbeya during the visit of awareness creation about NBAA in 2016.

Mr.Peter Lyimo,The Manager of Education and Training Service at National Board of Accountants and Auditors(NBAA) explaining issues of Boardâ&#x20AC;&#x2122;s examination to lecturers and accounting students of Archbishop Mihayo University of Tabora (AMUCTA) in February 2017.

The Manager of Education and Training Service from National Board of Accountants and Auditors(NBAA) explaining about the accounting profession to students of Kazima Secondary SchoolTabora in February 2017.

The Students Liaison Officer from National Board of Accountants and Auditors (NBAA) explaining issues to students of Tabora Boys Secondary School-Mbeya during the visit of awareness creation about NBAA in February 2017.

Students of Tabora Girls Secondary School-Tabora listening to NBAA officials during visit at their school in February 2017.

April / June 2017

EVENTS IN PICTURES

A cross- section of NBAA Diploma in IPSAS students sitting for final exams held in February 2017.

NBAA staff listening to the NBAA Executive Director, Mr. Pius Maneno during the opening of staff data verification, HCMIS Issues, Pre-Budget Preparation and General Training held at Mzumbe Morogoro from 3rd to 5th February 2017.

Minister for Finance and Planning Dr. Phillip Mpango cuts the ribbon to inaugurate Accountancy Profession Centre (APC) Bunju, Dar es salaam. The centre offers quality services/facilities such as conference facilities, hotel facilities and other services like outdoor ceremonies venue (wedding, send off, graduation etc). On his right, is the NBAA Board chair Prof. Isaya Jairo and GEPF Board Chairperson Mrs Joyce M. Shaidi. On his left is Interconsult representative Mr. Benno Matata.

5 6

April / June 2017

NBAA staff Mr Humphrey Simpholian second right and Mr. Peter Lyimo first right, giving a lecture to Kazima Secondary school students about

Some of NBAA staff listening to a resource person Mr. Fidel Mfuluki during staff data verification, HCMIS Issues, Pre-Budget Preparation and General Training held at Mzumbe Morogoro from 3rd to 5th February 2017. NBAA and itsâ&#x20AC;&#x2122; functions, Criteria to join Boardâ&#x20AC;&#x2122;s Examinations and Importance of having CPA (T) during schools visitation in Tabora region.

114 ACCOUNTANT REGISTERD BY NBAA FOR 1ST QUARTER OF 2017. In its 171 Meeting the Board approved 114 accountant to be registered with National Board of accountant in different categories. The registered Accountants category wise is Associate Certified Public Accountant (ACPA)

Associate Certified Public Accountant in Public Practice (ACPA -PP)

Temporary Associate Certified Public Accountant (TACPA)

Temporary Associate Certified Public Accountant in Public Practice (TACPA - PP)

TOTAL

114

Compared to previous quarter Where 57 Accountant was registered, for this quarter there was 100% increase of Accountant registered by NBAA. SEMINAR CONDUCTED BY NBAA FROM JANUARY TO MARCH 2017 In order to make sure that members are updated with emerging issues including IFRS, IPSAS and ISAs for the period between January to March 2017 the NBAA has conducted four different seminars to its members. The seminar conducted are as follows.

THEME OF SEMINAR AND TOPICS

AUDITING AND ACCOUNTING SEMINAR · Audit Assurance – Effectiveness and Efficiency · Anti-Money Laundering and Countering the Financing of Terrorism

DATE AND VENUE

18th - 20th January 2017 (three days)

CPD HOURS AWARD

24 hrs

Arusha

· Conducting Fraud Investigations · Inherit Risk – Interim Audit and Controls · IAS 1 – Presentation of Financial Statements · IAS 2 – Inventories · IFRSs for SMEs Update · SSRA – Guidelines on Investment of Social Securities in Tanzania · Social Security and Taxes · IAS 40 Investment Property · Ethical Issues – Professional Behaviour

SOCIAL SECURITY REFORMS IN TANZANIA

24th and 25th February 2017

16 hrs

(Two Days) · IFRIC 14 on IAS 19 and IPSAS 25 - Employee Benefits · Social Security Regulatory Authority Act. · Preparations for retirement and working after retirement.

Dar Es Salaam

· Medicare – retired Employee · SSRA – Guidelines on Investment of Social Securities in Tanzania · Social Security and Taxes · IAS 40 Investment Property · Ethical Issues – Professional Behaviour

April / June 2017

THEME OF SEMINAR AND TOPICS

DATE AND VENUE

INTERNATIONAL FINANCIAL REPORTING STANDARDS

1st to 4th March 2017 (Four Days)

CPD HOURS AWARD

32 hrs

· IAS 1 and IPSAS 1 – Presentation of Financial Statements · IPSAS 28 and IAS 32 – Financial Instruments tion

Presenta-

Mwanza

· IAS 39 and IPSAS 29 – Financial Instruments: Recognition and Measurement · IPSAS 30 – and IFRS 7- Financial Instruments: Disclosures · IPSAS 33- First Time Adoption of Accrual Basis IPSAS

INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMES

31st March and 01st April 2017 16 hrs

· Section 1 – Small and Medium sized Entities

Dar es Salaam

· Section 2- Concepts and Pervasive Principles · Section 3 – Financial Statement of Financial Position · Section 4 – Statement of Financial Position · Section 5 – Statement of Comprehensive Income and Income Statement · Section 6 – Statement of Changes in Equity and Statement of Income and Retained Earnings · Section 7 – Statement of Cash Flows · Internal Audit Vital for SMEs growth · Ethical Issues - Confidentiality

April / June 2017

(Two Days)

TECHNICAL AND ADVISORY DEPARTMENT

CONDUCTS TRAINING ON

FINANCIAL REPORTING

n an effort to promote and foster better financial reporting in the country, Technical and Advisory Department conducted training for employers and employee of the Ministry of Finance and Planning Zanzibar on International Public Sector Accounting Standards (IPSAS) to chief accountants Zanzibar from 06th to 10th February 2017. The training among others focused to impart participants with wide knowledge on issues with regard to IPSAS. The training was attended by 50 Chief Accountants from Ministries and Government agencies of The Revolutionary Government of Zanzibar. The training was facilitated by Mr. Pius Maneno – Executive Director, Mrs. Neema Mssusa – Chairperson NBAA Technical Services Committee, Mr. Angyelile Tende - Manager-Technical and Advisory Services and Peter Mwambujaja The following papers were discussed during the training workshop:

1 2 3

Introduction to IPSASs

2017. The training was attended by 80 Audit Committee members from Ministries and Government agencies of The Revolutionary Government of Zanzibar. The training was facilitated by Mr. Pius Maneno – NBAA Executive Director, Mrs. Neema Mssusa Chairperson NBAA Technical Services Committee and Mr. Angyelile Tende – Manager Technical and Advisory Services. The following papers were discussed during the training workshop:

Relationship of Audit Committee and Auditors

Understanding information presented in Auditor’s report

3 4 5

Follow up techniques on Audit report Understanding financial reports Reviewing financial reports

Related Party Disclosures IPSASs Cash Basis Party 1: Preparation of Financial Statements

Further Technical and Advisory Department conducted training on reviewing financial reports & follow up techniques of audit reports to audit committee members from the ministry of Finance and Planning Zanzibar from 25th to 27th January

I IPSASs Cash Basis Party 2: Additional Disclosures

5 6 7

Consolidation

Accrual Basis/Introduction to IPSASs Accrual

8 9

Directors’/ Accounting Officer Report

Additional Disclosures Comparison of IPSASs Cash Basis and

The training was attended by 50 Chief Accountants from Ministries and Government agencies of The Revolutionary Government of Zanzibar.

Group Work & Presentation April / June 2017

Facilities available at

APC

BunjuDar Es Salaam