Somalia: Technical Assistance Report-Internal Audit and Accounting Training for the Central Bank of Somalia

IMF Staff Country Reports, January 25, 2019

Source details

Canonical URL: Somalia: Technical Assistance Report-Internal Audit and Accounting Training for the Central Bank of Somalia

The Central Bank of Somalia (CBS) has approved the Internal Audit and Audit Committee Charters and is committed to address remaining shortcomings in financial reporting, auditing, and internal controls.
The Internal Audit Department (IAD) has initiated risk assessments of the various CBS business units and recruited an Information Technology (IT) professional to join the team.
The Accounting and Finance Department (AFD) is making progress in implementing accrual accounting and accounting for foreign exchange operations (International Accounting Standard (IAS) 21).
A new role of Reconciliation Officer was created to ensure all cash transactions are recorded properly.
The IAD functions without a director, which places the internal audit staff at a severe disadvantage to other departments and limits their authority to effectively implement their program.
The CBS has not formally indicated that it will adopt International Financial Reporting Standards (IFRS) despite the mission team stressing the importance of adopting IFRS during this mission and the previous mission.
High priority recommendations were made to address these shortcomings; the report references "Table 1" for homework assignments and high priority tasks.

Approved governance documents:
- Internal Audit Charter
- Audit Committee Charter
IAD actions:
- Initiated risk assessments across CBS business units
- Recruited an IT professional to the internal audit team
AFD actions:
- Progress on implementation of accrual accounting
- Progress on accounting for foreign exchange operations under IAS 21
- Created Reconciliation Officer position to ensure proper recording of cash transactions

Leadership gap: IAD operates without a director, reducing internal audit authority and effectiveness.
Standards adoption: No formal indication from CBS to adopt IFRS despite recommendations.
Implementation risk: Remaining shortcomings in financial reporting, auditing, and internal controls require attention and were the subject of high priority recommendations.

High priority recommendations were issued to address:
- The lack of an IAD director and associated authority issues.
- The need for formal adoption of IFRS.
- Completion of outstanding tasks related to accrual accounting, IAS 21 implementation, and reconciliation procedures.
The report directs readers to Table 1 for specific homework assignments and high priority tasks.

Somalia: Technical Assistance Report-Internal Audit and Accounting Training for the Central Bank of Somalia (January 25, 2019).