Kingdom of Morocco : Accounting and Auditing

Abstract

This report provides an assessment of
 Moroccan accounting and auditing standards and practices,
 and the institutional capacity necessary to ensure
 high-quality financial reporting. The law gives accounting
 standard-setting responsibility to the National Accounting
 Council (Conseil National de la Comptabilité). Since the
 Council was established in 1989, Moroccan accounting
 standards have improved greatly. However, further progress
 is impeded by weaknesses in the accounting standard-setting
 process and, more so, by implementation issues. The Bank
 Al-Maghrib, Insurance and Social Welfare Directorate
 (Direction des Assurances et de la Prévoyance Sociales), and
 Securities Commission (Conseil Déontologique des Valeurs
 Mobilières) are responsible for monitoring the quality of
 financial information and the enforcement of accounting
 standards for credit institutions, insurance companies, and
 listed companies, respectively. While the Bank Al-Maghrib
 has established an institutional framework for bank
 monitoring that is more advanced than that of other sectors,
 the overall design and implementation of the three
 supervisory frameworks need improvement. The legislative
 framework for the Moroccan accounting profession is
 adequate. However, significant implementation issues exist,
 such as the absence of a quality assurance system and the
 lack of continuing professional education. Moroccan auditing
 standards are largely inspired by the International
 Standards on Auditing (IAS).However, the omission of certain
 standards weakens the Moroccan auditing framework. The large
 number of chartered accountants that do not even observe
 Moroccan auditing standards exacerbates this issue. While
 financial statements in Morocco generally include most of
 the information necessary to analyze the financial status of
 a company, certain lesser disclosure standards as compared
 to the IAS reduce the usefulness and transparency of
 Moroccan financial reports. Moreover, financial information
 is not readily available, as the mechanisms to publish
 statements are inefficient. The policy recommendations in
 this report focus on strengthening the enforcement of
 established accounting and auditing requirements, as well as
 supporting the initiatives that Morocco has been
 implementing over the last ten years.