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Press Releases

The Egyptian Society of Accountants and Auditors honors FRA’s Chairman for his contributions in developing accounting standards – 6 June 2024

    • Hazem Hassan – President of the Egyptian Society of Accountants: Egyptian accounting standards reflect global practices and developments. This achievement fills us with pride, and we commend FRA for its role
    • Farid active participation in developing accounting standards helped companies better assess their assets’ worth by reflecting market value
    • Mohamed Farid – FRA’s Chairman: we’re committed to the long-term development and reform efforts that will ultimately strengthen the national economy
    • Training, qualifying and educating workforce is crucial to build future generations with the skills needed to sustain the positive effects of reforms
    • We extend our sincere thanks and appreciation to the members of Standards Committee, the Authority’s dedicated staff, and the Egyptian Society of Accountants and Auditors for their tireless efforts and hard work

    The Egyptian Society of Accountants and Auditors organizes a ceremony to honor Dr. Mohamed Farid for his contributions in developing Egyptian accounting standards to align with the most effective international practices. This, in turn, strengthens the Egyptian government’s initiatives that promote levels of growth and sustainable development.

    With the participation of the leaders and representatives of Accounting Firms operating in Egypt, Dr. Mohamed Farid, in his capacity as FRA’s Chairman, chairs Standards Committee which is made up of highly qualified accounting and auditing professionals. They are responsible for creating and regularly updating and amending the Egyptian Accounting Standards.

Hazem Hassan – President of the Egyptian Society of Accountants and Auditors began by warmly welcoming Dr. Mohamed Farid – FRA’s Chairman and expressing his deep appreciation for the Authority’s commitment to promoting best practices that strengthen the national economy. He emphasizes the importance of the Authority’s initiative allowing Egyptian businesses to value their assets based on current market conditions, rather than simply relying on historical book values. This approach, he stresses, will take into account both company’s financial performance and its overall financial position, leading to a more accurate picture of their true worth.

President of the Egyptian Society of Accountants and Auditors commended the active leadership of FRA Chairman, whose guidance was instrumental in the Standards Committee’s successful work. The Chairman’s effectiveness was evident in his skillful management of meetings, his grasp of the standards being discussed, and his openness to the perspectives of other committee members. He fostered a collaborative environment, valuing the input of the Egyptian Society of Accountants and Auditors. His overall excellence in leading the committee deserves recognition.

In addition, he points out that one of the biggest hurdles facing Egyptian accounting and auditing right now is adapting to the recently updated standards. These new amendments require significant effort to grasp and necessitate ongoing training to ensure their proper implementation.

President of the Egyptian Society of Accountants and Auditors underscores a key point: Egyptian accounting standards are rapidly aligning with international best practices. He adds that the Egyptian Society of Accountants and Auditors stands firmly with the Authority in recognizing that continuous training and development are vital to address these challenges facing accounting and auditing. The Association, with its well-established training center and proven capabilities, pledges close collaboration with the Authority. This partnership will focus on creating and implementing effective training programs to ensure professionals are equipped to handle the new standards. Ultimately, this joint effort aims to achieve the shared goals of delivering high quality training and elevating the overall standing of the accounting and auditing profession in Egypt.

This was followed by a keynote speech by Dr. Farid, followed by an open dialogue and discussion with representatives and leaders of Accounting Firms.

On the other hand, Dr. Farid emphasizes that the Authority is actively working to develop the Egyptian accounting standards by aligning them with international best practices. This ongoing effort aims to achieve full compatibility with global standards.

Also, he asserts that the continuous development of Egyptian accounting standards aims to stay current with the best international practices and align with the Egyptian government’s reforms promoting sustainable economic growth. He assures that the long-term development and reform efforts will ultimately strengthen the national economy.

Dr. Farid expresses his appreciation to the Egyptian Society of Accountants and Auditors, led by Mr. Hazem Hassan for organizing this ceremony. He also extends his thanks to members of Standards Committee.

 Dr. Farid acknowledges the Egyptian Society of Accountants and Auditors (ESAA) as a cornerstone of the profession in Egypt. Established in 1946, the ESAA has a long and distinguished history of promoting accounting and auditing excellence. He particularly commends ESAA efforts in developing the skills and knowledge of Egyptian accountants and auditors. This focus on professional development is crucial in the current transformative environment. The recent issuance of 15 decisions to amend Egyptian accounting standards exemplifies ESSA commitment to progress. These new standards represent a significant leap forward for the profession in Egypt.

The new amendments include Standard no.13, related to the Effects of Changes in Foreign Exchange Rates. This aligns with international standards,  as in 15th  August 2023,  the International Accounting Standards Board (IASB) issued Lack of Exchangeability, which amended IAS 21 “The Effects of Changes in Foreign Exchange Rates” aim to provide companies with clearer guidance for disclosing relevant information in their financial statements. Notably, the updated standard requires companies to estimate foreign exchange rates and outlines related disclosure requirements.

Moreover, Dr. Farid acknowledged a critical challenge facing the accounting and auditing profession in Egypt: a talent drain due to professionals migrating to neighboring markets and a lack of new talent entering the field. This highlights the urgent need to attract new blood into the sector, especially considering Egypt’s large population.

He emphasized the importance of collaboration between the Egyptian Society of Accountants and Auditors and FRA, adding that this partnership would focus on providing ongoing training for existing members and practitioners. One specific initiative proposed was the launch of a professional master’s degree program through FRA’s training arm, Financial Services Institute. This program would mirror a successful initiative – a professional master’s degree for actuaries. Investing in training and development is seen as a key strategy for nurturing new generations of skilled professionals, ultimately ensuring the long-term success of the current reform efforts.

In addition, Dr. Farid elaborates on the significant amendments to the Egyptian accounting standards. These include the introduction of a revaluation model for fixed assets, intangible assets, and a fair value model for real estate investments. This change ensures a more accurate reflection of a company’s asset value on their financial statements. That is besides amendments to address the impact of foreign exchange rate fluctuations, the streamlined procedures for auditor registration with the Authority, allowing for the inclusion of highly qualified professionals and obliging audit firms to invest in the professional development of their accountants.

Dr. Farid underscores the importance of Egyptian Accounting Standards. These standards empower companies to accurately portray their financial performance. This transparency is crucial for businesses to make sound financial and investment decisions. He specifically highlights the recent amendments to the standards, including the shift from book value to fair value for asset valuation, particularly for real estate investments and property rights.

In a groundbreaking move for Egypt and the region, Prime Minister issued a decree that introduces the first-ever accounting guidance for carbon credits. This ministerial decree clarifies how companies should account for carbon credits. It outlines the scope of treatment, management actions, and key considerations for determining the proper accounting method.

These considerations include understanding the lifecycle of carbon credits, the nature of the underlying transaction, and the commercial purpose behind issuing or purchasing the certificate. Additionally, the guidance specifies how to classify the certificate as either a financial asset or an intangible asset based on the specific commercial arrangement and purpose.

The new accounting interpretation delves deeper into the specific accounting treatment for carbon credits in accordance with different cases. This includes issuance of the certificate for a developer who owns carbon offset project or issuance of the certificate for a developer or financier involved in the project, but not the owner. The third case involved purchasing to achieve carbon neutrality and finally purchasing the certificate for trading on the market.

 Dr. Farid concludes by emphasizing that these amendments are just the foundation for future progress. The ultimate goal is to align with the Egyptian government’s efforts to propel the nation forward, securing a brighter future and prosperity for all Egyptians.

In a related context, the ceremony concludes with the signing of a Memorandum of Understanding (MoU) between FRA and the Egyptian Society of Accountants and Auditors (ESAA). This MoU signifies a commitment to strengthen collaboration between both sides. The focus areas for this enhanced cooperation include exchange of experiences, information and training. The memorandum also aims to achieve cooperation between the Authority and ESAA in developing Egyptian accounting and auditing standards and consultations as well.