Title and application
These Guidelines may be cited as the Securities (Internal Controls Over Financial Reporting) Guidelines, 2024.
These Guidelines are issued pursuant to section 211(1) of the Securities Act, No. 41 of 2016 as amended by Act No. 21 of 2022 (hereinafter referred to as “the Act”) to provide guidance to issuers and auditors on the application of Sections 146, 147 and 149 of the Act. They do not address sections of the Act not directly cited.
Scope of these Guidelines
These Guidelines have been designed to guide the implementation of the aforementioned sections of the Act as summarized below—
- Section 146 requires a listed company or company whose securities are registered with the Securities and Exchange Commission (the “Commission”) to file its accounting records, financial records and such other returns with the Commission. This is to be done on a periodic or annual basis as may be prescribed by the Commission by statutory instrument. The section also requires the chief executive officer and the chief financial officer or any other officers or persons performing similar functions in the company, to certify in each report filed, the matters listed in subsection (2) (d), (e) and (f).
- Section 147 requires a listed company or company whose securities are registered with the Commission to establish a system of internal controls over its financial reporting and security of its assets. It also requires the board of directors of a listed company to ensure the integrity of the company’s internal control systems and to report the effectiveness of the same in the company’s annual report.
- Section 149 requires the auditor of a listed company or company whose securities are registered with the Commission to issue a statement as to the existence, adequacy and effectiveness or otherwise of the internal control system of the company. This is to be contained in the auditor’s assurance report of the company.
The Guidelines have been issued to provide clarity on the use of the term internal controls as referenced in Section 147(3) of the Act and to limit the use of the term to Internal Controls over Financial Reporting (“ICFRs”) in relation to sections 146 and 149 of the Act.