Mauritian FSC Issues Guidelines On Compliance With Overseas Accounting Standards

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

01 March 2005

In a circular letter published by the Mauritian Financial Services Commission (FSC) last week, GBC1 Corporations (or companies holding Category 1 Global Business Licences) were advised of the standards to which they must adhere in order to secure permission to prepare their financial statements in accordance with overseas international standards.

The FSC explained that:

"Section 26(2) of the Financial Services Development Act 2001 (FSD Act) provides that a corporation holding a Category 1 Global Business Licence (GBCl Corporation) must prepare its audited financial statements in accordance with International Accounting Standards (IAS)."

"By amending section 26 of the FSD Act and introducing subsection (4), the Finance Act 2002 introduced an exception to this general principle. This means that a GBC1 corporation is deemed to have complied with section 26(2) of the FSD Act where its audited financial statements are prepared in accordance with such internationally recognised accounting standards as may be agreed with the Commission."

It went on to add that:

"From time to time, Management Companies seek approval for GBC1 corporations to prepare their audited financial statements in accordance with accounting standards other than the International Accounting Standards."

"In this respect, the Commission is pleased to advise that for the purposes of section 26 (4) of the FSD Act, a GBCl corporation may...without the prior approval of the Commission, prepare its audited financial statements in accordance with the following international accounting standards - (a)UK GAAP, (b) US GAAP, and (c) South African GAAP."

However, the FSC circular explained that in order to receive such permission, the audited financial statements submitted by the GBC1 firm must be accompanied by:

"A confirmation from the auditor that there are no significant issues that arise from a comparison of the results obtained using the standard adopted with the results that would have been obtained if IAS had been used; or where significant issues arise from the comparison, by a statement of reconciliation from the auditor showing the adjustments that would be required to make the financial statements agree with the results that would have arisen had IAS been used."

Recommended