Ethiopia’s young stock exchange is already reshaping the country’s accounting and audit profession, driving changes in qualifications, financial reporting and firm consolidation, even if it has not yet led to a dramatic expansion in audit work.
The Ethiopian Securities Exchange (ESX), launched in January 2025, now has six companies trading. Wegagen Bank and Gadaa Bank listed in 2025, followed this year by Awash Bank, Ethio Telecom, Abay Bank and Bank of Abyssinia. The exchange aims for 50 listings overall by 2030.
All six companies were already audited before listing, so the exchange is yet to create new audit mandates. According to Geta Mehary FCCA, audit partner at BDO Ethiopia Audit, ‘The extra work sits around the listing.’
‘Companies with no plans to list are asking us to prepare them as if they were listing’
Companies need three years of clean, consistent accounts, their offer documents need financial scrutiny, internal controls need to work, and historical figures may need to be re-presented.
Growing demand
Bernard Amukah, KPMG’s head of business consulting in East Africa, expects demand for audit assurance capacity to increase as the number of listed and publicly held entities expands. ‘Listed companies require credible financial statements, stronger internal controls and greater confidence from investors,’ he says.
The effect is also spreading beyond prospective issuers. ‘Companies with no plans to list are asking us to prepare them as if they were listing,’ Geta adds. ‘Their banks and their new investors now expect that standard.’
The growth of the ESX coincides with a wider overhaul, including a new professional accountancy body, new examinations and more demanding requirements for public audit firms.
In 2025, Ethiopia introduced a distinction between certified and public audit firms, with public auditors subject to tougher rules before they can audit listed and other public-interest entities. To qualify, firms must have three years’ certified audit experience, pass an International Standard on Quality Management compliance assessment and undergo file-quality reviews.
‘Hardly anyone here has taken a company through a listing; we’re all learning on live files’
Getnet Haile FCCA, managing partner at Target Consultants, says that the move is driving consolidation among smaller practices.
‘Individually managed audit firms are now coming together and forming a partnership with two or three or four of them so they can be competitive enough to be selected as a public auditor,’ Getnet says.
Building skills
But the tougher rules will initially squeeze capacity, as a small pool of public audit firms is expected to audit most of Ethiopia’s largest entities. This is particularly acute for a country like Ethiopia, which has around 250 certified accountants, compared with approximately 45,000 in Kenya and 60,000 in Nigeria.
According to Geta, Ethiopia does not yet have enough auditors with relevant experience for the market’s eventual size.
‘Hardly anyone here has taken a company through a listing or audited a company under continuous public disclosure rules. We’re all learning on live files,’ he says.
There is also demand for more accountants with IFRS and ISA skills, alongside the increasing importance of financial reporting as a tool for external scrutiny.
IFRS is not new to Ethiopia, but the audience has changed. ‘Accounts used to be written for the regulator, the banks and the owners,’ Geta notes. ‘Now they’re written for people who can sell the shares tomorrow morning.’
Home-grown talent
Ethiopia’s new professional accountancy body, the Ethiopian Institute of Certified Public Accountants, established by the Accounting and Auditing Board of Ethiopia (AABE), launched in December to build domestic training capacity.
Tewodros Sisay FCCA, who leads Deloitte’s economic advisory practice in Africa, says this is a ‘key milestone’ that will strengthen professional accountancy standards and build a locally relevant professional qualification. “That is what ACCA has been working towards for the past 10-15 years,” says.
‘The new institute widens the pipe coming in; it doesn’t stop the leak’
The institute’s first qualification, the Accounting Technician Qualification, aims to strengthen the professional pipeline. ‘That gives us a home-grown route to produce people who understand IFRS and the ISA framework, and who answer to a body that can hold them to an ethical standard,’ says Geta. ‘A country with six listed companies today and 50 planned by 2030 can’t run on imported qualifications alone.’
Recruitment challenge
That pressure is also changing how audit firms recruit and train. At BDO Ethiopia, Geta says professional qualifications are becoming a necessity as firms try to meet the AABE’s requirements. To this end, ACCA gas been working with AABE to help develop capacity.
‘Inside the firm, we’re putting more of our new recruits through professional qualifications, mainly ACCA, with the firm paying and giving study time,’ Geta says. ‘A few years ago that was a benefit we offered. Now, it’s how you build a team that meets the board’s requirements.’
But qualifications alone are not enough. Geta says graduates often arrive ‘strong on theory and weak on doing the job’, requiring firms to invest heavily in coaching, technical training and sector-specific work.
While more qualified people are needed, audit firms must also be able to afford the investment required to produce them. Tewodros says the ‘critical gap’ is accounting skills, but audit fees remain too low to sustain the level of quality now expected.
‘They are so low you cannot hire a proper experienced ACCA qualified person to run your audit,’ he says.
There are ‘shortages in specialised IFRS and capital markets expertise,’ Amukah notes. ‘The immediate demand may be strongest for firms and professionals with expertise in IFRS and capital market regulation’.
Smaller or earlier-stage companies lacking internal capabilities may need external advisers ‘for IPO readiness, IFRS conversion, governance reviews, financial modelling, valuation and transaction support’, he adds.
Meanwhile, experienced auditors can command more attractive salaries in banks, corporates and overseas markets. ‘A well-trained auditor with good IFRS skills is exactly who a bank or a telecom wants as a finance manager, and they can pay more than we can,’ Geta says. ‘The new institute widens the pipe coming in; it doesn’t stop the leak.’
