Audit and Auditor in EthiopiaHistorical Development of Auditing in Ethiopia

In Ethiopia context, auditing is relatively new phenomenon in earlier periods, the

responsibility to administer and control the country’s revenue and expenditure was
exclusively performed by ministry of finance .Government auditing dates back to
the establishment of an Audit Commission by proclamation No. 69/1944 during
Emperor Regime.Major power and function of the Commissions were as
follows:Responsible for the examination and control of the accounts of the Ministry
ofFinance, and was directly accountable to the Prime MinisterThe power to control
and examine the accounts of all other Ministries was given to the Officers of the
Ministry of Finance.The Establishment of Audit and Control OfficeIn 1946,
proclamation No. 79/1946 was provided to centralize the audit control of
allgovernment accounts in one department by establishing the Audit and Control
officeunder the direction of the comptroller and Auditor General who reported and
wasdirectly responsible to the prime Minister. As a result of this proclamation, the
powersand duties of the new office were clearly defined and the scope of its
activitiesexpanded.According to the Revised Constitution of 1955 (1948 E.C.)
provided even wider duties and a large measure of independence. Accordingly, the
Auditor General reported to the Emperor and the Parliament on the financial
operations of the government and wasgiven access to all books and records of
government accounts.Functions of Auditors General Subsequently, the functions of
the auditor general were amended by decree No.32 of1958 which was later
renumbered as proclamation No.179/1961(1958E.c). The major power and Functions
of Auditor General were as follows:Auditing the accounts of all autonomous bodies
existing by virtue of Imperial chartersConducting the audit of the chartered
organizations. Which were established to
provide essential services to the public , through its charted organizations
AuditDepartment1974 – 1991Following a revolution in Ethiopia, a military
government came into power in Ethiopia in1974 and declared a communist ideology.
As a result, private companies underwentnationalization and the number of state-
owned companies in the country increased.Following this, international public
accounting firms that have been operating inEthiopia, were closed.However, beside
the nationalization event an important landmark in the history ofaccounting and
auditing in this period was the formation of the Audit ServiceCorporation (ASC) by
Proclamation 126/1977 (Government of Ethiopia, 1977).Functions of Audit Service
Corporations (ASC)The ASC mainly had performed external audit of public
enterprises. ASC had renderaudit services to production, distribution and service
giving organizations of which theGovernment is the owner or majority shareholder.