According to the assessment of accounting and auditing practices conducted by the World Bank in 2002, Moroccan accounting standards are conceptually different from International Accounting Standards (IASs). The World Bank concluded that, since the establishment of the National Accounting Council (Conseil National de la Comptabilité, or CNC) in 1989, Moroccan accounting standards have improved significantly, but that inadequate enforcement and flawed standards-setting process impede further progress. One of the factors contributing to weak enforcement is the inefficient distribution of resources to the CNC. In line with the World Bank's recommendations, Moroccan authorities and other stakeholders developed an action plan that was submitted in February 2004 to the Government. A 2005 World Bank report reiterated that the Moroccan authorities are committed to the adoption of IFRSs.

General Overview

From April to July 2002, at the request of Moroccan authorities, the World Bank conducted a review of accounting and auditing practices in Morocco in order to evaluate the weaknesses and strengths of the accounting and auditing requirements, and to compare the reporting requirements with actual practices. International Financial Reporting Standards (IFRSs) and International Standards on Auditing (ISAs) were used as the benchmarks for assessing national standards. The Report on the Observance of Standards and Codes (ROSC), published in July 2002 as a result of the assessment, contains a suggested reform agenda and a detailed action plan to improve the accounting and auditing framework in Morocco.

The World Bank explains on its website, that after the publication of the ROSC, Moroccan authorities and other stakeholders analyzed the report's recommendations to develop an action plan that was submitted in February 2004 to the government. According to the World Bank website, the action plan consists of four major components. First is the "adoption of financial standards conducive to transparent financial reporting." Second, the plan calls for professional development in the field of accounting, along with enhancing the quality of statutorily required financial-statement audits. The third element of the plan called for the institution of more rigorous enforcement "to ensure public interest entities comply with IFRS in their general-purpose financial statements." Finally, the fourth pillar of the plan was a commitment to timely publication of and public accessibility to financial statements. A subsequent 2005 World Bank report reiterated that the Moroccan authorities are committed to the adoption of IFRSs.

The framework for the preparation of financial statements in Morocco is based largely on the Fourth European Directive which, at the time of the World Bank assessment, differed significantly from the International Accounting Standard Board (IASB) framework. According to the World Bank 2002 report, one major difference is that the main objective of the preparation of financial statements in Morocco is to provide information to the tax authorities and the management, and not to the other users of financial statements, e.g. investors. Secondly, the Moroccan accounting requirements are not based on the "substance over form" principle. Finally, accounting law in Morocco is influenced by the principle of "prudence." Thus, the World Bank asserts, financial statements prepared under the Moroccan accounting standards do not meet the needs of the users of the financial statements and "do not purport to give a realistic picture of the economic position of enterprises" (p. 11).

Accounting standards in Morocco are set by the National Accounting Council (Conseil National de la Comptabilité, or CNC). The World Bank notes in the 2002 ROSC that, since the establishment of the CNC, the Moroccan accounting standards have improved significantly, but cautions that inadequate enforcement and flawed standards-setting processes impede further progress. One of the factors contributing to the weak enforcement is the inefficient distribution of resources to the CNC.

The responsibility for ensuring compliance with accounting requirements lies with the Central Bank of Morocco (Bank Al-Maghrib, or BAM) for credit institutions, the Insurance and Social Security Directorate (Direction des Assurances et de la Prévoyance Sociales) for insurance companies, and the Securities Commission (Conseil Déontologique des Valeurs Mobilières, or CDVM) for listed companies. The World Bank, in its 2002 ROSC, noted that "the overall design and implementation of the three supervisory frameworks need improvement" (p. i). At the time of the World Bank's assessment, accounting requirements for banks and other financial institutions differed significantly from international standards. However, according to the August 2006 Update of the Morocco's page on the Deloitte & Touche IAS Plus website, the Bank Al-Maghrib was contemplating a plan to require Moroccan banks and other financial institutions to prepare their financial statements in accordance with IFRSs starting 2008. The 2007 Article IV Consultation report by the IMF pointed out that preparations [for the adoption of IFRSs]... are well advanced" (p. 3).

Requirements for the disclosure of financial information of public companies are mainly specified in the Law on Securities Commission, which is supplemented by the Law on Organization for Collective Investment in Securities, the Law on Stock Exchanges, and Circulars of the Securities Commission (which do not have force of law). Public companies are defined in law as "any listed company, any company that engages in advertising to sell its stock, and any company with more than 100 shareholders." The CDVM, according to the 2002 World Bank report, does not enforce accounting requirements effectively, due to the lack of necessary authority to oversee financial information, ineffective system of fines, inadequate information gathering system and human resources. According to the August 2006 Update of the Morocco's page on the Deloitte & Touche IAS Plus website, companies listed on the Casablanca Stock Exchange may choose to apply either Moroccan GAAP or IFRSs. The Insurance and Social Welfare Directorate oversees insurance companies in Morocco and conducts both off-site and on-site examinations. In the 2002 ROSC, the World Bank pointed out that the legal and regulatory framework for accounting standards for insurance companies is deficient in a number of areas.

The Certified Public Accountants Association (Ordre des Experts Comptables du Royaume du Maroc - OEC) is listed as a member on the International Federation of Accountants' (IFAC) website.

The Principles

IFRS 1: First-time Adoption of International Financial Reporting Standards (effective 2006)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 2: Share-based Payment (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 3: Business Combinations (effective 2004)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 4: Insurance Contracts (effective 2006)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 6: Exploration for and Evaluation of Mineral Resources (effective 2006)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IFRS 7: Financial Instruments: Disclosures (effective 2007)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 1: Presentation of Financial Statements (effective 2007)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 2: Inventories (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 7: Cash Flow Statements (effective 1994)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 10: Events after the Reporting Period (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 11: Construction Contracts (effective 1995)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 12: Income Taxes (effective 2001)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 14: Segment Reporting (effective 1998)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 16: Property, Plant and Equipment (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 17: Leases (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 18: Revenue (effective 1995)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 19: Employee Benefits (effective 2006)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (effective 1984)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 23: Borrowing Costs (effective 1995)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 24: Related Party Disclosures (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 26: Accounting and Reporting by Retirement Benefit Plans (effective 1998)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 27: Consolidated and Separate Financial Statements (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 28: Investments in Associates (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 29: Financial Reporting in Hyperinflationary Economies (effective 1990)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 31: Interests in Joint Ventures (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 32: Financial Instruments: Disclosure and Presentation (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 33: Earnings per Share (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 34: Interim Financial Reporting (effective 1999)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 36: Impairment of Assets (effective 2004)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1999)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 38: Intangible Assets (effective 2004)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 39: Financial Instruments: Recognition and Measurement (effective 2006)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 40: Investment Property (effective 2005)

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There is insufficient publicly available information as to Morocco's compliance with this principle.

IAS 41: Agriculture (effective 2003)

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There is insufficient publicly available information as to Morocco's compliance with this principle.