In a move to modernize financial reporting and align with international standards, the Accountant General Department under the Ministry of Finance and Economic Affairs has launched training sessions for accountants across Ministries, Departments, and Agencies (MDAs).

The initiative aims to facilitate Malawi's transition from cash-based accounting to the more comprehensive Accrual Basis of Accounting, according to Chifundo Kapulula, Director of Accounting Services in the Office of the Accountant General

Accrual Accounting is an accounting method that records revenues and expenses when they are earned or incurred, rather than when cash is received or paid, an approach provides a more accurate picture of financial health by recognizing all financial activities as they happen.

In contrast, cash-based accounting records transactions only when money is exchanged, which can sometimes obscure liabilities and assets.

Accrual Accounting is widely adopted under International Public Sector Accounting Standards (IPSAS) to ensure financial transparency and accountability, said Kapulula.

Speaking during one of the trainings in Lilongwe, Kapulula, highlighted the significance of this shift: "We are transitioning to Accrual Accounting, ensuring our financial statements are more transparent, accountable, and comparable to international standards."

He added that the migration, expected to be fully implemented by 2027, will enable financial reporting that recognizes transactions as they occur, rather than when cash is exchanged.

Kapulula stressed that adopting IPSAS will enhance Malawi’s ability to benchmark its financial reports against those of other countries.

"A standardized approach allows for global comparability, unlike the limitations of cash-based reporting," he noted.

Among the participants, Fatima Dossi, Finance Manager at the Malawi Revenue Authority, praised the training's impact.

"This program empowers MDAs to prepare financial statements that align with Accrual Accounting principles and international requirements," she stated.

Dossi further said the advantages of Accrual Accounting, pointing out that "it enables organizations to recognize expenses when incurred rather than upon payment, leading to more accurate financial assessments."

Kapulula said the training marks a crucial step toward greater transparency and financial accountability in Malawi’s public sector as the country seeks to strengthen fiscal discipline, improve decision-making, and align its financial practices with global standards.