In an interview with José Monteiro, University Lecturer and Head of Compliance and Internal Audit at ACTIVUS Accounting Services, Monteiro gives an overview of compliance in Mozambique and takes the opportunity to warn the corporate market: “Ethics and conduct are the core that makes everything work”.
We recommend that you read the interview in full for relevant insights into compliance practices from SMEs to large companies.
Profile Mozambique: According to your experience, what analysis do you make of the compliance sector, from the point of view of applicability, in the business context in Mozambique? And whether there are any specific cases that have influenced new compliance paradigms.
José Monteiro: I think that compliance has evolved in the right direction and specifically we have noticed an evolution in the IT sense, in which we have the Tax Authority and also the Ministry of Labor and other state institutions helping to simplify these processes. This has a positive influence on compliance, and let me stress that ethics and conduct are the core that makes everything work in the context of compliance.
Looking at it from another angle, you also have the big companies that force you to comply, in other words, they force you to present appropriate financial statements, certificates of non-debt where you have finances, so a whole series of protocols and procedures that also force the market to improve and increase this level of compliance.
And as a professional in this field, I believe that there is still a long way to go, but in my 14 years in Mozambique I have seen a very positive evolution, which represents a new mentality on the part of business managers.
PM: Meanwhile, technological advances, especially artificial intelligence, learning stimulated by digital means, can be used to transform legal and compliance functions. What is the new role of the compliance officer when monitoring is carried out by data analysis and real-time training is carried out by artificially intelligent robots?
JM: Yes, the role of IT in simplifying processes is not new. It’s been going on for a long time.
Many functions that exist in the area of accounting and taxation, which used to be done by people, by professionals in the area, have been simplified and those people who previously entered the data and validated the data, now simply take on the responsibility of validating the data, in other words, artificial intelligence tools and other IT tools don’t have the prerogative of authorizing the progress of certain processes. They simply help us to check and validate that the steps are compliant, but they don’t do all the work for people.
And, of course, they are very useful and make processes much easier, but there is always a final validation that we have to do on top of this computer validation.
PM: What is similar and what is different between the compliance of a large company and that of a potential growth company?
I think they are very similar, especially in the accounting and tax pillars.
The major tax and accounting obligations are very similar for a small or large entity. For a large entity, at a competitive level, it’s very different, because there may be international reporting to a parent company, which complicates things a little more.
It’s a difference, but it’s not that abysmal. What differences there may be between a large entity and a small entity in terms of compliance are, in particular, environmental actions, legal actions, authorizations, permits, where, as the size of the company increases, the level of compliance is more demanding for large companies than for small companies.
In terms of taxation and accounting, there is no difference when it comes to compliance.
PM: How can implementing compliance help an organization’s management or even give it a competitive edge in the market?
JM: The great advantages are the transparency, trust and credibility of the financial statements based on accounting and tax compliance, so they are a guarantee of these characteristics for the users of financial information.
I can be more competitive by having accounting and tax compliance because I can present my accounts to a big client that I want to get and, by having this, I have a competitive advantage with my competitors and I can go to the bank to get better financing conditions, I can go to the state and get certificates of non-debt or other types of clarification that can also facilitate business, I can get shareholder financing or obtain shareholder financing more easily, so a whole series of situations where this advantage of accounting and tax compliance translates.
PM: What are the biggest challenges facing compliance today?
JM: At the moment, one of the biggest challenges is training and educating people about the need for compliance. We’re witnessing a huge IT evolution and new technologies emerging too.
There are new things every day. So adapting and training people on the tools and alerting them to these new needs. That’s the big challenge.
PM: How do you deal with these challenges in the institution where you work?
By regularly training employees and developing programs that encourage good compliance practices within the institution itself.
Basically, that’s how we deal with the company’s compliance.
