that timeliness is of the essence as audited financial statements must be submitted to the Director of Banking Supervision no later than 105 days after year end. 827. Under the 2006 Banks and Financial Institutions Act, the Bank of Tanzania is responsible for issuing an accounting manual, for mandatory application by all banks and financial institutions. Every bank or financial institution is required to annually appoint an independent auditor who shall undertake the annual audit in accordance with international auditing standards. There is also the requirement under that Act for the boards of banks and financial institutions to appoint internal auditors. The internal auditor is charged with verifying the accuracy and efficient implementation of internal control systems and credit management, among other responsibilities. The internal auditor is required to report to the Audit Committee. 828. Under the provisions of the Act, all banks and financial institutions are also required to publish audited financial statements, including detailed notes to the accounts. This requirement is being fulfilled, notes the CSAR, as banks and financial institutions have been widely publicising their financial statements in the press. In Zanzibar, the supervisory role of the Bank of Tanzania is carried out by the Peoples’ Bank of Zanzibar (PBZ) under a Memorandum of Understanding between both institutions. 829. In addition to the foregoing, Tanzania adopted relevant international codes and standards that should promote the accountability of companies, their boards and officers to the different stakeholders. These include the objectives, standards and codes of the OECD, the Commonwealth, the International Accounting Standards, and the International Standards on Auditing. With regard to financial reporting, the CSAR shows Tanzania adopted the International Standards on Financial Reporting. In addition, all company accounts must be certified by a Certified Public Accountant who could be viewed as an independent. The Report observes however, that the capacity of the National Board of Accountants and Auditors (NAAB) to monitor compliance with the required standards of financial reporting is constrained by the paucity of professional accountants and auditors in Tanzania. 830. The CSAR notes that there is a gap between the legal and regulatory framework and the capacity of the enforcement institutions. It further observes that although there have been constraints the professional Associations (e.g. the Engineers’ and Accountants’) are more able to ensure accountability by their members. The internal governance mechanism and corporate governance 831. The CSAR notes that internal workings of corporations are vital for promoting good corporate governance. Internal mechanisms revolve around the ownership structures and the boards of directors. Shareholders are propelled by these structures to monitor management. According to the CSAR, concentration of ownership – in the hands of one or a few shareholders – tends to have shareholders actively involved in company affairs, willing to monitor management and take resonsibility for replacing managers and appointing board members. Where there is wide dispersal of shareholding, conversely, directors tend to exercise firm control. 832. The CSAR notes that in Tanzania, share ownership is concentrated, with levels ranging between 20 and 75 per cent as illustrated by companies listed on the DSE (i.e. the major corporations). The inference is that the shareholders have to be in control. In terms of board composition, most of them have more Non-Executive Directors (NEDs) and over a three year period, NEDs accounted for over 80 per cent of the board. As the shareholding was concentrated, the NEDs were in more of an advisory role than in control. 833. The role of Audit Committees in assessing the financial affairs of companies (including financial reporting and liasing with the external auditors) and advising the board thereon, is an integral component of corporate governance. The CSAR showed that for DSE-listed companies, their Audit Committees were mostly chaired by NEDs between 2008 and 2010 834. According to the CSAR, accountability to stakeholders – to those outside the company, in particular - is further undermined by the fact that the Tanzaniam corporate sector is dominated by foreign companies whose activities are largely shrouded in secrecy. There is also what the report describes as ‘’collusion, rent seeking behaviour, corruption and a lack of corporate integrity that have been illustrated by defective and expensive energy contracts, misappropriation of government funds from the Bank of Tanzania”. 167