Accountancy & Audit ReformExperiences, Challenges and Key Success Factors

Henri Fortin, Head, World Bank Centre for Financial Reporting Reform

Centre for Financial Reporting Reform

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Responsible for the WB corporate financial reporting activities in ECA (Europe and Central Asia)

Established in 2007

Based in Vienna

External partnerships and support to other regions and units

18 staff plus network of experts

Comprehensive mix of skills and experience

Global distance learning studio

CFRR in ECA region

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EU Member States EU Neighboring Countries

EU Enlargement Countries Other CIS countries

Shared strategic priorities:- Restoring competitiveness- Regional integration- EU membership

What we do

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Knowledge Activities– Conferences– Workshops– Virtual seminars– Newsletter– Website

Technical Assistance– In-country support and

advice– Technical help desk and

hotline

Partnerships– Globally: IASB, IFAC, etc.

– Regionally: EC, FEE, etc.

– In country: Government, Professional Accountancy Organization(s), etc.

Diagnostics and publications– ROSC A&A reports– Specialized areas (tax v. fin.

reporting, audit oversight systems, etc.)

Our approach

Knowledge sharing

Tailored support for effective, sustainable

implementation

Peer learning, practice forum

Lessons from successful implementationin participating countries

• International standards (IFRS, ISA, etc.)

• EU acquis communautaire• other good practices

What?

How?

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Completeness

4 attributes of national statutory frameworks

Adaptability

Differentiation

Coherence

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Investors

Banks

Statistics officeFinancial sector

regulators

Tax authorities

Public at large

Reliable, transparent

and comparable

accounting and financial reporting

Growth and employment generation

While avoiding undue costs

Improved public administration

Financial stability and development

Financial reporting: why and for who?

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Financial reporting: multiple uses and benefits

Statistical agency, central bank

Tax authorities

Make credit decisions, monitor credit quality/riskProtect rights as creditors

Investors / shareholders(+ broker-dealers, rating agencies, advisers, etc.)

Monitor/enforce tax collections (corporate income taxes and VAT)

Financial institutionsTrade creditorsEmployees, job applicantsPublic procurement agency Ensure solvency of bidders

Collect data for macroeconomic policies

Make investment decisions and protect value of assets

+ Financial-sector supervision

User(s) Benefit(s)

Deg

ree

of s

ophi

stic

atio

n

in t

he in

form

atio

n pr

ovid

ed

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Financial reporting: by who?

Preparers of the F/S (joint-stock companies,

other enterprises)

Auditor

BusinessRegister

Public Oversight System

Financial-sector regulator(s)

Tax Authority

Statistics agency

Investors, lenders, other F/S users

Accounting standard

setter

FR standards

Prof. standardsRegistration

Quality controlDiscipline

F/S

Professional accountancy

organization(s)

Auditreport

cooperation

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Source: European Commission

Due process for IFRS adoption: example of the EU

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Financial reporting obligations at EU-level

Adapted from European Commission 2011

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+ New directive - 2012 Minimal requirements*

Micro-entities

Marco contable “diferenciado”

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Entidad de interés público

PYME

Micro-empresa

Empresas listadas, grandes EP, bancos, compañías de seguros, etc.

Grandes empresas privadas no listadas, y otras EP

NIIF completas

NIIF simplificadas

“15 PCGA hondureños, modificados

Obligaciones limitadas o

ninguna de I/F Gra

do

de

re

spo

nsa

bili

dad

em

pre

saria

l

Categoría de empresa Normas de información financiera

Source: ROSC A&A Honduras

ROSC Accounting and Auditing reports www.worldbank.org/ifa/rosc_aa.html

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Sources

Specifically for Latin America and the Caribbean: lessons-learned publication on financial reporting reform

CFRR Programs

http://go.worldbank.org/OFKEZQWME0

www.worldbank.org/cfrr

Thank you

Merci

Мерци

Falemnderit

Gracias

Vielen Dank

СпасибоDziękuję

شكرا ありがとうMulţumesc

Obrigado

Hvala