Promoting the role of audit committees in Poland: focus on internal controls

A conference hosted jointly by CFRR and the Polish Public Oversight Commission (KNA) -in Warsaw on January 16, 2015 recognized the increasing importance of audit committees and the challenges they face helping companies manage risk, maintain robust internal controls, and provide reliable financial reporting. The FRTAP funded event sought to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. Some 200 participants discussed the issues and gained cutting-edge advice from experts including Dan Goelzer, Founding Member and former Acting Chair of the U.S. Public Company Accounting Oversight Board (PCAOB), on some of the most challenging aspects of the audit committee’s work, including oversight of internal controls, risk management, relations with external auditors, and compliance.

Strengthening audit legislation in STAREP countries: a detailed look at EU requirements

The third session of the dialogue series for members of the STAREP Accounting and Auditing Standards Community of Practice on accounting and auditing in the EU took place on January 15, 2015. It looked in detail at key elements of the new EU regulatory framework on statutory audit, and the main challenges for countries in adopting and implementing the audit Directive and the new Regulation. 120 participants connected from World Bank offices or through WebEx and actively engaged with the speakers, including Maria Roguelova of the European Commission’s Audit and Credit Rating Agencies Unit and CFRR experts, on these key issues.

Accounting education in STAREP countries: reviewing progress in the modernization of course content

CFRR convened a meeting of 12 members of the STAREP Education Community of Practice Tax and Law Working Groups in Kyiv on February 25-26, 2015. (EduCoP) to develop proposed syllabi for the law and tax subject areas, appropriate for undergraduate students studying accounting in STAREP countries. The two groups worked in parallel to develop minimum syllabus content proposals for bachelor degrees across the STAREP region then came together and discussed their progress. The groups will finalize their proposals and the detail will be incorporated into the profiling tool being developed by the CFRR, to be presented at the next full meeting of the EduCoP.

Serbian SMEs: improved financial reporting for better access to finance

A joint CFRR-EBRD workshop on March 11, 2015 in Belgrade for 37 representatives of the SME community and 20 participants from government and international financial institutions discussed how SME can improve their financial reporting and enhance their opportunities to access finance. The first event of a new EU funded program - EU-REPARIS – the workshop introduced and defined the context of financial information in Serbia; discussed the role of financial reporting for business management, access to finance and accounting; and provided a practical introduction to financial reporting, in particular the IFRS for SMEs.

Improving audit quality in Ukraine: a key priority

The CFRR in cooperation with the Audit Chamber of Ukraine hosted a workshop on Improving Ukrainian Audit Quality, on January 21, 2015 for some 120 representatives of the local audit profession. The discussions focused on the recent reforms of statutory audits in the EU and how EU member states are adapting to them. Under its Association Agreement with the EU, Ukraine has committed to align its accounting and audit legislation with the acquis commnunautaire. In that context, it is reviewing the different approaches followed by member states to apply the EU’s audit frameworks, on a number of aspects including institutional arrangements, funding for quality assurance and the role of oversight institutions.

Governance of state-owned enterprises and public-private sector partnerships: Uzbekistan and World Bank Group review good practice and the international experience

The Government of Uzbekistan and the World Bank Group (WBG) hosted a roundtable for senior officials and executives of Uzbek state-owned enterprises (SOEs) on March 5, 2015 at the International Business Center in Tashkent. Uzbekistan is drawing on WBG expertise to help build the country’s institutional capacity for SOE governance and private sector participation, in line with international practice - top priorities for the country to create value for the State and citizens. The roundtable discussed how to improve the mechanisms of public-private partnership in the implementation of major projects, address forms of private sector involvement, and guide engagement with private operators, managers, government agencies, financial institutions and investors. It also addressed development of a clear policy framework for the governance of SOEs, and looked at the following factors to be considered at institutional, state and entity levels.

Name: Samia Msadek
Job title: Director, Governance Global Practice, The World Bank

What is your role in the World Bank?
I am Director in the Governance Global Practice, in charge of the Public Resource Mobilization and Management Department. I lead our financial management agenda for both the public and private sectors, which includes financial reporting.

Why does corporate financial reporting matter to the World Bank?
The vision of the World Bank is to work towards better shared prosperity. We approach this in different ways, including supporting the growth of economies. Accurate financial information, combined with effective supervision, is vital to develop and maintain strong economies. It helps businesses to access credit and grow – creating jobs and generating income. It helps ensure the efficient operation of private and state-owned enterprises. And it increases financial stability.

In your global role do you find different countries are addressing similar issues?
Definitely. The global financial crisis led to increased interest in accounting and auditing frameworks and renewed commitment to ensure they are fit for purpose and properly implemented. In the Governance Global Practice we are working with many countries at different stages in their reform journey and we encourage them to share their knowledge and experiences with others.

How are you doing this?
We have regional teams who help identify issues in national financial reporting and audit systems and recommend solutions; provide expert technical advice and support through reform implementation; and share knowledge and offer training. We then seek to join this up at a global level - one such initiative is "Accountancy Development for Results" (ADR), working with the International Federation of Accountants, professional accountancy organizations from around the world and others with an interest in shaping the financial landscape of the future.

What do you see as the key current issues in financial reporting?
I was struck at our ADR event in Rome last year by the interest in very similar issues from countries on all continents. A key area for growing economies is ensuring a well-managed public sector with appropriate and effective governance. Many countries have a significant state-owned enterprise (SOE) sector, providing jobs, revenue and essential services. There is growing recognition of the importance of ensuring transparency and an effective control environment for SOEs. Other common themes included improving financial education and developing the skills and expertise of everyone involved in accountancy tasks; and how to use modern accounting and auditing tools and technology to increase efficiency and enhance the quality of services. Gender balance emerged as an area of need of our urgent attention. Our global teams are working with local partners to try and address these important challenges. My own vision is "No Professional Accountancy Organization left behind and helping the bottom 40% getting up to speed".

What do you find most satisfying about your role?
After more than 15 years with the World Bank I find it enormously satisfying to see real change being implemented which improves lives. For example, better financial management which offers greater transparency has yielded tangible results in many of the countries I visit - reducing corruption and helping ensure appropriate use of public funds. While the frequent travel can be hard it is more than made up for by the opportunity to meet and work with many enthusiastic and committed colleagues around the world.

How do you spend your free time?
I love cooking and hosting dinners. I can spend hours in the kitchen cooking traditional meals and introducing a modern touch. Very relaxing. I also allocate time for reading with preference to philosophy and psychology. I am fascinated by the capacity of the brain and like reading research papers on the topic. If my energy is low, I like walking and contemplating trees - very energizing!

Is there anywhere you haven’t yet visited that you would like to?
My bucket list is very long. From all the countries visited for business I have a list of cities that I would like to explore in private trips with my family. I also want to discover Africa and more countries in Latin America. A very long list!!

Moldova Audit Training of Trainers Event, 13-14 May 2015, Chisinau

An audit training of trainers workshop focused on internal controls will be held in Chisinau on May 13 and 14, as part of STAREP national activities in Moldova in cooperation with the Ministry of Finance.

STAREP EduCoP Workshop, 20-21 May 2015, Baku

Members of the STAREP EduCoP will meet in Baku on May 20 and 21 to finalize development of a syllabus appropriate for bachelor degrees in accounting across the region. The CFRR profiling tool will allow universities to understand and develop the content, and to benchmark their existing syllabus to internationally recognized benchmarks.

EU-REPARIS Senior Official Workshop, 27-28 May 2015, Vienna

Senior officials from EU-REPARIS countries will meet on May 27 and 28 at the Offices of the World Bank Group in Vienna. The meeting marks the official launch of this new program and the investiture of the EU-REPARIS steering committee.

Financial Supervisors Exchange Forum, 29 May 2015, Vienna

Supervisors from EU-REPARIS and STAREP countries will join a workshop in Vienna on May 29 to explore improved cooperation between supervisors and external auditors, and with committees and institutions in charge of the supervision of the audit function. Participants will review and discuss the findings of the CFRR survey "Financial Supervisors and External Auditors: Building a Constructive Relationship".

3rd Africa Congress of Accountants

The 3rd Africa Congress of Accountants will take place in Mauritius from May 11 to 14, 2015. The objective of the Congress, under the theme – Africa Rising: Partnering for results - is to provide an engagement opportunity for Africa and international thought leaders to propose solution based reforms that the profession should champion in order to accelerate its contributions to Africa economic growth with ultimate aim of improving the lives of the African citizens. The Congress aims to attract 1,500 delegates from Africa and international public and private sectors.

The 2015 CReCER conference

The 2015 CReCER conference "Preserving Economic Gains and Investing in the Future – Promoting Growth through Improved Financial Accountability," will take place in Quito, Ecuador from May 5 to 8, 2015. CReCER, Latin America and the Caribbean (LAC) flagship learning initiative, supports regional economic growth and development through improvement of financial reporting and accountability framework in the public and private sectors. The conference will address issues related to strengthening the accounting, auditing, and financial reporting practices in the public and private sectors to contribute to improved public sector efficiency and effectiveness and encourage private sector growth and increased productivity of enterprises.

Corporate Sector Accounting and Auditing in the Acquis Communautaire, 3rd Edition

CFRR recently completed the third edition of "Corporate Sector Accounting and Auditing in the Acquis Communautaire" which will be published on the CFRR website in May 2015. Designed to give an overview of EU policy in this area for policymakers, regulators, and other stakeholders in member states, enlargement countries, countries within the "European Neighbourhood", and other countries interested in understanding the EU regulatory model, this edition reflects significant changes in EU corporate financial reporting since 2011.

Armenia: A Country Strategy and Action Plan for Corporate Financial Reporting

The Country Strategy and Action Plan to enhance corporate financial reporting in the Republic of Armenia has been published and is available on the CFRR website. Building on the policy recommendations of the 2008 World Bank Report on the Observance of Standards and Codes on Accounting and Auditing (A&A ROSC) for the Republic of Armenia, the Plan sets out a comprehensive reform program for corporate financial reporting in the short to medium term. It focuses on four key areas: strengthening accountancy and audit education; raising public awareness of the benefits of corporate financial reporting and audit; further developing an appropriate legislative framework for the regulation and oversight of financial reporting and auditing; and strengthening implementation of this statutory framework.

FYR Macedonia Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) Update

An updated Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) for FYR Macedonia has been published and is available on the CFRR website. The first A&A ROSC was prepared in 2003. The new report notes that FYR Macedonia made significant progress in aligning its statutory and institutional framework with EU requirements. In particular, it adopted International Financial Reporting Standards (IFRS), the IFRS for Small and Medium-sized Entities (SMEs) and International Standards on Auditing (ISA); and it established quality assurance and public oversight systems for statutory audits. The report draws attention to areas not yet fully aligned with EU requirements and makes suggestions for further reforms, such as strengthening mechanisms to ensure compliance. It highlights the importance of simplifying accounting and auditing requirements as much as possible, especially for SMEs to reduce the cost of doing business, and it encourages Macedonia’s continuing modernization of accountancy education and training.

Georgia Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) Update

An updated Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) for Georgia has been published and is available on the CFRR website. The update assesses the financial reporting requirements and practices in the country's enterprise and financial sectors since the previous ROSC A&A in 2007. It finds significant changes to Georgia’s laws on accounting and auditing and an evolved profession which is largely self-regulated and independent. Overall progress in implementing the recommendations of the 2007 A&A ROSC has been relatively slow, with more time needed to develop a common vision for accounting and auditing practices as part of the broader ongoing complex reform process in the country. The updated Report makes a range of recommendations, prioritizing harmonization with the EU Accounting and Audit Directives.

CFRR is looking for motivated and experienced person to fill an opening of Editor position. The expectations and requirements can be found at our website. Please apply by June 20.

We hope you find this issue of the newsletter interesting and useful. Please let Susan Schroeder, our Editor (sschroeder@worldbank.org) know if you have any comments or suggestions for topics that could be featured in future editions.