Polish universities try out IFRS teaching tools

Polish universities try out IFRS teaching tools
17 April 2014, Warsaw

The IFRS Foundation's Education Initiative promotes a student-centered approach to teaching effective application of global International Financial Reporting Standards (IFRS) known as framework based teaching (FBT). Poland is working towards becoming possibly the first country globally to fully implement this approach. To give representatives of educational institutions a deeper understanding and some practical experience of using FBT, the CFRR and the Polish Association of Accountants (SKwP) organized a workshop for academics in Warsaw on 17 April 2014, as part of the Financial Reporting Technical Assistance Project (FRTAP). Participants welcomed the %26quot;hands-on%26quot; opportunity to work with the training materials and to assess the impact and likely effectiveness of FBT in Poland. The feedback was very positive, with a general feeling that the materials were useful and could easily be adapted for use in Polish institutions. Plans are now being made to hold a similar event in another Polish city.

Leading Audit practitioners in Georgia reflect on shared challenges and priorities

Leading Audit practitioners in Georgia reflect on shared challenges and priorities
12 February 2014, Tbilisi

CFRR heard the views of a range of senior audit professionals in Georgia at a roundtable meeting in Tbilisi on 12 February. This was part of the work currently underway to update the Georgian Accounting and Auditing Report on the Observance of Standards and Codes. Issues including ISA and IFRS compliance, the scope of financial statements audit requirements and audit quality control were discussed. One area identified for improvement was the need for a wider use of audit software which presents a numer of challenges for smaller practices, due in part to the perceived high costs of such software, and its lack of availability in the local language. CFRR valued this open and instructive exchange with those involved, which provided valuable insights into current audit practices in Georgia and will help shape future engagement with Georgia on financial reporting reform.

IFAC Compliance Advisory Panel and CFRR meet in Vienna

IFAC Compliance Advisory Panel and CFRR meet in Vienna
5-6 May 2014, Vienna

IFAC is a key partner of CFRR, especially in encouraging the development of high quality accounting and auditing professionals. IFAC%26rsquo;s Compliance Advisory Panel - which oversees and provides advice on Member Body compliance, makes membership application recommendations, and collaborates with Regional Organizations and Accountancy Groupings %26ndash; held its most recent meeting in Vienna. During informal discussions the Panel updated the CFRR on ongoing initiatives to develop their compliance program and had the opportunity to learn more about CFRR programs in partner countries and the support provided for PAOs. Areas for further cooperation were discussed amidst agreement that such contacts helped both sides fulfill its role more effectively.

Regional cooperation to improve education and standards in accounting and auditing in Eastern Partnership countries

Regional cooperation to improve education and standards in accounting and auditing in Eastern Partnership countries
1-3 April 2014, Chisinau

The CFRR launched two activities in April as part of its regional STAREP program for the countries of the EU%26rsquo;s Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). These two new communities of practice (CoPs) bring together groups of practitioners from throughout the region to share knowledge, experiences and ideas in accounting and auditing; one focussed on education and one on standards. The launch events were held in Chisinau, Moldova and were an opportunity for participants to discuss the current situation in their countries and agree on areas of focus for the CoPs.

The education CoP workshop considered the role of universities in providing high-quality initial professional development education. Potential partnerships, including academic, quality assurance and financial support opportunities, were discussed, as was the value, importance and role of academic research, and the growing demand for learning technologies in modern accountancy education.

Participants in the accounting and auditing CoP workshop reviewed issues of common interest including approximation of accounting framework to EU standards and good international practices, and addressing the specific reporting requirements of SMEs.

Further events for both groups are being planned for later in the year.

Online event updates regulators on the consequences for banks of CFD IV and the Single Rulebook

A CFRR virtual seminar on the implementation of the single rulebook and CRD IV, which also addressed the effects of CRD IV on banks business models in Europe, took place on 14 May. 60 banking regulators and supervisors from 14 countries attended the online event which provided updates on recent accounting and regulatory changes. Topics addressed included the transparency of banks%26rsquo; capital positions and disclosure requirements for Own Funds - outlining the new Single Rulebook designed to enhance regulatory harmonization in Europe and strengthen regulatory requirements, and comparing these to requirements under IFRS. There was also discussion of the impact of the Basel III framework, including capital, leverage ratio, and liquidity requirements; assessing how banks are coping with these regulatory changes and highlighting key points that regulators need to be aware of when supervising and assessing the risks of banks.

Agreement is reached on EU Audit Reform

EU Member States and the European Commission reached a preliminary agreement on the text of an EU Directive amending the Statutory Audit Directive and a Regulation on specific requirements regarding statutory audit of public-interest entities in December. On 3 April the European Parliament adopted the two texts in a plenary vote.

The reforms seek to further clarify the role of the statutory auditor; reinforce their independence and the professional skepticism of the statutory auditor; facilitate the cross-border provision of statutory audit services in the EU; contribute to a more dynamic audit market in the EU; and improve the supervision of statutory auditors and the coordination of audit supervision by competent authorities in the EU. New measures include restrictions on the provision of non-audit services to audit clients; a list of prohibited services; fee limits for non-audit services; the introduction of mandatory auditor rotation; and the establishment of a Committee of European Auditing Oversight Bodies (CEAOB) to ensure co-operation between Member States.

The new rules are expected to be published in the Official Journal of the European Union in the second quarter of 2014 and then enter into force 20 days later. The Directive must be adopted by EU member states within 2 years of that date and the Regulation is effective 2 years from that date. The restriction on fee income from non-auditing services is to take effect within 3 years.

Federation of European Accountants (FEE) initiate debate on the future of audit and assurance

As the process of audit reform continues, the FEE has taken the opportunity to open a discussion on the future scope and scale of audit and assurance which seeks to discuss stakeholders%26rsquo; expectations and allow the profession to clarify the extent to which they can meet these. The issue of the scope of audit requirements is particularly relevant for the countries of Central, South-East, and Eastern Europe and this is a welcome initiative. Views are being sought on a discussion paper until the end of June.

Publication of independent review of World Bank activities to promote and develop SMEs

An Independent Evaluation Group report assessing the World Bank Group%26rsquo;s experience of promoting small and medium enterprise growth between 2006 and 2012 was published recently. A thriving and growing SME sector was acknowledged as being associated with rapidly growing economies. The World Bank Group was providing an average of $3 billion a year in targeted support for the sector, and the report made suggestions of how these efforts could be made even more effective, including harmonizing approaches across the Group, ensuring those most in need receive assistance and strengthening internal quality control.

EIB publication highlights importance of financial reporting for SME access to loans

A recent report by the European Investment Bank (EIB) examining private sector financing in Eastern Partnership countries reinforced the important role that good financial reporting can play in helping SMEs access finance to develop and grow. The report pointed to an %26ldquo;accounting gap%26rdquo; faced by firms that did not produce standardized financial reports. Lenders reported that they found it harder to evaluate such firms repayment capacity and therefore were reluctant to lend as it was felt to be more risky in comparison to similar firms with good accounting systems.

CFRR looks forward to week of high-level meetings in Vienna

Key figures in the financial reporting world from Europe and Central Asia will meet in Vienna for a series of CFRR organized events next week.

• June 2: Regional Forum for Professional Accountancy Organizations (PAOs) in Europe and Central Asia.
• June 3: Ministerial Conference
• June 4: REPARIS Senior Officials Workshop and STAREP Senior Officials Workshop
• June 4-6: Second Executive IFRS Workshop for Regulators