EU Member States share their experience of audit quality assurance

Enhancing audit quality in FRTAP countries
9-10 December 2013, Vienna

A CFRR regional workshop in Vienna in December 2013 sought to harness the knowledge and experience of established EU Member States in audit quality assurance as part of the Financial Reporting Technical Assistance Program (FRTAP). Following visits and discussions with a number of EU counterparts, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, with observers from Turkey, met for further briefings on issues of global audit quality and for detailed presentations of quality assurance issues, tools and methodologies. Drawing on the experience of other countries helped participants identify areas which could benefit from further strengthening and begin to reflect on how this could be achieved. These reflections will help shape further CFRR-organized FRTAP activities.

A Warsaw conference on the changes and challenges of applying International Financial Reporting Standards (IFRS)

The Third Annual IFRS Conference
4 December 2013, Warsaw

On 4 December 2013 the third annual IFRS Conference was held in Warsaw. As required of a member state of the EU, Poland uses IFRS for the consolidated financial statements of European companies whose securities trade in a regulated securities market and for all banks and additionally permits IFRS for the financial statements of certain other companies. At the conference, organized as part of the Financial Reporting Technical Assistance Program (FRTAP) by the CFRR with the Accountants Association in Poland, IFRS experts updated an invited audience on recent and forthcoming changes and major IASB projects. Those present discussed the potential impact of changes on financial statements and also, more broadly, the future of financial reporting in the EU. There was a particular emphasis on the reality and practical experience of Polish companies in implementing IFRS. A number of companies as well as academics, government representatives and the Polish Accounting Standards Committee took part. This resulted in an excellent exchange on the issues and problems which can arise, for example in financial reporting quality or difficulties in implementing specific standards, and offered knowledge and shared experiences of approaches to dealing with them.

Striving for academic excellence: Education Community of Practice workshop

On 16 and 17 January 2014 the Accounting Education Community of Practice (EduCoP) entered a new phase at a Vienna workshop. The EduCoP brings together those involved in delivering accounting and audit education from REPARIS and, for the first time, also from STAREP partner countries to share best practice and create new knowledge in addressing the challenges of implementing global education standards for accountants and auditors.

REPARIS/STAREP Education Community of Practice Workshop
16-17 January 2014, Vienna

As many countries move towards the adoption of international and regional standards in accounting and auditing there is a need to ensure high quality, relevant education both for those entering the profession and for ongoing professional development throughout their career. The 13 countries represented at the workshop faced different but often related challenges. The workshop highlighted issues such as the need to bridge the gap between academic and professional qualifications, and local and international requirements; the value of practical experience to complement academic study; and the importance of working with the profession and government on the accounting and auditing framework. Participants learned about possible sources of funding for curricula changes such as Erasmus + and Horizon 2020 and the value of national centers of research and excellence. A particular focus of this workshop was how technology can enhance the teaching of accounting and auditing in universities. Different online and digital teaching methods were discussed and participants worked together to create multimedia teaching tools.

Audit training: from theory to practice

Fourth Audit Training-of-Trainers Workshop
11-12 February 2014, Vienna

A fourth, and final, Audit Training-of-Trainers workshop for REPARIS countries' representatives took place in Vienna on 11-12 February 2014. Designed to help develop the capacity of audit trainers to deliver high-quality training based on ISA, this workshop used an integrated case study simulating a real life company to teach the concept of audit risk assessment. This demonstrated the potential benefits of using %26ldquo;real%26rdquo; materials to offer a more interactive and absorbing experience for learners. Participants were also encouraged to think about the different approaches to delivering knowledge and stimulating learning and were given ideas about how changing setting or the style of training can bring different results. The CFRR is grateful to all those who took part in this series of workshops for their engagement and feedback. We hope that they have been beneficial and that the knowledge gained can be successfully cascaded to colleagues in their home countries.

Serbia adopts amended Accounting and Auditing Laws

As Serbia begins accession talks with the EU, work in aligning accounting and auditing laws with the requirements of the EU acquis communautaire is well advanced. New legislation has been developed in cooperation between the Ministry of Finance, the accounting profession and academia, with support from the World Bank under the REPARIS program, to implement the IFRS for SMEs and public oversight which aims to improve the accountability and transparency of companies in Serbia, including SOE%26rsquo;s. The process of implementation will now begin.

Belarus holds a regional conference on financial reporting and auditing

The Ministry of Finance of Belarus held their first conference on financial reporting and auditing in November 2013. Attended by accounting and auditing professionals, academics, staff of regulatory agencies, and accountants from public enterprises, the conference reaffirmed the continued commitment of the Belarus government to improving financial reporting and highlighted recent reforms. The CFRR were guests at the conference and welcomed the government%26rsquo;s increased focus on audit quality, this was something which would be supported through the capacity building and learning opportunities that the STAREP program offered.

Eastern Partnership countries and EU institutions reflect on the importance of SMEs for economic development

The CFRR introduced the STAREP program to a wider audience of governmental, business support organizations, business leaders, and other development partners at an event hosted by the Lithuanian EU Presidency in November as part of the fourth EU Panel on SME policy in the Eastern Partnership. As the six Eastern Partnership countries continue to work to develop their economies, this event underlined the EU's commitment to the region and focussed attention on the importance of strong corporate financial reporting frameworks for well-functioning market economies, good governance and development. STAREP is designed to support this process and the partner countries in attendance at the conference endorsed its objectives.

EU audit reform moves forward

Draft agreement was reached on 21 January 2014 between the EU Parliament and Member States on legislation to reform the audit services market. The new law would require auditors in the EU to publish audit reports to international auditing standards. Contractual clauses allowing audit by only one of the %26ldquo;Big 4%26rdquo; companies would be prohibited and mandatory rotation of auditors would be introduced. The European Parliament must now vote on the agreement, this is expected to happen in March 2014.

The CFRR looks forward to welcoming Ministers and key policy makers from all partner countries to Vienna for a series of events in June which offer a unique opportunity to assess progress and to discuss future priorities and aims in corporate financial reform.

Ministerial Conference 2014, 3 June, Vienna

On June 3, the World Bank will host its 5th Ministerial Conference on financial reporting in Europe and Central Asia, in Vienna. Some 250 high-level delegates including ministers of economy and finance, and leaders of the business, professional and academic communities from over twenty countries in Europe and Central Asia are expected to take part.

The focus of this year%26rsquo;s Ministerial Conference is the creation of sustainable reporting frameworks for SMEs. As economies strive to recover from the global crisis, addressing difficulties faced by SMEs can lead to more innovation, growth, jobs, and shared prosperity. Improved financial reporting increases opportunities for SMEs to access finance and develop their activities, both domestically and more widely. The particular needs of SMEs must be at the heart of policy making - creating reporting frameworks which can provide quality financial information for credit and business decisions, without being too onerous for smaller companies. The Conference will hear from a range of perspectives %26ndash; including entrepreneurs, government and the accountancy profession %26ndash; what the issues are and how they might be addressed.

The Ministerial Conference will also mark the formal completion of REPARIS for Southeast European countries. REPARIS has made significant reforms possible in Southeast European countries. This momentum will continue, with an even greater focus on creating climates in which SMEs can thrive, with the EU-REPARIS program, part of the EU Western Balkans Enterprise Development Innovation Facility and implemented by CFRR.

A series of other targeted financial reform events will take place in the week of the Ministerial Conference %26ndash; a Professional Accountancy Organization forum co-hosted with the International Federation of Accountants; Senior Officials%26rsquo; Workshops for STAREP countries and REPARIS countries; and an Executive IFRS Workshop for Regulators co-hosted with the International Accounting Standards Board. Invitations to all these events are currently being sent.

PAO Regional Forum, 2 June, Vienna

On June 2, the World Bank Centre for Financial Reporting Reform (CFRR), in collaboration with the International Federation of Accountants (IFAC), will host its 2nd Professional Accountancy Organizations (PAOs) Regional Forum in Vienna. The forum will bring together PAOs from over twenty CFRR partner countries to reflect on the changing financial reporting landscape for SMEs in Europe and Central Asia, and discuss how PAOs can help deliver value to SMEs in a context of structural and legislative changes.

STAREP Senior Officials' Workshop, 4 June, Vienna

On June 4 senior government officials responsible for accounting and auditing reforms from countries of the EU%26rsquo;s Eastern partnership will take part in a workshop organized by the World Bank Centre for Financial Reporting Reform (CFRR) as part of the %26ldquo;Strengthening Auditing and Reporting in the countries of the Eastern Partnership%26rdquo; (STAREP) program. Participating countries include Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The workshop will discuss program countries' progress in developing and implementing reform agendas and update participants on recent EU and global developments in corporate financial reporting.

REPARIS Senior Officials' Workshop, 4 June, Vienna

On June 4 senior government officials responsible for accounting and auditing reforms from Western Balkan countries will take part in a workshop organized by the World Bank Centre for Financial Reporting Reform (CFRR) as part of the %26ldquo;Road to Europe: Program of Accounting Reform and Institutional Strengthening%26rdquo; (REPARIS) program. Participating countries include Albania, Bosnia and Herzegovina, Croatia, Kosovo, Former Yugoslav Republic of Macedonia, Moldova, Montenegro, and Serbia. The workshop will update participants on recent EU level developments in corporate financial reporting, and discuss the benefits and challenges of transposing the new EU accounting directive into local law.

Executive IFRS Workshop for Regulators, 4-6 June, Vienna

As part of the REPARIS and STAREP programs, the World Bank Centre for Financial Reporting Reform (CFRR) together with the IFRS Foundation will hold a three-day workshop on the use of International Financial Reporting Standards (IFRS) by financial regulators.

This workshop is for senior staff of regulatory agencies responsible for supervising banks, insurance companies, and securities exchanges, and those in charge of accounting and prudential regulations, in Central and Eastern Europe. It will enhance participants%26rsquo; understanding of current and upcoming IFRS and related prudential requirements, and provide them with tools to improve the effectiveness of regulation.

Other Events

A new Community of Practice in accounting education reform (EduCoP) will be launched for STAREP partner countries at a workshop in Chisinau on April 1-2. An invited group of educators and others with an interest in financial education will meet to reflect on key priorities and challenges.

The first meeting of a new STAREP Community of Practice for policy makers, standard-setters and PAOs to support the implementation of strong frameworks for accounting and auditing (AACoP) will take place in Chisinau on April 2-3.

Further details on these and other upcoming events will be available on the CFRR Events page.

We are introducing a new, regular newsletter item featuring someone involved with the corporate financial reform agenda. We begin with the Head of the CFRR, Henri Fortin.

Henri Fortin

Name: Henri Fortin
Job title: Head of Centre for Financial Reporting Reform (CFRR) of the World Bank

Where are you based, what is your role and how long have you been doing it?
I have been Head of the CFRR since January 2011, after moving to Vienna in October 2010. I lead a team of financial management specialists and support staff working with partner countries throughout Europe and Central Asia to achieve good systems of corporate financial reporting. My role involves ensuring the CFRR offers targeted solutions, delivers on objectives and is responsive to clients%26rsquo; needs. I try to take every opportunity to engage with stakeholders on the importance of effective financial reporting for economic prosperity %26ndash; in partner countries and wider %26ndash; and explain and promote the work of the CFRR.

What are your priorities for this year?
My first priority is to ensure that our ongoing programs (FRTAP, REPARIS and STAREP, to mention the largest ones) continue to meet the needs of partner countries and are delivering results. My second priority is to continue developing our programs, with a growing emphasis on building on the experience we have gained and on our achievements. I hope for an interesting Ministerial conference in June which, in addition to discussing progress and remaining challenges in partner countries, will address key issues in moving forward the financial reporting reform agenda. A final priority is to prepare the CFRR to contribute to the new World Bank global practice, offering increased possibilities for finance, knowledge and convening services to improve our delivery to clients.

What are the challenges (for your organization and/or for financial reporting more generally)?
I am incredibly proud of my team who successfully combine thorough, credible financial reporting knowledge with excellent interpersonal skills. As the size and remit of the CFRR grows, one challenge is to ensure that we bring on board new talents to join the team in order to maintain our excellent service delivery to partner countries.
The major challenge for financial reporting generally is, as I see it, keeping stakeholders engaged and committed. There needs to be involvement at all levels to maintain reform momentum and ensure that the right policy instruments are put in place and that implementation is effective - SMEs, for example, need sustainable, manageable reporting frameworks to encourage entrepreneurship.

What do you most enjoy about your job?
One of the best things about my role is that it is so varied. I like to introduce the work of the CFRR to audiences all over the world and to raise the profile of financial reporting. I particularly enjoy travelling to our partner countries and talking to a whole range of interlocutors. These are great opportunities to get a depth of understanding of specific financial reporting issues and brainstorm possible solutions. I enjoy working with our counterparts and stakeholders to find the right way forward for their country ?and also to experience the rich cultural and culinary variety our region offers. As some of our programs begin to yield results it is hugely satisfying to see reform being implemented in partner countries and know that we have played a role in these achievements.

What is your favorite way of relaxing?
I like to do something active and completely removed from the financial world to relax, like running, cycling, skiing or tennis. Coming from France I, of course, also appreciate a good meal and a glass of wine!

If you would like to possibly feature in a future edition please contact Susan Schroeder, our Editor at sschroeder@worldbank.org.

Liam Coughlan

The World Bank Centre for Financial Reporting Reform lost a good friend and colleague recently. Liam Coughlan, 51, passed away suddenly earlier this month.

Liam joined the World Bank in 2010. His deep understanding of financial reporting reform but, as important, his passion for sharing his knowledge made him a key member of the CFRR team. He was happiest in his working life when engaged with people, brainstorming problems and finding solutions. Liam%26rsquo;s recent work in Bosnia and Herzegovina, Kosovo and Serbia, was instrumental in helping these partner countries achieve significant progress in their reform efforts. In addition, he supported professional accountancy organizations throughout the region and his commitment and energy helped create a vibrant community of practice, bringing together educators from a number of countries.

A recognized expert in accounting education and corporate financial reporting, Liam had worked with a number of organizations in the field of accountancy and development in the Western Balkans, the Southern Caucasus and Sub-Saharan Africa. He brought a unique perspective to corporate financial reform. For him it was about more than regulations and enforcement; it was about people and creating the best environment to improve lives. He believed passionately in equal opportunities and saw his role as helping build financial regulatory environments and develop financial literacy to create economic growth.

He was also an inspirational teacher and invested much of his time driving forward improvements to accountancy and auditing education and training. His passion for the subject inspired those he taught, and he gave his time and considerable knowledge willingly and freely, well beyond the confines of the classroom. Liam was a mentor to many young professionals in Western Balkan countries, encouraging a new generation of practitioners, officials and politicians to grasp opportunities to improve financial frameworks.

Liam will be greatly missed by all his colleagues and friends in the World Bank but his legacy will live on.