The World Bank - Centre for Financial Reporting Reform

World Bank Centre for Financial Reporting Reform - Newsletter March 2011
   

Welcome to the CFRR's first Newsletter of 2011


The CFRR has had an active start to the year and we look forward to working with you in 2011.

This edition of the Newsletter

  • describes some recent management changes at the CFRR,
  • summarizes the main messages to emerge from the recent European Commission conference on the future of accounting and auditing,
  • re-introduces the Road to Europe Program of Accounting Reform and Institutional Strengthening (REPARIS),
  • and highlights some recent events organized by the Centre over the past couple of months.


News from the CFRR: Henri Fortin takes over as Head

Henri Fortin, who joined the CFRR in November 2010 became the Centre's new head on 1 January 2011, replacing John Hegarty. Mr Hegarty has been appointed Advisor on Financial Reporting and Regulation to the Chief Financial Officer and to the Vice President - Controller at the World Bank. He will continue supporting the CFRR throughout 2011. The CFRR would like to take the opportunity to express its gratitude to John for his vision and leadership.

Mr Fortin comes to the CFRR with substantial previous experience in promoting the reform of financial reporting in Latin America and the Caribbean.

Henri Fortin, the new Head of the Centre for Financial Reporting Reform

Henri Fortin, the new Head of the Centre for Financial Reporting Reform


The future of accounting and auditing in the EU: Change is coming

Conference organized by the European Commission, Brussels 8-9 February 2011

The debate at a conference on the future of accounting and auditing organized by the European Commission on 9-10 February 2011 demonstrated a shared concern that financial reporting and, especially, the audit process needed to evolve to respond to the problems revealed by the international financial crisis. However, it also showed the wide divergence in views over what measures should be taken to deal with these issues.

Michel Barnier, the European Commissioner responsible for policy on accounting and auditing, announced that he would be following up the Commission's recent Green Paper on auditing with proposals for changes to the EU law governing auditing later this year.

  • For further details of the conference see here.
Michel Barnier at the EU conference

Michel Barnier at the EU Auditing Conference.
(Image source: europa.eu)


CFRR and IFRS Foundation present the IFRS for SMEs reporting standard in Kazakhstan

The CFRR and the IFRS Foundation held a workshop on the International Financial Reporting Standard for small and medium-sized entities (IFRS for SMEs) in Astana, Kazakhstan on 11-13 January 2011. The workshop was organized under the Joint Economic Research Program (JERP), with the aim of familiarizing participants with the standard's main elements in order to prepare the ground for the analysis of its possible adoption by Kazakhstan.

  • For further details of the event and detailed presentations (in both English and Russian) see here.
Michael Wells at the JERP Workshop in Kazakhstan

Michael Wells at the JERP workshop in Kazakhstan, 11-13 January 2011


Universities and professional accountants work together to improve accountancy education in Moldova

In a national extension of the REPARIS Accounting Education Community of Practice (EduCoP), Moldovan members of the EduCoP organized a workshop with the local Association of Professional Accountants and Auditors (ACAP) designed to help introduce modern methods for teaching accounting, especially International Financial Reporting Standards (IFRS).

  • A summary of the workshop can be found here.
Universities and local accountants work together to improve accountancy education in Moldova

Participants at the workshop on improving accounting education in Moldova, 9 February 2011, Chisinau


Czech Chamber of Auditors holds first training course on clarified audit standards

As part of the FRTAP program managed by the CFRR and financed by the Swiss Contribution, the Czech Chamber of Auditors (KACR) is organizing a series of training courses for auditors in the Czech Republic on Clarified International Standards on Auditing (Clarified ISAs).

The first of these courses were held on 12-13 October and 18-19 October, and 9-10 November and 29-30 November 2010. The training was designed to prepare practitioners, particularly from small and medium-sized practices (SMPs), for the first audit season when Clarified ISAs will be applied in the Czech Republic. For these reasons, KACR has chosen Clarified ISAs as being its priority theme for Continued Professional Development (CPD) for 2011 and, in order to ensure that as many Czech auditors as possible can attend the course, the course will be repeated three times in 2011 (in Ostrava on 27-28 April 2011, in Prague on 11-12 May 2011 and in Brno on 1-2 June 2011).

As part of the FRTAP, the CFRR is working with the KACR to develop additional training courses for Czech auditors to be launched in late 2011. For further details of the courses on Clarified ISAs (in Czech only) see KACR's page on the the event series.

Czech Chamber of Auditors (KACR)

    The Czech Chamber of Auditors (KACR)


Recent CFRR highlights

As part of the FRTAP and REPARIS programs, the CFRR organizes a series of workshops and seminars on recent developments in financial reporting and the practicalities of implementing reforms to financial reporting.

Here are some highlights from recent CFRR events (full summaries of all CFRR events can be found on the CFRR website):

Carmen Mataragiu at March's GDLN Distance Learning event

Carmen Mataragiu at the GDLN Distance Learning Workshop on Reviewing Auditors in Romania, 1 March 2011


REPARIS - the Road to Europe Program of Accounting Reform and Institutional Strengthening

REPARIS - the Road to Europe Program of Accounting Reform and Institutional Strengthening The candidate and prospective candidate countries of South-Eastern Europe (SEE7) face many challenges on their path to EU accession. They have to adopt the acquis communautaire and also set up sustainable mechanisms to ensure that the provisions of the acquis are not just passed into law but are implemented effectively. These issues are particularly challenging in the area of financial reporting, where the international financial crisis is leading to significant changes in the acquis.

In order to help these countries to adapt their systems of corporate financial reporting, the Austrian Development Agency (ADA), the Austrian Federal Ministry of Finance (BMF), the Luxembourg Finance Ministry and Swiss Confederation (through the Swiss Enlargement Contribution - SECO) are funding the Road to Europe Program of Accounting Reform and Institutional Strengthening (REPARIS). This program is managed by the World Bank's Centre for Financial Reporting Reform (CFRR) and aims to assist the participating countries in setting up and operating systems of financial reporting, aligned with the EU acquis and international standards. Achieving this objective will be an important milestone in participants' progress towards EU membership and will also have direct economic benefits by improving the climate for both domestic and foreign investment.

The countries in the program all have the same objectives and also, as a result of their shared history, face many common problems in reforming their financial reporting systems. The REPARIS program has been designed to use these shared features as a means of accelerating each country's progress towards the ultimate objective of adopting the EU acquis. The program puts learning from others who are dealing with similar challenges and who have similar objectives at the centre of the program's activities. Much of the work of the REPARIS program is based on creating "communities of practice" - groups of specialists from the participating countries who come together, both physically in regular workshops and remotely, to work out shared solutions to the specific problems they face, whether in developing new models of accounting education, setting up effective systems of financial reporting, creating functioning frameworks for audit and public oversight or ensuring that financial regulators can use effectively the information presented in financial reports drawn up using International Financial Reporting Standards (IFRS).

This innovative approach is already yielding dividends, with the participating countries making clear progress in the task of setting up modern systems of financial reporting:

  • The European Commission considers that Croatia has met the requirements of the EU acquis
  • New laws relating to corporate financial reporting have been initiated/or adopted in Macedonia, Kosovo and Bosnia & Herzegovina and are in their initial stages of preparation in Montenegro, Serbia and Albania
  • Professional bodies in Kosovo (2009), Macedonia, both entities of Bosnia and Herzegovina and Croatia (2010) have recently become full members of the International Federation of Accountants (IFAC). Accession to IFAC is a clear indicator of progress in the reform of professional education in accounting and auditing. The CFRR provided technical assistance under the REPARIS program to help Kosovo, Macedonia and Bosnia and Herzegovina through the process of IFAC accession.
  • National bodies are co-operating with their equivalents in other partner countries to produce shared resources. For example, Croatia has shared translations of IFRS with the Federation of Bosnia and Herzegovina. This enables preparers of accounts, auditors, and regulators to have the current version of IFRS (IFRS is the mandatory accounting framework in Bosnia and Herzegovina). Similarly, professors in Albania are providing CPD materials for Kosovo and the professional body in Kosovo (SCAAK) is sharing updated educational materials with its Albanian equivalent (IEKA) and university professors in Albania. Similarly, professional bodies in Serbia, Bosnia and Herzegovina and Montenegro co-operating to develop shared materials and educational resources
  • The National Bank of Macedonia has shared its approach in using IFRS to apply prudential rules with the other REPARIS countries.


Partners of REPARIS

GDLN Distance Learning Event on IFRS for Prudential Supervisors, 15 December 2010

Shamim Diouman at the GDLN Distance Learning Event on IFRS for Prudential Supervisors, 15 December 2010

Accounting Education Community of Practice Workshop, December 2010, Vienna

Liam Coughlan at the Accounting Education Community of Practice Workshop, 29-30 November 2010, Vienna

Second IFRS for SMEs Distance Learning Event, 11 November 2010

Michael Wells at the Second IFRS for SMEs Distance Learning Event, 11 November 2010

Senior Officials Workshop, 27-29 October 2010, Brussels

John Hegarty speaking at the Senior Officials Workshop, 27-29 October 2010, Brussels

Audit and Oversight Community of Practice Workshop, 13-15 October 2010, Vienna

The participants of the Audit and Oversight Community of Practice Workshop,
13-15 October 2010, Vienna


Austrian Development Cooperation     Ministry of Finance, Austria     SECO Switzerland     Ministry of Finance, Luxemburg


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