ACCOUNTING AND AUDIT REFORM IN

GEORGIA

Investments

Education

REPORTAL.GE

• EU Association Agreement• MoF sub-division• 21 Staff Member + Board• Law Enforcement• 100% Financed from State Budget

Audit

SARAS

Mission:To facilitate economic growth, and maximize employment opportunities in Georgia by providing society with relevant and reliable financial and non-financial information through supervision system based on international standards

SIZE

IV Category (Micro)

III Category (Small)

II Category (Medium)

I Category (Large)

Assets

< 1 Mil.

< 10 Mil.

< 50 Mil.

> 50 Mil.

< 2 Mil.

< 20 Mil.

< 100 Mil.

Revenue

Ave.# of

Employees

> 100 Mil.

< 10

< 50

< 250

> 250

Required Financial Reporting Standard

Local Standard

IFRS For SMEs

IFRS For SMEs

IFRS

Management Report

Voluntary

Voluntary

Mandatory

Mandatory

Audit

Voluntary

Voluntary

Mandatory

Mandatory

REGULATORY FRAMEWORK

PIEFinancial Institutions, Listed

Companies IFRS

+ Non Financial & Corporate

GovernancePIE AUDIT

Compliance rate 92%

119 - 16

100 - 10

370 - 45

41 - -

-

-

71

39 -

1 -

770 -

-

-

-

-

-

-

ENTITY

PIE

I

II

III

IV

NGO

Total

UNDER REVIEW

IN THE PROCESS

PUBLISHEDNot

Submitted

-

2018

SIZE

IV Category (Micro)

III Category (Small)

II Category (Medium)

I Category (Large)

Assets

< 1 Mil.

< 10 Mil.

< 50 Mil.

> 50 Mil.

< 2 Mil.

< 20 Mil.

< 100 Mil.

Revenue

Ave.# of

Employees

> 100 Mil.

< 10

< 50

< 250

> 250

Required Financial Reporting Standard

Local Standard

IFRS For SMEs

IFRS For SMEs

IFRS

Management Report

Voluntary

Voluntary

Mandatory

Mandatory

Audit

Voluntary

Voluntary

Mandatory

Mandatory

REGULATORY FRAMEWORK

PIEFinancial Institutions, Listed

Companies IFRS

+ Non Financial & Corporate

GovernancePIE AUDIT

Compliance rate 90%

96 1 13

100 5 9

365 30 48

2,937 238 362

-

432

21 4

3,519 278

2

11

39

22,146

1

ENTITY

PIE

I

II

III

IV

Total

UNDER REVIEW

IN THE PROCESS

PUBLISHEDNot

Submitted

22,199

2019

• Training materials worked out by a foreign expert Mike Wells• Training of 30 English trainers• Development of training materials for Georgian reality• Training of 58 Georgian trainers• Development of the Training materialს for the final users• Final users’ training with prepared material

Training of trainers

Translation of the training modules

• Translation of the modules• Review of translated modules• Publishing the 35 modules for any interested parties

SUPPORT OF IFRS FOR SMES IMPLEMENTATION

❑ 88 trained trainers❑ Training materials❑ Pilot trainings

➢ 5 completed groups (100 persons)

❑ 35 Training Moduleshttps://www.saras.gov.ge/ka/Home/Modules?Length=4

SUPPORT OF IFRS FOR SMES IMPLEMENTATION

Commercial Trainings ➢ Tbilisi 257➢ Batumi 20

Free of Charge Trainings performed so far❑ Pilot – 100 Accountants❑ MoF Academy – 40 Accountants❑ TBC Bank -100 Accountants (up to 500)❑ World Bank - 40 Accountants (up to 500)❑ EBRD - (up to 100)❑ Enterprise Georgia - negotiating

So far more than 500 accountants from III category entities were trained.

Estimated Population ~ 4,000 SME’s

PERFORMED TRAININGS

LEVEL OF COMPLEXITY

Le

ve

l o

f C

om

ple

xit

y

EU Directive Minimum Requirements

IFRS for SME / Micro Guide

Georgian IV Category Standard

ASEAN Micro Standard

UK and Ireland FRC 105

Polish Micro Standard (AA)

Estonian Micro GAAPDefunct 2005

Georgian GAAP

Professional accountancy organizations

• The Georgian Association of Independent Accountants and Auditors (GAIAA)

• The Georgian Federation of Auditors, Accountants and Financial Managers (GFAAFM)

• The Georgian Federation of Professional Accountants and Auditors (GFPAA)

BENEFITS OF THE REFORM

More complete and accurate financial information available to:

✓ Potential Investors

✓ Financial Institutions

✓ Credit rating agencies

✓ Tax Office

• Higher Transparency for Capital Markets• Higher Access to Finance• Reduced administrative burden/cost

savings

• IFRS standards• International Audit Standards• Auditors Registries• PROFESSIONAL education Registries• Manuals• News• Legislative Base• Online Dictionary

• Georgian Entities Financial and Non-financial published Reports

• News• Research results

REPORTAL.GE

SARAS.GOV.GE

Informational Resourses