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REPARIS

A regional approach to Accountancy development

Erik van der Plaats

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Objective of presentation:

To share experience about a World Bank regional initiative on enhancing corporate financial reporting in South East Europe

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“No transparency, no trust; no trust, no credit; no credit, no investment; no investment, no growth! So there is a simple logic: financial reporting is an essential building block for financial intermediation, foreign investment, and sustainable economic development.”

Martin GruellRaiffeisen International

REPARIS conference 2006

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• Objectives of CReCR and REPARIS are identical: a sound financial reporting function that serves the economy as a whole

• Process is very similar: regional conference, GDLN

• Starting point similar: A&A ROSCs performed, some action plans

• Many common challenges: IFRS and ISA adoption, tax accounting, SME reporting prudential reporting, etc.

• Main difference = EU focus

Similarities CReCER - REPARIS

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• Post-conflict reconstruction and regional economic (re) integration

• Transition to market economy with larger private sector

• Very small financial sector and high cost of capital

• Large informal economy “closed” policy making

• Objective of EU accession, even if not in short term.

• Introduction, implementation of relevant sections of the acquis communautaire and international standards

Focus on South East Europe

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REPARIS countries ROSC and action plans

Country A&A ROSC Action Plan Implementation

Albania Jun 2006

BiHZ Oct 2005 Dec 2006

Bulgaria Dec 2002

Croatia Jun 2002

Kosovo Jun 2006

Macedonia Dec 2003 Feb 2006 Apr 2007 – Dec 2009

Moldova Dec 2004

Montenegro Sep 2007

Romania Jun 2003

Serbia Jun 2005

Turkey Jun 2005

Ukraine Aug 2002

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A&A ROSC in ECA region

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•Lack of conceptual thinking on purpose of financial reporting

•Overshooting the required use of IFRS

•Consolidated accounts not always dealt with properly

•No continuous translation of IFRS and ISAs

•In general weak enforcement

•weak audit function •General lack of institutional capacity

•Regulatory push as opposed to demand driven

Common issues from A&A ROSC

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A&A ROSC Diagnostics Funded by the World Bank with expert inputs frequently financed by bilateral donors

Country Action Plans Funded by the World Bank, FIRST Initiative, bilateral donors

Implementation at National Level Funded by bilateral donors, European Commission and own contribution

Support, Cooperation, and Coordination at Regional Level Secretariat provided by the Austrian Government; funding of operational costs: being sought

Overview REPARIS program

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• Common solutions to common problems: economies of scale

• Information exchange and Communities of practice

• Cross-country benchmarking (peer pressure)

• Assistance with Country Action Plans

• Advanced Program in Accounting and Auditing Regulation

REPARIS: Regional activities

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• Support for REPARIS Regional Program and for implementation of national level Country Action Plans

• Staff for ECA A&A ROSC program (also part 1 countries)

• Proposed Swiss Cohesion Fund Program for the new EU Member States

• Support to South Caucasus, Central Asia + other regions

• GDLN Center

REPARIS secretariat Vienna

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•Multi-donor trust fund administered by the World Bank

•World Bank entity: Program Secretariat in Vienna

•Technical steering committee European Commission, EU Lamfalussy Committees, major donors

•Official representatives of beneficiary countries

•Private Sector Partnership Group (major private sector donors) – Market participant insights and influence

•annual budgeting and work programming, regular accountability and progress reports/meetings

REPARIS governance