Contacts
In Podgorica:
Jan-Peter Olters, World Bank Representative
Tel.: + 382 81 403 295, Email: jolters@worldbank.org In Brussels:
Erik van der Plaats, Senior Financial Management Specialist
Tel: + 32 2 504 0997, E-mail: evanderplaats@worldbank.org In Washington DC:
David Nagy, Corporate Financial Reporting Specialist
Tel: +1 202 458 7511, E-mail: dnagy@worldbank.org
Podgorica, November 23, 2007 – The World Bank’s “Accounting and Auditing Report” concludes that Montenegro has made significant progress in developing financial reporting but further action is needed to bring standards in line with international best practices. Financial reporting and auditing need to improve, not least to conclude a reform process that aims at devising a sound financial reporting framework aligned with the European Union’s body of law, the acquis communautaire. The World Bank’s experts found that financial information by enterprises in Montenegro often lacked detailed disclosures, and that financial reporting standards have not been enforced in a systematic manner. They noted that it was not yet common practice to make financial statements publicly available, as required by the acquis. These were among the key results that emerged from discussions during a dissemination conference on the “Accounting and Auditing Report on the Observance of Standards and Codes (AA ROSC)” that the World Bank and Ministry of Finance organized in Podgorica. The conference informed the public and market participants about the findings of the AA ROSC for Montenegro, while recommending policy measures to overcome remaining challenges. In addition to experts from the World Bank, the conference was attended by the Deputy Prime Minister, senior officials, the accounting and auditing profession, private and financial sector companies, academia, and the donor community. Based on a mandate from the Financial Stability Forum, the World Bank has reviewed corporate financial reporting in Montenegro against internationally recognized standards such as the International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). "Montenegro’s rapid transition to an open and dynamic market economy has already brought considerable economic growth,” explained Erik van der Plaats, Senior Financial Management Specialist from the World Bank’s Center for Financial Reporting Reform in Europe and Central Asia. “Transparent corporate financial reporting is crucial for maintaining trust in the proper functioning of the Montenegrin economy and the consolidation of the current levels of economic growth, whilst mitigating major financial risks. This World Bank ROSC report and our constructive working relationship with the Ministry of Finance and other key stakeholders provide a very good starting point for aligning corporate financial reporting with international standards and the relevant EU body of law in a way that makes sense for Montenegro.” Experts welcomed the Government’s willingness to further enhance corporate financial reporting by establishing a multidisciplinary National Steering Committee for corporate financial reporting to advise policymakers, regulators, and other stakeholders on the implementation of the ROSC recommendations. “Transparent corporate financial reporting is a basic building block of the financial architecture. The objective is to ensure that the public is provided with reliable and essential information about the financial condition, performance, and risk profiles of enterprises,” said David Nagy, a World Bank Corporate Financial Reporting Specialist. Based on the successful experience of other countries in the region, conference participants encouraged the Montenegrin Steering Committee to develop a detailed Country Strategy and Action Plan to further enhance the quality of financial reporting in Montenegro. “We look forward to assist the Government in enhancing corporate financial reporting in Montenegro which will also contribute to achieving the priorities of the Country Partnership Strategy for Montenegro and the country’s broader EU integration objectives. There is, at present, a great opportunity to accelerate the implementation of structural reforms of this type and help to strengthen the microeconomic foundations for high rates of sustainable growth in the future years as well,” concluded Jan-Peter Olters, World Bank’s Representative for Montenegro. For more information about the World Bank's work on corporate financial reporting in South Central and South East Europe, please visit the following website: http://www.worldbank.org/reparis |
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