ROSC for Belarus disseminated in Minsk on 27 April 2010
A World Bank team comprising Mr. John Hegarty, Head of The World Bank Centre for Financial Reporting Reform (CFRR), Vienna, Austria, and Mr. Andrei Busuioc, Financial Management Specialist, CFRR, presented the Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) for the Republic of Belarus. This report provides an assessment of financial reporting, accounting and auditing requirements and practices within the enterprise and financial sectors in Belarus. This assessment in Belarus is part of a joint World Bank – IMF reporting on the Observance of Standards and Codes (ROSC).
The report was prepared on the basis of the findings from a diagnostic review carried out in Belarus by a team from the World Bank in September 2008. The review was conducted through a participatory process involving various stakeholders and led by the Ministry of Finance.
The assessment focuses on the strengths and weaknesses of the financial reporting, accounting and auditing environment that influence the quality of corporate financial reporting, and includes a review of both statutory requirements and actual practice.
Belarus continues to take further measures to strengthen accounting and auditing; however, additional steps are needed to align the financial reporting framework more closely with international best practices. The number of accounting and auditing professionals knowledgeable in international financial reporting and auditing standards has increased, but is still limited in relation to the evolving needs of the country. The basic enforcement mechanisms are in place, including the state oversight of the auditing profession through the MoF. However, financial statements are not publicly available, limiting the use which can be made of them to make markets function better.
The A&A ROSC Report contains recommendations related to the statutory framework, financial reporting and accounting standards, auditing standards, monitoring and enforcement, the profession and ethics, and education and training. The recommendations aim to assist in enhancing the financial reporting process in accordance with international experience and good practice, taking account of local circumstances. This is only a first step; the major challenge is to transform such recommendations into real and effective reforms that will help to enhance the quality of corporate financial reporting and deliver for Belarus a financial reporting platform conducive to sustainable corporate sector growth, thus improving the economic situation for all Belarus citizens.
Report on Observation of Standards (ROSC) on Belarus
The World Bank is ready to support Belarus with reforming the financial reporting system, said Head of the World Bank’s Center for Financial Reporting Reform John Hegarty at a seminar held on 27 April to present results of the program on meeting accounting and auditing standards and codes.
“We notice strong points in Belarus’ financial reporting system and are interested in promoting a reformation policy in this sector. We are ready to continue supporting your country in this area,” said the expert.
John Hegarty believes that planning its development in the future, Belarus should bear in mind possible changes in international financing reporting standards. “Nobody says that Belarus’ existing model should be scrapped. We believe it should be revised and improved. If you are eager to go on, you should understand what possible changes in the international financial reporting system will happen,” said the expert.
Presenting the World Bank’s report on Belarus’ compliance with accounting and auditing standards and codes, John Hegarty remarked that the report presents an evaluation of requirements and practices in financial reporting, accounting and auditing in the financial and corporate sectors. As reference points the report uses international financial reporting, auditing standards and European Union laws as well as international practices and appropriate practices used to regulate financial reporting, accounting and auditing for the sake of evaluating the quality of financial information and presenting policy recommendations.
The report underlines that Belarus has been busy with vigorous reforms in the last few years: the banking and insurance sectors have been opened to foreign investors, privatization goes on. As part of the privatization campaign a plan for privatizing and converting state-run enterprises into joint-stock companies has been passed.
Recent legislative, institutional and structural reforms have secured certain results in improving the economic climate, thus creating opportunities for the growth of the private sector and foreign investments. As a result, the country now prioritizes the availability of financial reporting that is compliant with cutting-edge international standards and practices.
John Hegarty believes that Belarus should continue improving laws and institutions that regulate financial reporting in order to make it compliant with changing market requirements. In addition, it is necessary to build up the potential of various participants of the financial reporting process to introduce international standards.
The World Bank report presents recommendations meant to bring Belarus’ financial reporting up to date with international practices and local conditions. It is just the first step towards converting the recommendations into real and effective reforms that will help improve the quality of corporate financial reporting and will create the foundation for financial reporting that would contribute to the sustainable growth of the corporate sector, thus improving the economic situation for the benefit of all Belarus residents.