Eighteen senior representatives from the Ministries of Finance of the REPARIS countries attended the workshop. Senior officials include policy makers and heads of institutions responsible for implementation of corporate financial reporting reforms in each country.
On the first day of the workshop, participants discussed some of the factors which were influencing the debate over the regulation of financial reporting in the EU. These included political and economic developments in the EU, especially the prospects for further enlargement of the EU in the next few years, but also changes in the global economic environment and systems of global economic regulation in the wake of the financial crisis. In particular, the crisis was leading to major changes in the global rules for regulating banks (the Basel III rules). It had also led to questions about whether the audit process needed to be reformed and had given additional momentum to moves to agree on a common set of global accounting standards for the largest companies. These topics were all the subject of presentations from international experts in their fields.
The workshop also considered the need for financial reporting to adopt a broader perspective by making environmental sustainability a central part of financial reporting – “accounting for sustainability”. A highlight of this session was a video address from HRH The Prince of Wales (view the video message) calling on the REPARIS countries to take advantage of the opportunity offered by their need to update their systems of financial reporting by incorporating sustainability issues, as well as the current acquis in their new frameworks. The Prince argued that this would allow them to meet 21st Century challenges more effectively than in many countries where accounting systems were already well established. This stimulated a lively discussion on how financial reporting systems could take more account of sustainability issues.
On the workshop’s second day, the senior officials focused on developments at the EU level. Participants met staff from the European Commission and the European Parliament to discuss the current state of play and likely future changes in the EU acquis as it affects financial reporting. Discussions covered the Commission’s recent Green Paper on auditing, the Commission’s proposals for reducing financial requirements on small firms - especially “micro” enterprises employing less than five people – and the changes in prospect to financial reporting requirements for banks and insurance companies. This was followed by discussion of several issues affecting the environment surrounding financial reporting, including presentations on how the three new EU financial regulators – for banks, insurers and pensions funds, and securities markets – would operate, moves to reduce the barriers to the free movement of professionals, including accountants, within the EU, and the Commission’s proposals for a EU-wide definition of the tax base for the corporate income tax.
At a more concrete level, participants were briefed on the content of the Commission’s forthcoming reports on the progress made in meeting the requirements of EU membership by countries seeking to join the EU (the Commission published these reports on 9 November 2010 and they can be found here).
On the workshop’s final day, after hearing an account of how Croatia had implemented key elements of the EU acquis communautaire in corporate financial reporting, participants moved on to consider the practical implications of what they had learned during the first part of the workshop both for financial reporting reform in each country participating in the REPARIS program and for the implementation of the REPARIS program itself. Discussion covered the plans for activities under the regional REPARIS program for 2011, the best ways of sourcing funding from EU and other sources for national reform efforts and an exchange of views on the key challenges facing the implementation of effective reforms to financial reporting in the region.
The workshop was successful in its main objective of bringing participants up to date with the latest financial reporting developments in the EU and internationally and of agreeing a work program for the regional REPARIS program for 2011. The senior officials had the opportunity to meet and hear at first hand from the leading global and EU institutions/organizations on matters directly relevant to continued reforms designed to further integrate the Western Balkans and other potential European Union members into the European economic system. Participants also welcomed the broader perspective provided by the discussion of sustainability and left the workshop with a reinforced commitment to working together to push forward financial reporting reform.
Those attending the workshop expressed satisfaction with the results achieved. In particular, Damir Kaufman, Director for Financial Systems in the Croatian Ministry of Finance said: "The Croatian Ministry of Finance is proud to take part in the REPARIS program. The knowledge gained from participating in REPARIS has helped Croatia to further meet the requirements of the EU acquis in financial reporting, and we are happy to share the lessons learned during this process with other REPARIS participants. The message from Prince Charles is particularly relevant to Croatia, as our coastline and climate play a key role in Croatia's attractiveness as a travel destination and so in our future development."
Zoran Cirovic, Assistant Minister of Finance in Serbia added: "Our ambition is early EU membership, and we are working hard at the reforms that are needed. This workshop has allowed us to meet and hear from the global and EU leaders and experts in financial systems reform, and we thank the WB Vienna REPARIS team for organizing it."
Ana Krsmanovic, Senior Advisor from the Ministry of Finance in Montenegro added: "The financial crisis highlights the urgent need for our country to work hard to attract investment for economic growth. The REPARIS program helps us learn what we need to do as a country, and has given us various examples of how such reforms are carried out. The message of the Prince of Wales on accounting for sustainability made me think that we must take this subject into account, and act on it in the years to come. I hope that international donors will support more activities supporting the national implementation of corporate financial reporting reforms".