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Senior Officials Workshop 2011

10-11 November 2011, Vienna

As part of the REPARIS program, the CFRR organized a workshop on 10-11 November for senior officials from countries participating in the program. The workshop attracted 21 participants drawn from finance ministries, central banks, and financial regulators from the eight countries taking part in the REPARIS program as well as an observer from Kazakhstan and senior staff from the World Bank in Washington.

Senior Officials' Workshop, November 2011

To the REPARIS program page

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The workshop had three main objectives:

  • To update participants on recent developments in accounting and auditing at the global and EU levels;
  • To discuss how the reform of financial reporting was progressing in each country, how the REPARIS program was assisting the participating countries and, in particular, to agree the main features of the REPARIS work program for 2012.
  • To give policy-makers an insight into market participants’ views about the state of corporate financial reporting in the region



The workshop’s first session was devoted to recent developments in auditing. Juan Maria Arteagoitia from the European Commission's Audit Regulation Unit discussed how the current system of audit regulation in the EU had evolved and then went on to discuss some of the measures that were being discussed ahead of the official publication of the Commission's proposals to update the regulation of audit in the light of the financial crisis. These included auditor rotation and possible restrictions on audit firms’ non-audit activities as well changes to the rules governing the ownership of audit firms and the possible adoption of International Standards on Auditing (ISA).However, Mr Arteagoitia stressed that that it would probably be difficult to reach agreement between the Commission, the European Parliament and the member states over these changes, so that the new system would not be implemented for several years.

This was followed by a presentation from James Sylph from the International Federation of Accountants (IFAC) on how IFAC was responding to the financial and economic crisis and on the emerging issues facing the auditing profession. Mr Sylph emphasized that auditors should have the scope to use their judgment and that audit reports should move away from the present formalized statements to more informative assessments, containing more "shades of grey". He also thought that auditors would need to be involved in the emerging discussions over such issues as "integrated reporting" and the relationship between corporate governance and audit.

The second session concentrated on developments in financial reporting. Philippe Danjou from the IFRS Foundation described the IASB's current projects, which focused on revising the reporting standard for financial instruments (IAS 39/IFRS 9) and on reducing the differences between IFRS and US GAAP. The wish to minimize differences between international and US standards was complicating the process of adopting IFRS 9 and the IASB had tentatively decided to delay its application date to January 2015. This would allow the possibility of modifying it to take account of possible proposals from the US FASB and also to ensure that it was consistent with the final version of the reporting standard for insurance, IFRS 4. Mr Danjou also discussed the IASB’s future plans for the IFRS for SMEs, which has already been adopted by two REPARIS countries and is being considered for adoption by two more. The standard will be reviewed in 2012, and, after full discussion, a revised standard is likely to be issued in late 2013 or early 2014 with an application date of 2015.

Hans Schoen from the European Financial Reporting Advisory Group (EFRAG) then discussed the role of EFRAG in the process of endorsing reporting standards in the EU. Mr Schoen emphasized that EFRAG did not just include representatives from EU members but covered the whole of Europe. He said that EFRAG was currently looking for a new representative from Central or South-East Europe for its Technical Expert Group (TEG) and invited candidates from the REPARIS countries to put themselves forward. Mr Schon said that the European Commission had not yet asked EFRAG for its views on IFRS 9 and that EFRAG would only be looking at the new standard after it had been finalized by the IASB. On the IFRS for SMEs, Mr Schoen stressed that it was not currently part of the EU acquis. However, in his personal view, the European Commission’s proposals for a new Accounting Directive (published on 25 October) would simplify accounting requirements for smaller firms and would also resolve most of the conflicts between the IFRS for SMEs and the acquis.

In the second part of the workshop, there were three participatory sessions, moderated by staff from the CFRR, which discussed progress in financial reporting reform in the areas of:

  • transposing the EU acquis into national law;
  • progress in creating sustainable institutions for corporate financial reporting; and
  • developing the capacity for corporate financial reporting

Each of these sessions started with participants describing what progress they had made in their own countries, what main obstacles they had faced and what their main objectives were for the coming year. This was followed by a more general discussion as to how these experiences should be reflected in the future activities of the REPARIS program.

Several countries emphasized how useful it was to learn from others who were more advanced in the process of adopting the EU acquis. In this respect, Croatia’s experience was particularly useful, as several other countries were now trying to move from being "mostly aligned" with the acquis to being "fully aligned", which Croatia had found to be more difficult than it had initially expected.

On the institutional side, several countries faced difficult issues in securing enough funding for the required bodies (standards boards, professional bodies etc.) to attract and retain competent staff and also in ensuring that these bodies were sufficiently autonomous both from the government and from vested interests.

All countries agreed that raising the local capacity for financial reporting was a key issue, as without sufficient capacity, even the best-designed frameworks would yield little improvement in the quality of financial reporting. Moldova’s practice of holding local follow-up events after each REPARIS regional event appeared to work well and could be copied elsewhere. Participants welcomed the recent IFRS for SMEs train the trainers course and called for more if this type of event to be organized under REPARIS.

In the workshop’s final panel session, a panel of three Austrian business figures active in the region (from the Vienna Insurance Group, Bank Austria and KPMG) shared their views on the main issues facing financial reporting in the region. They agreed that the quality of financial reporting had recently improved significantly. However, although in many cases, international standards like IFRS were now in use, the understanding of them among the local accounting profession, investors and regulators still lagged behind. Measures to raise the capacity of practicing professional and industry regulators were therefore particularly important. Improved financial reporting for SMEs would also make it easier for banks to lend on the basis of business prospects rather than relying on collateral.

The workshop concluded with a presentation from CFRR staff of the main activities planned under REPARIS for 2012, including the ministerial conference to be held in the spring of 2012, as well as discussion about the longer-term future of the program, including the application to the European Commission for REPARIS to receive funding from the EU’s Instrument for Pre-Accession (IPA).


The meeting confirmed the central role played by the REPARIS program in supporting the process of financial reporting reform. In particular, the participants stressed that:

REPARIS provides a unique forum for learning lessons from other’s experience – both from their successes and also from their problems. This is particularly important now that REPARIS countries are moving on to the last, and most complex stage of aligning their reporting systems with the EU acquis.

REPARIS provides concrete help in raising national capacity for financial reporting. Senior officials especially welcomed the recent "train the trainers" event on IFRS for SMEs. They also stressed the importance of the lower profile (but just as important) assistance that REPARIS provides in securing the continued availability of up to date translations of international standards (IFRS and ISA) into local languages.

REPARIS helps them to be aware of emerging issues in financial reporting (such as "integrated reporting") which may not currently be part of the EU acquis but which are likely to be increasingly important in the next few years.

The CFRR will draw on the views and suggestions made at the workshop in implementing REPARIS activities in 2012. In particular, in 2012 REPARIS will focus more strongly on helping participants draw up concordance tables to identify the remaining divergences between local frameworks and the acquis. It will also prioritize capacity development and, building on the success of the "train the trainers" event on IFRS for SMEs, the CFRR will hold more events which are designed around giving participants the materials to "multiply" the event by passing it on to their local partners.

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