At the conference, ministers and senior officials reviewed the progress that their countries have made in building and improving their corporate financial reporting systems. As part of their efforts to support economic growth and to integrate more closely with the EU, most countries in the program have introduced new accounting laws. They are also strengthening their educational systems and raising the capacity of their local accounting professions. Several countries are now moving to the next stage of reform by setting up systems of public oversight and quality control to ensure that accounting and auditing norms are implemented effectively.
Ministers and senior officials also discussed how improved financial reporting helps reduce the barriers to business investment, especially for small and medium-sized enterprises (SMEs), thus helping to boost competitiveness and economic growth. They then looked ahead, considering what further measures they need to take to adjust their accounting laws in the light of the EU's new accounting directive, especially its special provisions for microenterprises, and also how to improve quality assurance and the public oversight of statutory audits.
In his opening address, Philippe Le Houérou, Vice-President of the World Bank for Europe and Central Asia, acknowledged that the financial crisis has left the countries of the region with higher levels of public debt, weakened financial sectors, and historically high levels of unemployment. The crisis unveiled weaknesses that called for deep structural reforms. In response to these challenges, one of the main pillars of the World Bank's strategy has been support for reforms to improve competitiveness. Mr. Le Houérou said "The work of REPARIS on financial reporting is critical to the competitiveness agenda. It is also an important aspect of good governance, which requires transparency and integrity both in the public and the private sector. Good public and corporate governance is not a luxury, but a necessity for sustainable growth."
"One program cannot tackle all the challenges we are facing. It must be selective to use its limited resources most effectively to deliver upon its agreed objectives. REPARIS is able to achieve just that. REPARIS helps to build and strengthen institutions to make the financial system more stable and to create a business climate conducive to promote growth and employment.", highlighted Andreas Schieder, State Secretary in the Austrian Ministry of Finance in his opening remarks.
Ms. Biljana Šcekic, Deputy Minister of Finance of Montenegro, underlined the following: "Montenegro has been a part of the REPARIS program from its very beginning, and as a candidate country of the European Union, we are serious about completing our Accounting and Audit Reform journey. This is important [...] to deliver a climate that will enable our small young country to compete for investment and jobs in the new reality that is the Europe of today."
Gerhard Schumann-Hitzler from the European Commission's Directorate General for Enlargement also discussed the challenges that the countries of the region were currently facing and the need for them to implement a wide range of reforms to raise their competitiveness and stimulate growth. He emphasized the importance of regional initiatives like REPARIS in improving the business environment, especially for SMEs, in the countries of the Western Balkans. These changes also help to prepare the participating countries for EU accession and, in particular, to meet the challenge of successfully operating in the EU's single market. As a concrete sign of the EU's support, the Commission was proposing to allocate funds under the new Enterprise Development and Innovation Facility for the Western Balkans to REPARIS, so allowing the program to continue beyond 2014.
Henri Fortin, the head of the CFRR, summed up the achievements of the REPARIS program since 2009 and outlined four future priorities for the program:
- improving accounting education systems, links between universities and the profession, and continuing professional education;
- developing more relevant accounting standards for SMEs and, especially, micro-sized enterprises;
- improving the links between financial reporting and reporting for taxation purposes; and
- implementing effective systems of quality assurance and public oversight for statutory auditors.
Welcoming Mr. Schumann-Hitzler's comments, Mr. Fortin concluded that the prospect of funding from the European Commission for a successor program to REPARIS would allow the participating countries to make further progress towards their shared objective of implementing corporate financial reporting frameworks that were fully aligned with those in the EU.
Three speakers from international regulatory and standard-setting bodies –the International Accounting Standards Board (IASB) the International Federation of Accountants (IFAC) and the Financial Stability Board (FSB) – described how the global environment governing financial regulation in general and corporate financial reporting in particular was evolving in response to the issues raised by the financial crisis. Philippe Danjou, a board member of the IASB, emphasized how the G20 and the IASB were seeking to learn the lessons of the financial crisis, in particular, by improving the accounting treatment of financial instruments. Although better financial reporting could not abolish the economic cycle, it could, by making public more of the exposures and risks that agents were taking, reduce the danger that financial imbalances would provoke another systemic crisis. However, for the REPARIS counties, the rapid evolution of reporting standards makes it more difficult for them to bring their reporting systems into line with those in the EU, as they are effectively chasing a moving target. In addition, as IFAC President Göran Tidström stressed, as well as drawing up new laws and regulations, countries need to develop strong institutions for financial reporting frameworks to work well in practice. This includes strong professional accountancy organizations. Regional programs such as REPARIS help the participating countries take such a broad view of the reform process and learn from each other's experiences.