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Financial Reporting and Auditing workshop

1 June 2012, Vienna

The CFRR hosted a workshop for senior officials and other policy-makers from the countries participating in REPARIS to look in more detail at recent international developments in accounting and auditing and the challenges that the REPARIS countries face in implementing EU directives in corporate financial reporting.

To the REPARIS program page

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The first half of the workshop dealt with recent international developments in financial reporting. Arvind Wadhera, the acting head of the Audit Unit in the European Commission's Internal Market Directorate General (DG Markt) described the Commission's proposals to reform statutory audit. These would lead to significant changes in the structure of audit firms and have been the subject of lively discussion among market participants. Jon Grant from the International Audit and Assurance Standards Board (IAASB) described how the IAASB was working on a framework for audit quality that SMPs could use to improve the quality of their audits. This framework needed to take into account that managements, members of audit committees, investors and audit regulators had their own distinct views about which aspects of audit quality were the most important.

Philippe Danjou from the IASB presented a summary of the IASB's recent activities. He focused on the IASB's response to the financial crisis, especially the new standard on financial instruments (IFRS 9) and the convergence program to reduce the differences between IFRS and US national accounting standards. He also set out how the IASB intended to review the IFRS for SMEs standard, which had been issued in July 2009 and adopted in over 80 jurisdictions, including Bosnia and Herzegovina and Macedonia. The IASB was planning to ask for comments on the IFRS for SMEs in the next few months, with the aim of releasing an exposure draft of the revised standard in mid-2013. The updated standard would only be effective from 2015 at the earliest. Henri Olivier, the former Secretary General of FEE, then described the European Commission's proposals to simplify the EU's Accounting Directives, placing a particular focus on the relaxation of accounting requirements for very small ("micro") enterprises. Mr. Olivier concluded that most of the Commission's proposals to modify the Accounting Directive were likely to become EU law, but that the wish of many EU member states to maintain a reporting regime that was applicable to all limited liability companies meant that even micro enterprises would still be obliged to produce some financial reports.

The second half of the workshop was devoted to a discussion of how these changes affected the REPARIS countries and what approaches they were taking to the process of aligning their domestic legislative framework with the EU acquis. Several REPARIS countries are in the process of drafting new accounting and auditing laws (Macedonia, Serbia, Montenegro) and will use concordance tables to transpose the relevant parts of the acquis into their legislation. Many of the proposed changes from the Commission, notably on the Statutory Audit Directive, will pose additional challenges for the REPARIS countries, making their regional cooperation more important than ever.

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