On October 10, 2006, the Albanian National Steering Committee (NSC) meeting in Tirana brought together a large group of experts and professionals involved in corporate financial reporting. Mr. Nadir Mohammed, Country Manager of the World Bank Office in Albania and Mr. Hysen Cela, Vice-chairman of the NSC welcomed the participants, explaining that members of the World Bank team, Mr. Erik van der Plaats and Mr. David Nagy, would present findings and recommendations from the draft Albanian Report on Observance of Standards and Codes (ROSC) in Accounting and Auditing (A&A).

The ROSC reports serve as useful diagnostic tools and benchmarks which countries can use to assess their progress in the field of Accounting and Auditing. The World Bank’s ROSC A&A module helps policy makers establish a corporate financial reporting environment conducive to sustainable economic growth and private sector development. In particular, the International Monetary Fund (IMF) and the World Bank are working jointly to assess adherence to financial sector standards as part of the Financial Sector Assessment Program (FSAP), and the ROSCs.

A keynote address on the ROSC was delivered by Mr. Erik van der Plaats, Senior Financial Management Specialist from the Europe and Central Asia region of the World Bank. Mr. van der Plaats noted that high quality financial reporting is important not only for avoiding crisis, but is also important in a proactive sense: to promote investment and domestic savings, to develop capital markets and improve access to credit. He explained that the ROSC report measures the status of Albania in implementing the relevant benchmarks, in particular the International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). In addition, the ROSC report has also benchmarked the relevant portions of the European Union’s body of law related to accounting and financial reporting (e.g. 1st, 2nd, 4th, 7th and 8th Company law Directives).

Mr. van der Plaats further indicated specific strengths and weaknesses of the institutional and regulatory frameworks for supporting high quality accounting and auditing practices in Albania. Last but not least, the Albanian ROSC report forms the analytical and diagnostic underpinnings for a regional project, “The Road to Europe – Program of Accounting Reform and Institutional Strengthening” (REPARIS). Mr. van der Plaats informed the NSC members that once the Bank receives approval from the Albanian Ministry of Finance to publish the ROSC, the Bank would organize a ROSC dissemanination conference. (Presentation of Mr. Erik van der Plaats)

Next, Mr. David Nagy, Financial Management Consultant of the World Bank explained that the ROSC assessment identifies the next challenges that Albania may wish to to tackle in order to achieve its goal of building a sound financial reporting framework. Mr. Nagy underlined that it is essential for the high-level policy recommendations of the ROSC report to be transformed into a concrete, time-bound action plan that can be effectively implemented. Under the REPARIS program, Bosnia and Herzegovina, Bulgaria, FYR Macedonia, Romania and other countries in the region have already developed detailed Country Strategy and Action Plans (CAP) aimed at implementing the ROSC recommendations on corporate financial reporting. The World Bank would be privileged to work with the Albanian Steering Committee to draft an Albanian CAP. Mr. Nagy concluded his presentation with a strong message: “…without reliable and high quality financial statements, a market economy cannot work efficiently.  If markets cannot work efficiently—of course—there is less or no economic growth, which results in less or no reduction in poverty.” (Presentation of Mr. David Nagy)

In his concluding remarks, Mr. Ylber Bezo, Director of Accounting Department at the Ministry of Finance noted that enhancing the quality of corporate financial reporting is a key challenge for Albania. He agreed that the World Bank’s draft ROSC report set forth a series of strategic policy recommendations aimed at bridging gaps and creating a robust accounting and auditing environment. Mr. Bezo stated that the Albanian Ministry of Finance will likely approve the ROSC report to be published on the World Bank website by the end of October. Mr. Bezo also requested further support from the World Bank in the form of   assistance for the Steering Committee in drafting the Albanian Country Strategy and Action Plan. Furthermore he asserted that the implementation of the World Bank’s ROSC recommendations will align Albanian corporate financial reporting with the EU requirements.. Mr. Bezo concluded that he would welcome World Bank assistance in discussions with the donor community to secure the necessary grant funding to implement the country strategy and action plan to enhance the corporate financial reporting.