Reports on the Observance of Standards and Codes by uae76818

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									Reports on the Observance of
Standards and Codes (ROSC)

               Azerbaijan


                       John Hegarty
        Manager, Financial Management
                         Jon Hooper
        Financial Management Specialist
         Europe and Central Asia Region



                   THE WORLD BANK
                                        ROSC - Azerbaijan

Background:
The Need for a Strengthened
International Financial Architecture
1990s – Emerging Market Crises and contagion effects

                                     Philippines
                                     Malaysia
                                     Hong Kong
East Asia (Thailand)
                                     Indonesia
                                     Taiwan
                                     South Korea
                              ROSC - Azerbaijan

Background:
The Need for a Strengthened
International Financial Architecture



Shift from reactive     Pre-emptive
crisis resolution       crisis
                        prevention
                                        ROSC - Azerbaijan

Background:
Origins of the ROSC program

The G-22 Reports: focus on crisis prevention


- Transparency and Accountability
  (Led to ROSC program)
- Strengthening National Financial Systems
- Government guarantees to the private sector
                                                    ROSC - Azerbaijan


    The ROSC program:
    Comprises 12 Fundamental Standards
Insolvency &      Corporate     Insurance       Banking     Securities
Creditor Rights   Governance   Supervision   Supervision   Regulation




                                                     Accounting &
                                                     Auditing
                                       ROSC - Azerbaijan


Importance of High Quality
Accounting and Auditing
                 ECONOMIC GROWTH


                   Development of
                   Capital Markets
                                        Improved
 Job Creation
                                      Access to Credit



Private Sector      Accounting       Financial Sector
    Growth             and             Development
                     Auditing


                                     Financial Information

                     Financial
                      Stability
                                                ROSC - Azerbaijan


A&A ROSC: Assessing the Quality of
the A&A Framework
                       Economic Context
 Factual Assessment




                      Legal & Institutional




                                                        Perceptions
                          Framework

                         Accounting in
                            Practice

                          Auditing in
                           Practice




                          FINDINGS            Recommendations
                                    ROSC - Azerbaijan


Azerbaijan ROSC A&A: Key Findings

   Promote:                Avoid:
   - Access to credit,
     particularly for
     SMEs
   - Development of
     capital markets
   - Development of
     the private sector
   - Implementation of
     international best
     practice regulation
                                               ROSC - Azerbaijan


A&A ROSC: Assessing the Quality of
the A&A Framework
Benchmarks:
  Good international practice
                                International Standards
                                on Auditing




International Financial            Acquis communautaire
Reporting Standards
                                                    ROSC - Azerbaijan



A&A ROSC: Global Coverage


                                Europe and
                                Central Asia                East Asia



                      Middle East and          South Asia
                        North Africa

  Latin America and
    the Caribbean            Africa
                                   ROSC - Azerbaijan


A&A ROSC:   in Europe and Central Asia
                                                            ROSC - Azerbaijan


    ROSC is a the first step in
    the process of reform




Accounting    Statutory   Monitoring &   Education &    Accounting     Auditing
Standards    Framework    Enforcement      Training    Profession &   Standards
                                                          Ethics
                                                            ROSC - Azerbaijan


    All supporting pillars
    need to be strengthened




Accounting    Statutory   Monitoring &   Education &    Accounting     Auditing
Standards    Framework    Enforcement      Training    Profession &   Standards
                                                          Ethics
                                                ROSC - Azerbaijan


Azerbaijan ROSC A&A: Key Findings
   - Azerbaijan’s increasing global integration and
     access to global financial markets makes increased
     transparency essential
   - Significant recent progress, in particular, the new
     Law on Accounting of 2004
   - Implementation of Law on Accounting poses very
     significant challenges
   - Fragmented regulation and enforcement of
     accounting regulations must be harmonized
   - Statutory framework for audit is outdated and
     inconsistent
   - Major need for re-tooling, education and training of
     accountants and auditors
                                                     ROSC - Azerbaijan

Azerbaijan ROSC A&A:
Key Recommendations
   - Measures to assist the implementation of Law on
     Accounting including:
      - embedding IFRS in Public Interest Entities
      - permanent resource to translate IFRS, develop
      National Accounting Standards and support both
      - Transition training program for IFRS and NAS
   - Harmonization program of fragmented regulation
     and enforcement of accounting regulations
   - Introduction of a new, coherent, Law on Audit;
     reform and development of Chamber of Auditors
   - Major program of re-tooling, education and training
     of accountants and auditors
                            ROSC - Azerbaijan


Implementing the
ROSC Recommendations

                  IAIS
      IFAC
                             World Bank


                National
  IASB          Steering
               Committee,
               led by MoF


                              European
 Development
                            Commission &
   Partners
                             Committees
                 Basel
               Committee
                                                      ROSC - Azerbaijan


Azerbaijan ROSC A&A: Implementation
   - Ministry of Finance and World Bank initiative, the
     Corporate and Public Sector Accountability Project
     (CAPSAP)
   - Will include 3 main components:
      - Corporate sector accounting reform, including
      embedding IFRS in Public Interest Entities, assisting the
      introduction of a new Law on Audit; reform and development
      of Chamber of Auditors
      - Public sector accounting reform (separate to this report)
      - Azerbaijan Center for Professional Accounting
      Training, Education and Research (ACPATER), a
      permanent resource to translate IFRS, develop National
      Accounting Standards, support a transition training program
      for IFRS and NAS and support a major program of re-tooling
      accountants, auditors and accounting education and training
      providers

								
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