Dondog.ppt - ICGFM The International Consortium on Governmental by wuyunqing

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									INTERNATIONAL CONSORTIUM ON GOVERNMENT
          FINANCIAL MANAGEMENT



INTERNATIONAL ACCOUNTING STANDARDS
    IMPLEMENTATION IN MONGOLIA

       Present by:
       L.Dondog - CPA, Ph.D., Professor.
       General Director, Department of Accounting Policy and
       Methodology of Ministry of Finance and Economy,
       President of Mongolian Institute of Certified Public Accountants
Mongolia


  Location:   Between Russia and China
  Area:       1.5 mln sq.km (6th in Asia, 18th in the World)
  Population: 2.4 million (with low density of 1.5 persons
              for sq.km)
                                                               2.
Mongolia


    Capital City: Ulaanbaatar
    Language:    Mongolian
    Religion:    More than 90% Tibetan Buddhist
                                                  3.
Mongolia
Year 1206
  Established Great
  Empire of Chinggis
  Khaan




                       4.
                               Mongolia
Year 1691
Manchu’s colonial oppression




                                          5.
                              Mongolia
Year 1911
The country’s independence under Bogda Khaan




                                               6.
Mongolia
    Year 1921

    Established
    People’s
    Republic of
    Mongolia




                7.
                                     Mongolia
Year 1990
The country rejected the centrally planned economy




                                                     8.
L.Dondog - CPA, Ph.D., Professor. Mongolia




 Adoption of Accounting Standards in
              Mongolia

         1. ADOPTION OF IAS
         2. ADOPTION OF IPSAS
         3. CONCLUSION AND COMMENTS

                                             9.
L.Dondog - CPA, Ph.D., Professor. Mongolia




            1. Adoption of IAS
                                             10.
L.Dondog - CPA, Ph.D., Professor.
Mongolia
                                               Adoption of IAS

          The history of double-entry
              accounting system


                                                      Mid of
                             1927
  Single entry               year   Double entry      the 90s



                                    Russian-model
                                    of accounting


                                                                11.
L.Dondog - CPA, Ph.D., Professor.Mongolia
                                            Adoption of IAS


 Year 1993 “Accounting Law”

 • IAS
 • Certified Public Accountant
 • Audit Firms
 • Professional Accounting Council

                                                        12.
    L.Dondog - CPA, Ph.D., Professor. Mongolia
                                                 Adoption of IAS
        Deep Crisis in Accounting Field
•      All types of instructions and regulations pursued in the
       centrally planned economy were repealed
•      A lack of knowledge of national staff on IAS resulted in
       inability to develop new instructions, forms and
       regulations to be followed
•      Training at universities and colleges were “in the wait
       listed”
•      The accountants in the field did not know what to do


                                                                  13.
L.Dondog - CPA, Ph.D., Professor. Mongolia
                                             Adoption of IAS
Assistance from International
Financial Organizations

                                   World
   Year 1993                                 Project on training
                                   Bank


                                  Asian
   Year 1994                                        Training
                              Development
                                   Bank       IAS was implemented in
                                                 three big national
                                                    companies
                                             (from 1994 through 1995)
                                                Started Accountants’
                                                       training
                                                  for Certification
                                             (from 1994 through 1995)


                                                                    14.
L.Dondog - CPA, Ph.D., Professor . Mongolia
                                              Adoption of IAS

   Tasks Achieved in 1993 and 1994

• Faculty members and accounting professionals
  possessed knowledge on IAS
• Training at universities and colleges continued
• Published manuals and textbooks based on IAS
• Training on preparation for CPA Examination


                                                          15.
L.Dondog - CPA, Ph.D., Professor . Mongolia
                                              Adoption of IAS

The Year of 1995
• Developed methodology on changing
  accounting system in line with IAS
• Reform to renew curriculum and syllabus of
  universities
• First CPAs at the national level were granted
  CPA title
• CPAs were licensed for public practice
                                                          16.
 L.Dondog - CPA, Ph.D., Professor . Mongolia
                                               Adoption of IAS

The Year of 1996


• Established Mongolian Institute of CPAs
• The reform to renew curriculum and
  syllabus was successfully implemented



                                                           17.
L.Dondog - CPA, Ph.D., Professor. Mongolia
                                             Adoption of IAS

The Year of 1997

• 18 candidates were granted CPA title who was
  evaluated by the team of lecturers from USA
  and the Philippines
• The Law on Auditing was approved
• IAS (1995) was translated
• ISA (1996) was translated

                                                         18.
L.Dondog - CPA, Ph.D., Professor . Mongolia
                                              Adoption of IAS


Most of the accountants has trained
on IAS from 1993 through 2001

             • universities
             • professional bodies




                                                          19.
 L.Dondog - CPA, Ph.D., Professor . Mongolia
                                               Adoption of IAS



Nationwide Accounting Review:

 • The rate of IAS adoption is 27.1%
 • About 40% of enterprises do not
   prepare financial statements



                                                           20.
L.Dondog - CPA, Ph.D., Professor . Mongolia
                                              Adoption of IAS


Government:

• Amendment to Accounting Law
• The Government Program on Development of
  Accounting Framework from 2002 to 2004
• 2002 – The Year identified as developing
  accounting practices


                                                          21.
 L.Dondog - CPA, Ph.D., Professor . Mongolia
                                               Adoption of IAS

Importance of the Year for
Developing Accountancy
 •    Attracted attention all levels of management
 •    Improvement of accountants’ enthusiasm
 •    Acceleration in the speed of implementation of the
      resolutions issued by the Government and professional
      organizations
 •    Increased aid and assistance from international
      organizations

                                                           22.
 L.Dondog - CPA, Ph.D., Professor. Mongolia
                                              Adoption of IAS


As of the end of 2003
70% of all business enterprises adopted IAS
                  Among them:
                  - State owned enterprises      100%
                  - Shareholding companies       100%




                                                          23.
L.Dondog - CPA, Ph.D., Professor . Mongolia




      2. Adoption of IPSAS
                                              24.
L.Dondog - CPA, Ph.D., Professor. Mongolia

                                             Adoption of IPSAS


World Bank
Technical Assistance (1999)


 Asian Development Bank
“Public Sector Reform” project


                                                           25.
L.Dondog - CPA, Ph.D., Professor . Mongolia

                                              Adoption of IPSAS


Public Sector Finance Act (2002)


     Accrual Basis
     Budget Entities – output based budgeting
     State Audit


                                                            26.
L.Dondog - CPA, Ph.D., Professor . Mongolia

                                              Adoption of IPSAS



•Methodology on Application of IPSAS in Budget
Entities (2002)
•Training – 90% of the accountants
•Recommendations




                                                            27.
L.Dondog - CPA, Ph.D., Professor . Mongolia

                                              Adoption of IPSAS


•    Application of IPSAS started from January 1,
     2003
•    Budget entities have encountered difficulties in
     preparation of Financial Statements initially in the
     1st quarter of 2003
•    Most of the budget entities issued Financial
     Statements in 2nd quarter of 2003
•    The process had become smooth from 3rd quarter
     of 2003
                                                            28.
L.Dondog - CPA, Ph.D., Professor . Mongolia

                                              Adoption of IPSAS



Central Treasury – Applied modified accrual basis
of accounting from 2003
           Not prepared Consolidated Financial Statements of
           the Government in 2003




                                                            29.
L.Dondog - CPA, Ph.D., Professor . Mongolia

                                              Adoption of IPSAS



• State property count and revaluation
• Government Financial Management
  and Information System (GFMIS) from 2003
• Free Balance – software




                                                            30.
L.Dondog - CPA, Ph.D., Professor . Mongolia




            Government of Mongolia
                          Government Financial Management
                            and Information System (GFMIS)
                                                FreeBalance




                                                         31.
                              1.   MOFE, Ulaanbaatar city Treasury Office;
                              2.   All 21 Aimags RTO’s;


                    RTO
RTO

       RTO
                          Central Treasury         RTO

                                                             RTO
 RTO          RTO                                  RTO

                               RTO
        RTO
                                             RTO
                    RTO

                                                                    34.
 L.Dondog - CPA, Ph.D., Professor . Mongolia

                                               Conclusion


Conclusion

• Justified the applicability of IFRS and IPSAS in
  the practice
• Transition process should commence at the
  same time throughout the country covering all
  sectors
• Specify the accounting year

                                                      35.
 L.Dondog - CPA, Ph.D., Professor . Mongolia

                                               Comments

Comments

 • Publish the standard in English, Russian,
   German, Spanish and Chinese
 • Simplify writing style of the standard
 • Input of regional international associations to
   the standards


                                                     36.
THANK YOU FOR YOUR
     ATTENTION

								
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