1. Swiss-Polish Cooperation Program Financial Reporting Technical Assistance Project David Cairns and John Hegarty World Bank Centre for Financial Reporting Reform Warsaw, 11 December 2009

2. Swiss-Polish Financial Reporting Technical Assistance Project Presentation Outline »The World Bank’s Centre for Financial Reporting Reform »The regional program for new EU Member States »The project for Poland

3. Swiss-Polish Financial Reporting Technical Assistance Project Centre for Financial Reporting Reform »World Bank’s Europe and Central Asia (ECA) Region »Responsible for all of ECA’s corporate sector financial reporting activities »Supports similar activities in other regions »Mix of skills and experience: »financial reporting regulation and practice »in-depth knowledge of the acquis communautaire »knowledge management and distance learning »drawing on a network of skills

4. Swiss-Polish Financial Reporting Technical Assistance Project Regional program for new Member States »High quality financial reporting an essential underpinning for cohesion and competitiveness in the Single Market »Extensive legal and regulatory reform already undertaken as part of the EU accession process, to comply with the relevant acquis »Further strengthening of institutional and human capacity required for effective implementation and enforcement »The acquis is a moving target, tight deadlines »Financing gap

5. Swiss-Polish Financial Reporting Technical Assistance Project Regional program for new Member States »Implementation agreements with Member States which draw on Swiss Enlargement Contribution funding »Activities at both national and regional level »Complement interventions at Member State level with joint activities to develop common responses to common challenges, exploit synergies »Reinforce, not replace Member State involvement in EU-level discussions and activities »Facilitate speedy replication of good practices developed elsewhere »Flexible programmatic approach »General framework »Annual work programs

6. Swiss-Polish Financial Reporting Technical Assistance Project Key features of the program »Member State ownership and leadership »Comprehensive multi-year program, rather than fragmented individual projects »Beyond compliance to cohesion, competitiveness »Robust results framework, monitoring, evaluation »Integration of policy development, program design and implementation, financing, and accountability to the Member States »A program for partnership, not projects »Program management from WB Office Vienna

7. Swiss-Polish Financial Reporting Technical Assistance Project European Commissioner McCreevy We very much welcome the contribution of the World Bank to promote the use of international standards on auditing in the Member States that joined the European Union after 2004. The work of the World Bank greatly contributes to the effective implementation and enforcement of the EU acquis, in particular with respect to public oversight and external quality assurance systems.

8. Swiss-Polish Financial Reporting Technical Assistance Project The simple logic “No transparency, no trust; no trust, no credit; no credit, no investment; no investment, no growth! So there is a simple logic: financial reporting is an essential building block for financial intermediation, foreign investment, and sustainable economic development.”

9. Swiss-Polish Financial Reporting Technical Assistance Project Financial reporting A fundamental foundation Securities Regulation Banking Supervision Accounting & Auditing Corporate Governance Insurance Supervision Insolvency & Creditor Rights

10. Swiss-Polish Financial Reporting Technical Assistance Project Importance of high quality financial reporting Accounting and Auditing Development of Capital Markets Job Creation Financial Stability Private Sector Growth Financial Sector Development Improved Access to Credit Financial Information ECONOMIC GROWTH

11. Swiss-Polish Financial Reporting Technical Assistance Project The project for Poland »Implementing: »a public oversight system for statutory auditors »a quality assurance system for statutory auditors »Introducing clarified International Standards on Auditing (ISA) »Building capacity for International Financial Reporting Standards (IFRS) »Resolving the relationship between financial reporting and tax accounting »Continuing education for professional accountants »English language training

12. Swiss-Polish Financial Reporting Technical Assistance Project … it’s not just about IFRSs and ISAs … Statutory & Governance Framework Monitoring & Enforcement Education & Training Accounting Profession & Ethics Accounting Standards Auditing Standards

13. Swiss-Polish Financial Reporting Technical Assistance Project … but about strengthening all the pillars … Statutory & Governance Framework Monitoring & Enforcement Education & Training Accounting Profession & Ethics Accounting Standards Auditing Standards

14. Swiss-Polish Financial Reporting Technical Assistance Project … a broad vision of financial reporting … »High quality financial statements that meet the needs of: »current and potential investors »other providers of finance »tax authorities »other regulatory and supervisory authorities »those responsible for national statistics and macro-economic data

15. Swiss-Polish Financial Reporting Technical Assistance Project … built on a single foundation … Financial reports as the basis for national statistics Financial reports to capital markets  Accounting Financial reports for prudential regulation Financial reports to lending banks Financial reports for taxation purposes

16. Swiss-Polish Financial Reporting Technical Assistance Project … and linking the needs of different users Financial statements Investors and creditors in capital markets Lending banks National statisticians Prudential regulators Tax authorities Public interest

17. Swiss-Polish Financial Reporting Technical Assistance Project Delivering the project for Poland »Regional communities of practice »sharing experiences »learning from experts from the European Commission and around Europe (and elsewhere) »exploring common needs »shared research on shared issues »identifying potential synergies »seeking common solutions

18. Swiss-Polish Financial Reporting Technical Assistance Project Delivering the project for Poland »High quality and practical in-country training based on national needs assessments »clarified ISAs »IFRS »IFRS for SMEs »IFRS for regulators »Development by international experts »Delivery by international and national experts in local languages

19. Swiss-Polish Financial Reporting Technical Assistance Project Delivering the project for Poland »Practical and high quality tools »IT systems and methodologies for public oversight »manuals and methodologies for quality assurance »audit software based on clarified ISAs »an e-learning platform for continuing education

20. www.worldbank.org/cfrr

21. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Implementing a public oversight system for statutory auditors Activity2009/1020112012 and beyond Institutional needs assessment Audit oversight workshop Support to the administrative capacity Public register of auditors International conference on public oversight Regional community of practice In-country training for members and staff of the public oversight body Purpose of the component Support the implementation of an effective system of public oversight of statutory auditors that complies with the Eighth Company Law Directive in a manner that is cost effective and reflects the characteristics and needs of participating Member States. Target GroupMembers and staff of the public oversight body as well as inspectors undertaking the external quality assurance reviews.

22. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Implementing a quality assurance system for statutory auditors Activity2009/1020112012 and beyond Institutional needs assessment Audit quality assurance workshop ISQC1 manual National outreach program Support to the administrative capacity Regional community of practice In-country training for quality assurance personnel Purpose of the component Promote improvements in audit quality through implementation of an enhanced and sustainable system of external quality assurance that will deliver high quality inspections consistent with the requirements of the Eighth Directive. Target GroupMembers and staff of the public oversight body; inspectors undertaking the external quality assurance reviews; and individual auditors and audit firms.

23. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Adoption and implementation of ISA Activity2009/1020112012 and beyond Regional community of practice on the adoption and implementation of ISA National needs assessment National delivery of ISA training Purpose of the component 1.Achieve among statutory auditors and audit firms a broadly based and in-depth understanding of International Standards on Auditing (ISA) and their application in practice; 2.Achieve a similar level of understanding among external quality assurance “inspectors”; and 3.Achieve a high level of understanding of ISA among members of the public oversight body and relevant staff members at the Ministry of Finance. Target GroupMembers and staff of the public oversight body; Ministry of Finance; and members, staff and trainers of the auditors’ professional association.

24. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Enhancing the relationship between financial and tax accounting Activity2009/1020112012 and beyond International conference International training In-depth study of the advantages and disadvantages of the existing relationships between financial and tax accounting systems Assessment of in-country training needs and design of the training program In-country training for tax inspectors and tax policy makers Purpose of the component Assist policymakers in reviewing and optimizing the existing tax accounting system; enhance the capacity of tax authorities in implementing reforms resulting form policy choices. Target GroupMinistry of Finance, tax authorities, and accounting standard setting body.

25. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Institutional capacity building regarding financial reporting Activity2009/1020112012 and beyond Regional community of practice on the application and enforcement of IFRS in the financial sector Foundation IFRS course National needs assessment National IFRS training course delivery Purpose of the component Enhance capacity to participate in policymaking regarding IFRS at the European level and enforce IFRS in a number of stakeholder groups (see Target Group). Target GroupMinistry of Finance, financial and capital market supervisory authorities, public oversight body, accountants’ and auditors’ professional associations, etc.

26. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Continuing education for accounting professionals Activity2009/1020112012 and beyond Agreement on ToR for the development of the technical specifications of the e- learning platform Agreement on ToR for the review of the curriculum and authorization procedures for the continuing education programs Procurement for the e-learning platform, award of the contract, development of the platform Consultations on findings of the review of the curriculum and authorization procedures, finalization of the report, and agreement to relevant changes Further activities’ specifics will be defined in the annual work programs Purpose of the component 1.Facilitate the delivery of high-quality continuing education to members of the accountants’ and auditors’ professional associations; and 2.Monitor compliance with continuing education requirements. Target GroupAccountants’ and auditors’ professional associations.

27. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Specialized English language and communications training Activity2009/1020112012 and beyond Assessment of training needs Finalization of course design Delivery of the training course Purpose of the component Provide participants the opportunity to attend foundation and specialized English language training, as well as training in communications, presentations, and negotiations skills. Target GroupMinistry of Finance, public oversight body, accountants’ and auditors’ professional associations

28. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Regulatory framework Activity2009/1020112012 and beyond Report 1 – Design and methodology for preparing an annual overview of the accountancy market Training covering legal drafting techniques Report 2 – Specifics will be defined in the annual work programs Report 3 – Specifics will be defined in the annual work programs Report 4 – Specifics will be defined in the annual work programs Purpose of the component Support policymakers in the area of accounting and auditing. It involves (i) researching financial reporting issues to feed into policymaking activities with a view to identify areas where better regulation and/or enforcement would contribute to a better business environment and (ii) providing hands-on technical assistance. Target GroupProject stakeholders, SECO, all participating countries, European Commission, etc.

29. Swiss-Polish Financial Reporting Technical Assistance Project Thematic work programs Monitoring and evaluation Activity2009/1020112012 and beyond Ongoing monitoring and evaluation system measuring implementation progress Accounting and Auditing ROSC Purpose of the component Monitor and evaluate the effectiveness of the program Target GroupProject stakeholders, SECO, all participating countries, European Commission, etc.