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EU-REPARIS Under the Enterprise Development and Innovation Facility

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Presentation on theme: "EU-REPARIS Under the Enterprise Development and Innovation Facility"— Presentation transcript:

1 EU-REPARIS Under the Enterprise Development and Innovation Facility
Current engagement with Western Balkan countries through REPARIS CFR: what it is and why it is important REPARIS: what do we do Relevance to SMEs Progress to date Proposed new EU-REPARIS: demand and need for it World Bank CFRR: role and added value Henri Fortin, Head, World Bank CFRR Multi-beneficiary Private Sector Programming Working Group 10th SEEIC Meeting - RCC - Sarajevo, 25 April 2012

2 Present briefly EU-REPARIS to Private Sector Programming Working Group
Objectives Present briefly EU-REPARIS to Private Sector Programming Working Group Answer questions from the WG The European Union’s Regional IPA Programme for the Western Balkans Accounting Reform and Institutional Strengthening for SME Development in the Western Balkans EU-REPARIS Under the Enterprise Development & Innovation Facility Project concept (revised April 2012) Prepared by the World Bank Centre for Financial Reporting Reform

3 Benefits of financial reporting for SMEs
“No transparency, no trust no trust, no credit no credit, no investment no investment, no growth” Martin Gruell, CFO Raiffeisen International REPARIS Ministerial Conference, Vienna, 2006 A modern financial reporting system helps create a business climate that supports sustainable growth and can lower the barriers facing high-potential SMEs Key for SMEs seeking venture capital investors Contributes to higher credibility vis-à-vis lenders and enhanced credit quality of SMEs A core element of the modern language of business Simple systems with clear relationship to tax reporting help reduce the burden of tax compliance on local SMEs

4 EU-REPARIS and SMEs Adapting country systems to provide tailored solutions to SMEs Building countrywide capacity for accounting & tax professional services to SMEs Equipping SME with skills to translate business ideas into fundable, sustainable proposals Pilot project on SME financial reporting in the context of loan applications Bankability and investability  Cost of doing business 

Fully-aligned objectives: improving access to finance and the business environment for high-potential SMEs Activities could be expanded to include TA in related areas (e.g., corporate governance) Closely integrated through Technical advice to other EDIF components/activities on issues involving financial reporting and auditing Implementation alignment and synergies Close coordination with and regular reporting to EDIF partners Agreed-upon arrangements at EDIF level will be strictly applied Vienna facilities available for EDIF regional meetings Shared or consolidated networks of participating-country experts/officials

6 Attachment: Presentation to RCI Steering Committee on EU-REPARIS 13 December 2011, RCC Sarajevo

7 Current program for W. Balkan countries
Western Balkan countries: EU enlargement countries Implementing the acquis communautaire in the area of corporate financial reporting Since 2008: “REPARIS” program to support Accounting Reform and Institutional Strengthening in W. Balkans Regional activities and in-country engagement Significant results to date Increased country ownership and commitment for reform Enhanced capacity Laws being drafted, institutions established / strengthened Transposition and implementation are happening REPARIS program (funded by Austria, Lux. and Switzerland) comes to an end in 2013 Presentation to RCI SC on 13/12/11

8 Financial Reporting: What and Why
Corporate Financial Reporting: essential to competitiveness and sustainable economic development No numbers – no knowledge: numbers tell the story of what happened and what is planned, for all enterprises Same number system is needed to compare one company with another and one year with the next A financial reporting system is needed to set clear requirements on reporting by enterprises Institutional arrangements for auditors and accountants to ensure quality/integrity of audit and accounting services to enterprises Standards ensure that the same transactions accounted for using the same approach EU standards provide a common approach for single market and single economic space Presentation to RCI SC on 13/12/11

9 Benefits of sound corporate financial reporting
Growth and employment generation Improved public administration Financial stability and development Investors Banks Statistics office Financial sector regulators Tax authorities Public at large Reliable, transparent and comparable accounting and financial reporting While avoiding undue costs Presentation to RCI SC on 13/12/11

10 CFR and Small and medium enterprises
Ensure that the country systems provide tailored solutions for SMEs and small and medium accounting/audit practices Avoiding a one-size-fits-all approach CFR not only about large corporations and fin. institutions EU focus on simplification and “think small first” Training of trainers on relevant standards Building countrywide capacity to provide SMEs with professional services in accounting and tax returns Equipping SME with skills to help them translate business ideas into fundable, sustainable proposals Increased bankability / ability to secure capital funding from private investors, donors, etc. Reduced cost of doing business Presentation to RCI SC on 13/12/11

11 EU-REPARIS: Objectives
Support participating countries in Efforts toward completion of acquis transposition Developing capacity to implement the acquis and thus achieve quality financial reporting and audit practice Practitioners’ capacity to apply EU standards Regulators’ capacity to enforcement / supervise Policymakers’ capacity to adapt the country system to evolving EU framework Financial reporting literacy among the business community Support the process by which EU monitor progress in implementation of the acquis Presentation to RCI SC on 13/12/11

12 EU-REPARIS: Focus areas
Help countries develop a record of successful implementation of the acquis Policy advice and technical support in partnership with Commission / DG Internal Market and Services and Other institutions of the EU (EFRAG, EBA, etc.) Draw on the experience of countries that have already completed the process (existing member states, Croatia and other participating countries) Build on the work completed and achievements of current REPARIS program, ensuring the reform effort is sustained Presentation to RCI SC on 13/12/11

13 EU-REPARIS: Overall approach
Presentation to RCI SC on 13/12/11 EU acquis communautaire International standards, other good practices Effective, sustainable implementation Peer learning and tailored support Helping participating countries gain a better understanding of the EU acquis and facilitating the partnerships and dialogue with peer institutions within the EU and globally required to underpin sustainability Enabling the identification, development and replication of a common approach to resolving shared reform challenges Assist the participating countries in implementing reforms successfully. Knowledge sharing Lessons from successful implementation in participating countries

14 Role of World Bank-CFRR
World Bank committed to supporting enlargement countries CFRR was set up to provide specific expertise in corporate financial reporting Other programs implemented by CFRR support the ongoing efforts in W. Balkans Financial Reform Technical Assistance Program for member states that joined the EU in 2004 – knowledge cascade opportunity ROSC program CFRR management and administration capacity Expertise in implementing reform to align financial reporting systems with the acquis Close relations with relevant institutions of the EU and international organizations Presentation to RCI SC on 13/12/11

15 Concluding thoughts Well-functioning financial reporting systems:
key to competitive market economies Support free movement of capital, single economic space and EU integration W. Balkan countries have started the process to implement the CFR elements of the acquis, with some successes to date More needs to be done – reform effort needs to be sustained CFRR: strategic partner of W. Balkan countries and EC Proposed EU-REPARIS: Draws and builds on existing program Increased focus on implementation Flexible and targeted to produce tangible benefits for each country and W. Balkans as a whole Presentation to RCI SC on 13/12/11 END

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