1. From Diagnostic to Reform
Washington DC – April 4, 2006
David Nagy
Financial Management Consultant
Europe and Central Asia Region
THE WORLD BANK

2. East Asia (Thailand) Background: Philippines Malaysia Hong Kong
Need for a Strengthened International Architecture
Background:
1990s – Emerging Market Crises and contagion effects
East Asia (Thailand)
Philippines
Malaysia
Hong Kong
Indonesia
Taiwan
South Korea

3. The Financial Sector Assessment Program—FSAP
FSAP and ROSC
Background:
The G-7, World Bank, IMF: focus on crisis prevention
The Financial Sector Assessment Program—FSAP
The Reports on the Observance of Standards and Codes—ROSCs

4. Aim of the A&A ROSC Objectives: Avoid:
Origins of the ROSC Program
Aim of the A&A ROSC
Objectives:
Avoid:
help policy makers to establish a corporate financial reporting environment conducive to sustainable economic growth and private sector development
- provide more and better information to markets so that they can price risks more appropriately

5. The Role of the World Bank
Background:
The role of the World Bank: Fight against poverty!
No reliable financial statements = no efficiency = no economic growth = no reduction in poverty.

6. Assessing the Quality of the A&A Framework
Benchmarks for Accounting and Auditing ROSC
Assessing the Quality of the A&A Framework
International Financial Reporting Standards
International Standards
on Auditing
Acquis communautaire
Good international practice

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

8. ROSC is a the first step in the process of reform
Financial Reporting Infrastructure (1/2)
ROSC is a the first step in the process of reform
Accounting Standards
Statutory Framework
Monitoring & Enforcement
Education & Training
Accounting Profession & Ethics
Auditing Standards

9. All supporting pillars need to be strengthened
Financial Reporting Infrastructure (2/2)
All supporting pillars need to be strengthened
Accounting Standards
Statutory Framework
Monitoring & Enforcement
Education & Training
Accounting Profession & Ethics
Auditing Standards

10. A&A ROSC Global Coverage of ROSC Europe and Central Asia East Asia
Middle East and
North Africa
South Asia
Latin America and
the Caribbean
Africa

11. Global Coverage of ROSC
Source: World Development Indicators Database, World Bank

12. A&A ROSC in Europe and Central Asia Region
Source: World Development Indicators Database, World Bank

13. From Diagnostic to Reform
Country
Action
Plan
Country Strategy and Action Plans (CAPs)
The World Bank assisted steering committees in Bulgaria, Romania, Macedonia, and Bosnia and Herzegovina to draft their CAPs.
Support implementation and funding the CAPs - mobilizing financial support from Bank and development partners.
Road to Europe – Program of Accounting Reform and Institutional Strengthening (REPARIS)

14. From Diagnostic to Reform
The Lessons Learned
From Diagnostic to Reform
Seven points for success:
Country ownership
Involvement of all interested parties
Realistic timetable
Prioritize
Discussions with counterparts in neighboring countries and EU member states
Cooperation with European and international institutions
Address both statutory and institutional issues. The improved statutory framework must be implemented and enforced.

15. Regional Program
Road to Europe: Program of Accounting Reform and Institutional Strengthening

16. REPARIS Vienna events Vienna events
On March 14, 15 and 16, 2006, the World Bank, in collaboration with the European Commission and support from the Austrian Development Cooperation, held a two-day series of workshops and a ministerial conference at the Hofburg Palace in Vienna.
65 speakers
335 participants
Training workshops
Sharing experience of EU Member States

17. REPARIS secretariat REPARIS secretariat Academic Education
IFRS Courses
Tools to enhance statutory audit quality
Coordination of enforcement activities
Twinning and secondment
Facilitation of information exchange and cooperation,
Etc.
The REPARIS secretariat will oversee the following activities:

18. Thank you for your attention!
Contact:
Thank you for your attention!
For more information, please visit:
The Reports on the Observance of Standards and Codes (ROSCs)
The Road to Europe: Program of Accounting Reform and Institutional Strengthening (REPARIS)
The Advanced Program in Accounting and Auditing Regulation