1. From Diagnostic to Reform The World Bank’s Accounting and Auditing ROSC Program
Frédéric Gielen,
Senior Financial Management Specialist, World Bank
Baku, May 17, 2005

2. Financial System Stability
Indonesia
Argentina
Brazil
Thailand
South Korea
Russia
Mexico
Hong Kong

3. Parmalat Tyco Ahold Worldcom Enron And then…
“If the confidence of the public in the integrity of accountants’ reports is shaken, their value is gone.”
Mr. Arthur Andersen, 1932

4. Path of financial development
Private Sector Growth
Effective functioning of the market economy requires a supporting infrastructure for information disclosure.
Path of financial development
Productivity
y/l4
y/l3
y/l2
Output Levels
y/l1
Capital Intensity
Source: Based on the econometric findings of Levine, Loayza, and Beck (2000)

5. International Financial Architecture
IFA Objectives
ROSC Objectives
FSAP Objectives
Data Dissemina-tion
Fiscal Transparen-cy
Transparency in Monetary & Financial Policies
Banking Supervision
Insurance Supervision
Securities Regulation
Anti-Money Laundering & Combating Financial Terrorism
Payments & Settlements
Auditing
Accounting
Corporate Governance
Insolvency & Creditor Rights
ROSC Accounting & Auditing
Analyse the comparability of national accounting and auditing standards with international standards, determine the degree of compliance, assess strengths/weaknesses of institutional framework to support financial reporting
Assist the country develop/implement a Country Action Plan.

6. The ROSC Program in Europe and Central Asia
Assessment Completed
Bosnia and Herzegovina
Bulgaria
Croatia
Czech Republic
Estonia
former Yugoslav Republic of Macedonia
Hungary
Lithuania
Poland
Romania
Slovak Republic
Slovenia
Ukraine
Assessment in Progress
Latvia
Poland (update after accession)
Serbia
Turkey
Requested Assessments
Azerbaijan
Kazakhstan
United Kingdom
Illustrative Examples in the Rest of the World
Brazil
Chile
India
South Africa
South Korea

7. Accounting and Auditing ROSC Process
1. Assessment of the accoun- ting and auditing environ- ment:
collection of data (overview of statutory and institutional frameworks)
input from NSC (account of strengths/weakness)
Accounting
Due Diligence Review
Final Report
2. Comparison of National Accounting Standards and IAS/IFRS
3. Assessment of actual accounting practices
Review of data collected using the diagnostic tool, interviews
Inception/closing meeting with NSC, etc
Gap identification
Gap closing options in the form of Policy Recommendations
Comparison of national auditing requirements and ISA. Assessment of actual auditing practices
4. Auditing
NSC
Preparation of Country Action Plan
Azerbaijan A&A ROSC Team
Ida Njeri Muhoho, Financial Management Specialist
Svetlana V. Klimenko, Financial Management Specialist
Frederic Gielen , Sr. Financial Mgt Specialist, U.S. CPA, Reviseur d’Entreprises
David Cairns, former Secretary General, IASC
Leyla Nabiyeva, Financial Specialist
Alfred Borgonovo, Certified General Accountants Association of Canada

8. A Necessary Reform Agenda

9. A Basic Building Block