AmCham Macedonia Winter 2016 (issue 48) | Page 17

ANALYSIS National Accounting & Audit Review Released The Vienna-based Center for Financial Reporting Reform (part of the World Bank’s Governance Global Practice) recently updated its Report on the Observance of Standards and Codes on Accounting and Auditing (A&AROSC) in Macedonia. The report identified significant progress since the previous report in 2003 in Macedonia’s statutory and institutional framework alignment with EU requirements, including: • reforms consistent with good institutional practices and the aquis communautaire, including new laws on accounting services and auditing; • the adoption of International Financial Reporting Standards (IFRS) including for small and medium-sized entities; and the updating of audit standards; • and the establishment of a professional institution for statutory auditors and quality assurance and public oversight arrangements for the audit profession. The report also suggests the following areas for improvement: • fully aligning the statutory framework with EU directives, including simplifying requirements on SMEs; • working with the accountancy profession to ensure its long-term development; • continuing modernization of accountancy education and training; • streamlining accounting and auditing standard setting; and • strengthening the mechanisms to ensure compliance with standards. some depth. Key takeaways from panel discussions at the event included: • The Public Oversight Body – Council for Advancement and Oversight of the Audit - needs further capacity building to provide appropriate oversight of the external audit function, and particularly to conduct quality assurance reviews of the auditors of public interest entities considering the requirements of the new EU acquis. • Further enhancement of the statutory framework is necessary. Areas for reform include: (i) narrowing the definition of PIE - at present PIEs are very widely defined, (ii) adapting company size thresholds as per the latest EU Accounting Directive, (iii) simplification of the reporting framework for small and micro enterprises, and (iv) clarifying and aligning the requirements of the new Law on Accounting with EU Directives. • There is an urgent need for the accountancy profession to be consolidated into one recognized professional body, as foreseen by the Law on Accounting, which could closely cooperate with the Institute of Certified Auditors, particularly regarding professional examinations and CPD. A&AROSC At a December promotional event for the new report in Skopje, quality control and public assurance were explored in Winter 2016 Issue 48  17