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