The Road to Europe – Program of Accounting Reform and Institutional Strengthening (REPARIS)
July 8, 2005

The policy environment and institutional framework for corporate reporting in South Central and South East Europe suffer from weaknesses. Such weaknesses have been associated with illicit corporate behavior and increased fraud and corruption, which can lead to reduced direct foreign investment and lowered investor confidence. Furthermore, the consolidation of peace and stability in the Region, as well as potential accession to the European Union, hinges upon well-working institutions. The Road to Europe – Program of Accounting Reform and Institutional Strengthening (REPARIS) is a regional program aimed at creating a transparent policy environment and effective institutional framework for corporate reporting within South Central and South East Europe. Participating countries/entities include Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo (UNSCR 1244), former Yugoslav Republic of Macedonia, Romania, and Serbia and Montenegro. Moldova, Turkey and Ukraine also participate in certain REPARIS activities.

The World Bank hosted a one-day REPARIS conference in Brussels on Wednesday, June 30, 2004, in close cooperation with the European Commission and with the participation of Ministers of Finance and their designates, to discuss REPARIS. The key objective was to share with participating countries/entities the requirements for developing a sound corporate financial reporting infrastructure. This is essential not only for generating private sector growth, but is also a requirement for joining the European Union. REPARIS has been developed by the World Bank in close cooperation with the European Commission, the Organization for Economic Co-operation and Development (OECD), the private sector, and multilateral and bilateral partners. The REPARIS Program is designed around the introduction, implementation, and effective enforcement of relevant portions of the EU’s acquis communautaire. The key interventions under the REPARIS Program include strategic input on (a) drafting and phasing-in of legal and regulatory instruments to comply with the acquis; (b) institutional design and operating procedures; and (c) design of ongoing education and training programs, both academic and professional. In addition, the Program will include twinning arrangements with leading foreign institutions, as well as the establishment and start-up support of a network of regulators, standard-setters, and officials from participating countries.

The REPARIS Program will contribute to long-term prosperity by promoting growth and reducing volatility through:
- Strengthening financial architecture and reducing the risk of financial market crises and their associated negative economic impacts.
- Contributing to foreign direct and portfolio investment and helping to mobilize domestic savings.
- Allowing investors to evaluate corporate prospects and make informed investments and voting decisions, which will result in a lower cost of capital and a better allocation of resources.
- Facilitating smaller-scale corporate borrowers’ access to credit from the formal financial sector by lowering high costs of information and borrowing.
- Facilitating potential integration into the European Union.

World Bank ROSC Accounting and Auditing Roundtable 2005

On a global level, the World Bank plays a leading role in advising countries on accounting and audit regulation. The international community has emphasized the important role of international standards in strengthening the international financial architecture. In this context, the World Bank is the international institution charged with assessing countries' systems of accounting and auditing regulation through the Reports on the Observance of Standards and Codes (ROSC) Accounting and Auditing Program. The ROSC Accounting and Auditing Program was established to assist countries in implementing International Financial Reporting Standards and International Standards on Auditing in order to strengthen their financial reporting regime. For first and second wave accession countries, the ROSC assessments have been carried out in close cooperation with the European Commission. The ROSC reports have formed the analytical and diagnostic underpinning for the REPARIS initiative. The World Bank organized a two-day Roundtable on the ROSC A&A in February 2005, which brought together management and staff from the World Bank, as well as international standard-setting bodies, international organizations of financial regulators, the Financial Stability Forum, regional development banks, and members of Government from eight client countries in order to learn the lessons from the ROSC A&A carried out to date and to enhance the approach to further ROSCs.

On June 28, 2005 the sixth module of the Advanced Program in Accounting and Auditing Regulation was delivered as an integral part of the REPARIS program. Mr. John Hegarty, Chairman of the Private Sector Committee of the Financial Management Sector Board and Manager of Financial Management for Europe and Central Asia Region of the World Bank, together with the Task Team Leaders, Mr. Frederic Gielen and Mr. David Nagy initiated and designed this Advanced Program in order to give senior civil servants, financial sector regulators and accounting and auditing bodies from participating countries/entities an opportunity to interact with a panel of leading international experts.

The panel of contributors includes leading international experts from the European Commission (DG Internal Market, DG Enlargement, DG Taxation), World Bank, International Federation of Accountants, International Accounting Standards Board, European Federation of Accountants, Committee of European Securities Regulators, Basel Committee on Banking Supervision, European Federation of Investment Funds and Companies, International Association of Insurance Supervisors, European Committee of Insurers, United Nations Conference on Trade and Development, UK Financial Reporting Council, Institute of Chartered Accountants of Scotland, National Accounting Council in France, Austrian Federal Economic Chamber, Vienna University of Economics and Business Administration, Royal NIVRA, and high level policy-makers from the New EU-8 Member States, among others.

John Hegarty, Sector Manager (middle), Financial Management, Europe and Central Asia Region, with the Task Team Leaders, Frederic Gielen (left) and David Nagy (right) during the Advanced Program in Accounting and Auditing Regulation

This training event builds on the training program in Private Sector Accounting & Auditing, which was delivered to eight New EU Member States (EU-8) before their accession to the European Union on May 1, 2004. The Task Team leaders, Mr. Gielen and Mr. Nagy, were eager to enhance the program further and tailor it to better suit the needs of candidate countries and other interested stakeholders. The Program consists of 28 modules extending into 2006. These modules are broadcasted live, with simultaneous interpretation in eight languages, reaching an audience between 300-500 participants for each module. There has been significant enthusiasm for this event, which has been made evident by the attendance of several high-level government officials participating in 14 different countries and entities of the Europe and Central Asia Region.

“This timely and relevant Advanced Program addresses emerging issue and new trends in both EU and global requirements impacting the regulation of accounting and auditing in participating countries/entities,” acknowledged Shigeo Katsu, Vice President, Europe and Central Asia Region, World Bank.

“The concepts and techniques learned through the Advanced Program are definitely tangible working tools that will fill many of the ‘how to’ gaps,” highlighted James W. Adams, Vice President Operations Policy and Country Services, World Bank.

Fayezul H. Choudhury, Vice President & Controller, World Bank; Member of the Public Oversight Board, IFAC; and Member of the Standards Advisory Council, IASB, noted “Advanced Program in Accounting and Auditing Regulation focus on practical solutions to real problems faced by regulators. Lots of practical examples… Highly recommended!”

In order to view the six video modules of the Advanced Program in Accounting and Auditing Regulation, please visit the program website: http://vle.worldbank.org/gdln/reparis.htm or click on the six videos in the table below.