2008年-世界发展银行全球_Accounting_and_Auditing___Armenia_32页_797kb

Summary of the Report on the Observance of Standards and Codes (ROSC) - Armenia

Executive Summary

This report evaluates the current accounting, financial reporting, and auditing practices in Armenia, using International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) as benchmarks. It highlights the importance of high-quality financial reporting for enhancing the business climate, attracting investment, strengthening financial sector stability, and improving transparency in both public and private enterprises.

The report identifies several key challenges, including the lack of tailored accounting standards for smaller entities, limited capacity within the accounting and auditing profession, and the need for improved education and training. It recommends a multi-tiered approach to financial reporting, with different standards for Public Interest Entities (PIEs), Small and Medium-Sized Entities (SMEs), and micro-entities. It also calls for the replacement of outdated Armenian standards with up-to-date translations of IFRS and ISA, as well as the establishment of a National Steering Committee to oversee the implementation of reforms.

Core Content and Key Findings

1. Accounting and Auditing Environment in Armenia

• Accounting Standards: Armenia currently uses Accounting Standards of the Republic of Armenia (ASRA), which are based on IAS from 2001 with minor modifications. There is no distinction between large and small entities, and SMEs are not provided with simplified reporting requirements.
• Auditing Standards: Standards on Auditing for the Republic of Armenia (SARA) are based on ISA. However, the translation and adoption of ISA into SARA have lagged, creating a gap between the latest international standards and those in use in Armenia.
• Legislative Framework: The Law on Accounting (1998, last amended in 2003) and the Law on Banks and Banking (which includes banking-specific accounting and auditing requirements) regulate financial reporting and auditing. These laws require financial statements to be prepared in accordance with ASRA and SARA.

2. Challenges in the Accounting and Auditing Profession

• Professional Capacity: Only 150 individuals hold the Ministry of Finance (MoF) accountancy qualification certificates, and 75 hold auditor certificates. The profession lacks recognition of international qualifications and has limited membership in professional associations.
• Education and Training: There is a need for better alignment between academic institutions and the professional sector. Universities should enhance their connections with the private sector and professional organizations to improve the quality of education in accounting and auditing.
• CPD and Certification: The profession lacks a sustainable system for continuing professional development (CPD), and the MoF did not offer certification exams from 2001 to 2006, contributing to the low number of qualified professionals.

3. Financial Reporting Requirements by Entity Type

4. Key Policy Recommendations

A. Statutory and Legal Framework

• Implement a three-tier financial reporting system:
  • PIEs apply full IFRS.
  • SMEs apply IFRS for private entities (when available).
  • Micro-entities report only for tax purposes.
• Replace ASRA with a modern translation of IFRS and establish a sustainable process for future translations.
• Replace SARA with an up-to-date translation of ISA and ensure a timely translation process for amendments.
• Establish a company registry to collect and file financial statements from entities required to publish them.

B. Institutional and Capacity Building Measures

• Delegate regulatory functions (e.g., qualification of professionals, audit quality control) to professional organizations.
• Create a Chamber of Auditors and Accountants to oversee accounting standards, translations, and the standard chart of accounts.
• Strengthen the role of the Ministry of Finance (MoF) as an oversight body, rather than a direct regulator.

C. Education and Training Measures

• Enhance university-industry collaboration to align education with professional needs.
• Develop a sustainable program to retrain accounting educators.
• Increase hiring of accounting faculty with practical experience in universities.

Conclusion

The report emphasizes the need for a holistic and multi-disciplinary approach to reform the accounting and auditing environment in Armenia. It calls for the adoption of IFRS and ISA, capacity building, and institutional reforms to improve the quality and consistency of financial reporting. These changes are expected to support sustainable economic growth, greater transparency, and enhanced access to global financial markets.

A National Steering Committee (NSC) is recommended to coordinate the reforms, with a senior government official leading the effort. The NSC should develop a Country Strategy and Country Action Plan (CAP), including a budget and resource allocation, to ensure the reforms are implemented effectively.