ROSCs and Role of the Bank and the Fund

As part of the FSAP-ROSC initiative,11 the World Bank has developed a program to assist member countries in strengthening their financial reporting regimes through the
implementation of IFRS and ISA. The program’s objectives are twofold: (a) an assessment and (b) the development of a country plan. Its assessment activities cover the following:

• Determine the comparability of national accounting and auditing standards with IFRS and ISA, respectively.

• Determine the extent of compliance with established accounting and auditing standards, rules, and regulations, as well as the effectiveness of enforcement mecha­nisms.

• Identify strengths and weaknesses of the institutional framework in supporting high-quality financial reporting.

The basic premises on which a ROSC accounting and auditing (A&A) diagnostic exercise is carried out are as follows:

Подпись: 10IFRS and ISA are endorsed by the Bank, the Fund, and other international institu­tions as the primary benchmarks for corporate financial reporting standards. IFRS and ISA should be mandated for all “public interest entities,” which are defined by the nature of their business, their size, their number of employees, or their corpo­rate status with a wide range of stakeholders. Examples of public interest entities may include banks and financial institutions, insurance companies, investment funds, pension funds, listed companies, and other economically significant business entities.

• SMEs should be subject to a simplified financial reporting regime given their lesser degree of responsibility with respect to the public. This simplified regime for SMEs typically includes less-stringent accounting and reporting requirements.


If one considers the distinctive responsibility of independent auditors with respect to a wide array of stakeholders, independent auditors should be subject to adequate public oversight.

• Access to the auditing profession should be limited to individuals who have demonstrated academic and professional abilities through a certification process that complies with IFAC International Educational Standards for Professional Accountants.

The assessment of A&A standards is designed (a) to focus on complying with national standards and on fostering a country-led program to make national standards comparable with international standards within a feasible time frame and (b) to develop a sufficient infrastructure to effectively adopt IFRS and ISA. The focus on assisting member coun­tries for improving their institutional capacity to support implementation of high-quality A&A standards is consistent with the Bank’s operational activities.

The assessment process places emphasis on country involvement and on efforts to design a country-led program. The program attempts to improve A&A performance, to involve all key stakeholders, and to be linked to progress in related critical areas such as corporate governance and financial sector reform. Detailed A&A ROSCs are done on a stand-alone basis or, occasionally, as part of the FSAP. When detailed A&A assessments are not available, the focus of financial sector assessments is directed to a comparison of national standards with IAS 30, 32, 39; the legal and institutional framework for A&A; the quality of A&A of financial institutions; and a review of disclosure practices applying to financial institutions (see section 10.5).

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