ifrs roll-out and institutional capacity building · ifrs roll-out and institutional capacity...
TRANSCRIPT
AGENDA
• IntroductiontoIFRS:Backgroundandsignificance
• IFRSinEthiopia• Implementationchallenges• BuildingcapacitytoassistIFRSroll-out
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INTRODUCTIONTOIFRS
WhataretheInternationalFinancialReportingStandards(IFRS)?
• SetofInternationalAccountingStandards
• IFRSareissuedbytheInternationalAccountingStandardBoard
• AcommonAccountinglanguagefortheworld
• Maintainingstabilityandincreasingtransparencythroughoutthefinancialworld
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INTRODUCTIONTOIFRS
WhatisIFRS?
• IFRSsaredevelopedprimarilyforprofit-orientedentities,whereasIPSASsareforpublicsectorentitiesthatprovideservicestoenhanceandmaintainthewell-beingofthecitizensofastate.
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INTRODUCTIONTOIFRS
RelationshipbetweenIPSAS
andIFRS?
• IPSASisconsideredthedefinitivesetofaccrual-basedinternationalaccountingstandards
• TherelationshipbetweenIFRSandIPSASisduetothefactthatIPSASstandardsarelargelybasedontheprinciplesofIFRS.
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BACKGROUND
• Applicability:
• Broaderstrategies• FinancialManagement• AssetManagement• Governanceand
accountability
• TheTechnicalBases
• Thecoreaccountingbasis• Accruals• Goingconcern• Capitalaccounting
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BACKGROUND
• TheStandards– andtheCoreStatements
•• Theprincipalstandards• Themajoraccounting
statements• Financialreporting• Disclosures• Consolidationandthe
accountingtreatmentofrelatedparties
• Reporting
• Financialreportingrules• Budgetingandreporting
onthesamebasis• Effectsondecisionmaking
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IFRSANDITSIMPORTANCE
Betterinvestments
Providestrustinthequalityoffinancialreporting
Encouragesinternationalbusinessandinvestment
Increasesstability,accountabilityandtransparencybothattheinstitutionalandgovernmentlevel
Willincreaselevelofprofessionaleducationofaccountants
Mobilisefinancialresourcesforlong-terminvestment
Improvinggoodgovernanceandreducingthelevelofcorruption
However- Theintroductionrequiresasignificantamountofprocesschange
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IMPLEMENTATIONCHALLENGES
Needsappropriateandrealisticprojectplansandnecessaryresources
Proactivemanagementsoprojectstaysontrackforon-timecompletion
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IMPLEMENTATIONCHALLENGES
HOWISITPROGRESSING?
Thereisnosignofanyoneelsechallengingforthetitleofbeingfirstacrosstheline
Mostcountriesarenowmakingprogress
Movingtotheintermediatepositionofcash-basedIPSAScompliance
Canothercountriesleapfrogastechnologyandimprovedsystemsshortenthepath?
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IMPLEMENTATIONCHALLENGES
Assetmanagement:oneofthechallenges.Gettingtheassetsontoaregisterwithavaluationbasis
Needanarmyofvaluerstoupdatethefigures!
Timingofrevenuebudgetsorcapitalprogrammes
Manycountriesdon’thaveenoughaccountantsandcertainlynotenoughskilledexperiencedoneswiththisbackground
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IMPLEMENTATIONCHALLENGES
NeedbiggeraccountingsystemsforIAS
1Needthesystemspeopletorunthem
2Politicalsupportcanbeanissue
3Fundingcanbepoliticallysensitive
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IMPLEMENTATIONCHALLENGES
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Thedeadlinehaspassed!
Timescalesweretoooptimisticinmostcountries
Mostcountrieswehavehaddelegatesfromarejustmakingastart
Ittakestime:theUKstartedimplementationaround1993,withtheintroductionofResourceAccounting
UK,AustraliaandNZnowclose
CHALLENGESFACINGIMPLEMENTATIONOFIFRS INAFRICA
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Overambitioustimescales:MostcountriesinAfricawilltakeanother5-10years– lessforthemoredeterminedcountries
Shortageofaccountantswiththerightknowledge
Lackofunderstandingamongnonfinancialseniormanagementofrequirementsandconsequences
Systemsandprocesses
Aneedforvaluers
WHYIFRSINETHIOPIA?
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GovernmentofEthiopiahasidentifiedimplementationasakeyenablertoeconomicgrowthpotentialandmiddleincomecountrystatusby2025
TheintroductionofIFRSinEthiopiaispartoftheplantoexpandtheimpressiveeconomicprogress
Enablingimprovedeconomicperformance,performancemanagementanddecisionmaking
WHYIFRSINETHIOPIA?
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Theeconomicwell-beingandfuturedevelopmentwillbestronglysupportedbythesuccessofIFRSimplementation
Compliancewillbringinternationalrecognitionandtheimprovedcapabilitytoestablishcapitalmarkets
Bidsandrequestsforsupportfromdonorswillbelookedonmorefavourablyifsetoutintheagreedinternationallanguageofprofessionalaccountants
WHYIFRSINETHIOPIA?
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IFRScompliantaccountswillnot,bythemselves,achievetheabovebenefits.Alsorequiressuitablechangestothegovernancearrangements,relatingto:
•InformationprovisiontomanagersandtheBoardReporting
Decision-makingprocessesandprocedures
RecruitmentofNon-ExecutiveDirectorsandthedefinitionoftheirroles
DefinitionofrolesandresponsibilitiesbetweentheBoardandmanagement
WHOISIMPLEMENTINGIFRSINETHIOPIA?
TheAccountingandAuditing
BoardofEthiopia(AABE)crucialtothesuccessfulimplementationandregulationof
financialreporting
Reducingcorruption
Encouraginglongterminvestmentduetoanimprovedbusiness
environment
The2014FinancialReporting
Proclamationrecognised
theirimportance
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CURRENTSTATUS
• CouncilofMinistersRegulationsetting-uptheoversightBoard– theAccountantsandAuditorsBoardofEthiopia(AABE)
• TheProclamationsetsoutfinancialreportingframeworksapplicabletodifferentreportingentities
• AABEresponsibleforregulatingtheaccountancyprofessionandensuringitsdevelopmentinthecountry
• AABEhasafiveyearstrategicplanwhichfocusesonbuildingthecapacityandcompetencyoftheprofessionandourowncapacity
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CROWNAGENTS’EXPERIENCEINIFRS
Decadesofexperienceinimplementationofpublicfinancialmanagement
reforms
Developingcapacityinfinancialmanagementacrossawiderangeof
countries
Extensiveexpertiseinriskmanagementandanunderstandingofthespecificrisksthatcan
derailIFRSimplementation
Moreeffectivecorporategovernanceand
performancemanagementalsorequired
Organisationalcapabilitytosupportthefivepillars
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IMPLEMENTATIONCHALLENGES:OURINSIGHTS
TrainingprofessionalsinAccountingStandardsforlastthreeyears
Whodowetrain?
Knowledgeofthestandardsamongourtrainees
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HOWDOWETRAINIFRS?
GoingthroughtheStandardsishardfordelegatesbutbestwayoftacklingskillsgaps
Importanttomakeitinterestingandbackuptheconceptswithexamplesandcountry-specificcasestudieswherepossible
RepeatcommonthemestoshowhowtheStandardsarebasedonprinciplesratherthanrulesandthatthereisscopeforjudgementswithincompliantaccounts
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BUILDINGCAPACITY
Leadership TeamBuilding ProjectManagement
ChangeManagement
ICTandSoftwareSkills
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Technicalaccountancyareasneedtobesupportedby:
IdeallyplacedtosupportthechangesthatenableIFRStobeimplementedandadopted
Wecanidentifythesystemrequirementswhichcanavoidexpensivemanualcompilationofinformationforreportingpurposes
Workingwithyouinallaspectsofsystemsreviewandselection
Adviseonthechangesthatarenecessarytoachievecomplianceandhighperformance
Workingwiththesystemssupplierstoaccessthechangesneeded
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BUILDINGCAPACITY
• ManagingtheImplementationProgramme
• WorkingwiththeProgramme/ProjectPlan
• Reporting• Dealingwithvariances• Focusingonthebenefits• Postimplementationreview• Benefitsrealisation
management
SupportandguidetheRollOutofIFRSinlinewithgovernmentroadmap
• AdviseGovernmentoffices,publicenterprises,FinancialinstitutionsandrelatedorganisationsontherolloutofIFRSfromstarttocompletion,alongsideourchosenaccountingpartner
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BUILDINGCAPACITY
CROWNAGENTS’PFM EXPERIENCEINAFRICAINCLUDES:
MinistryofFinance,GovernmentofZimbabwe
Wecoachedandmentoredstafftoobtainprofessionalqualifications(CAT)and(CPA)
Ethiopia WeprovidedtechnicalassistancetostrengthenandmodernisethecashmanagementandthedisbursementsystemofEthiopia
NationalRevenueAuthorityofSierraLeone
Wesupportedtheadoptionofmodern,efficientandeffectiveprocessesandsystems,achievingahighstandardoftaxpayercomplianceasessentialpartoffiscalpolicymeasuresadoptedinthecountry
CentralBankofNigeria
Microandmacroprudentialpolicy
PublicFinancialEnterprisesAgency,Ethiopia
Riskmanagementandstresstestingtoequipstaffwiththeskillstoidentifyandevaluatethemajorrisksinfinancialinstitutionsandplanstresstestprogrammes tomeettheneedofriskgovernance
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Privateandconfidential
CAPACITYBUILDING
WedeliverIFRStrainersthroughanexpertassociateteam
CrownAgentshasanMoUwithACCAforcollaborationandarecurrentlydiscussingapartnershipwithCIPFA
OurclientsinEthiopiawillhaveatwinningpartnerwithworldclassexpertiseincapacitydevelopmentandaccountingstandards
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THANKYOU/
FantuGola- CountryManager,Ethiopia [email protected] +251116628969
SamronAdane- RegionalManagerforEastandSouthAfrica [email protected] +251116628969
TimRunacre– HeadofTrainingandProfessionalDevelopment [email protected] +44(0)7776464602