Turkmenistan, Ashgabat, Dec. 14 / Trend H.Hasanov /
The World Bank (WB) developed World Bank Accounting and Auditing Report on the Observance of Standards and Codes (A&A ROSC) in the context of the current program of accounting and auditing reform approved by the Turkmen President in July 2010, the Bank repoerted.
The report recommends that Turkmenistan consider developing a three-tier financial reporting framework.
" In the recommended structure public-interest entities, mainly banks, insurance companies and the largest state-owned enterprises, would apply International Financial Reporting Standards (IFRS); small and medium-sized enterprises (SMEs) would use national accounting standards; and the very smallest ("micro") enterprises would only need to comply with national tax rules," the report reads.
The report focuses on the strengths and opportunities for enhancement of the financial reporting framework and other aspects of the accounting and auditing environment that influence the quality of corporate financial reporting. It includes a review of both statutory requirements and actual practice.
The demand for accounting and auditing professionals knowledgeable in international financial reporting and auditing standards will grow substantially in the next few years and, therefore, education and professional training efforts should be increased.
However, the resulting increase in capacity of the auditing profession should be directed to enterprises that need their services, mainly public-interest entities, and statutory audit requirements should take account of the level of public interest in conducting an audit.
The A&A ROSC report contains recommendations related to the statutory framework, financial reporting and accounting standards, auditing standards, systems of monitoring and enforcement, professional standards and ethics, and education and training. The recommendations aim to enhance the financial reporting process in accordance with international experience and good practice, while taking account of Turkmenistan's specific circumstances.
The report was prepared on the basis of a study carried out in Turkmenistan by a team from the World Bank in 2009 and finalized with the Turkmen authorities in June 2010. The review was conducted through a participatory process involving a range of stakeholders in cooperation with the Ministry of Finance.
The report was presented and discussed during a recently organized accounting and auditing workshop, which highlighted the opportunities for Turkmenistan to enhance the monitoring of economically important enterprises using improved financial reporting regulations and practices.
This would help to ease the private sector's access to external finance and so contribute to economic growth.