ADB to Provide Technical Assistance to Azerbaijan to Develop Accounting and Audit Trial in Azerbaijan

Business Materials 25 April 2008 16:05 (UTC +04:00)

Azerbaijan, Baku, 25 April / corr. Trend I. Khalilova/ The Asian Development Bank (ADB) plans to approve technical assistance worth up to $1mln for three Trans-Caucasian countries in the first half of July to develop the accounting and audit trial in Azerbaijan, said a source in the Baku Office of the Bank.

Assistance will be provided while introducing international accounting and audit trial standards. The Accounting Chamber of Azerbaijan will also be given technical assistance in order to develop national audit standards and will hold training sessions in this field.

According to the list approved by the Cabinet of Ministers, some 20 important public organizations of were to begin accounting and audit trials and to introduce financial reporting based on international standards by 1 January 2008. The criteria for selection of such organizations are the volume of assets which must exceed AZN100mln, the annual income - AZN5mln and the number of employees - 1,000 people.

SOCAR, Azerenerji, Bakielekektrikshebeke, Azercell JV, SOCAR Department on Oil Pipelines, Marketing and Economic Operations, Azneft PA, Oil Refinery named after Heydar Aliyev, Azerbaijani Railway, Bakimetropliten, AZAL State Concern and its national aviation company, Kaspar, Azerigas, Azersu, Aztelekom PA, Azerkimya state company and its ethylene-polyethylene plant meet this criteria.

Apart from government companies, a number of private companies have relied on soviet accounting standards up to now. Currently only banks have transferred to a new accounting plan. They have, however, been presenting accounts to the National Bank in line with domestic and international standards since 2004.

According to the Law on Accounting, the commercial organizations were to complete the introduction of national accounting standards developed on the basis of international standards until the end of 2007. Thereupon, the State Program, on the introduction of accounting national standards indicates the sequence of introduction of standards in the course of 2005-2008. The budget and non-government organizations were required to complete this process by the end of 2008 and small and medium businesses by1 January 2006. The deadline for municipalities, budget organizations and state funds is 1 January 2009.

The Ministry of Finance is responsible for the development of the national standards. It turned out that the date to present the first accounts on international financial reporting standards (IFRS) has been fixed for 1 May after important public organizations transferred to the new system on1 January 2008.

The organizations that have successfully switched to IFRS are Azercell, SOCAR, Azerenerji and Azwrigaz. These organizations are required to present IFRS by 1 May 2008.

Some 10 additional national financial reporting standards will be approved by1 May. Those organizations, who do not observe the schedule, will be fined. Monitoring has already been launched in this regard. There is some 28 IFRS in the world.

The official exchange rate for 25 April is 0,8289 AZN/USD.

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