Background

This project is a direct follow up to the A&A ROSC report dated November 2008. The project supports the policy recommendations outlined in the Accounting and Auditing (A&A) ROSC by further developing, prioritizing and sequencing recommendations into a time-bound action plan agreed to by relevant stakeholders. The ROSC recommended that the Service for Regulation and Supervision of Financial Markets intensify its work with Parliament, relevant regulatory institutions and other stakeholders to lead the reform efforts related to corporate financial reporting. The ROSC, along with the follow-up activities to implement the ROSC recommendations, is supported by the development community and senior management of the International Federation of Accountants (IFAC). The project is also in line with the objectives of the Joint Country Support Strategy (JCSS) for the Kyrgyz Republic.

Project

Goal:  The objective of this technical assistance is to help the country authorities and stakeholders to initiate reforms in the area of corporate financial reporting on the basis of the recommendations of the November 2008 Accounting and Auditing Report on Observance of Standards and Codes (A&A ROSC).

Purpose:  

The project funds the following activities, which have been organized into two components:

Component 1 - Financial Reporting Legislation

- Perform detailed analysis of existing corporate financial reporting legislation, identify gaps and provide recommendations on improvement and a roadmap for alignment of the legislation with good international practices; the proposed roadmap will be used as input for the Country Strategy and Action Plan (CSAP);

- Assist in drafting some key laws, such as new accounting and auditing laws or propose changes to existing laws.

Component 2 - Country Strategy and Action Plan

- Assist SRSFM and the National Coordination Working Group (NCW) in considering options and making decisions on priority policy and institutional development measures, including defining the role and development of accountancy profession and activities, and regulatory and institutional frameworks, and their sequencing relative to the requirements for the alignment with the international best practices and recommendations of the Accounting and Auditing ROSC;

- Provide guidance and support the NCW in risk assessment; 

- Assist SRSFM and NCW in defining cost estimates of the CSAP activities and preparing detailed cost tables;

- Advise SRSFM and NCW in managing preparation of the CSAP and assist in drafting the framework for CSAP implementation reporting and monitoring; and   

- Facilitate creation of enabling environment for the reform through workshops organized to review and comment on drafts of the CSAP and discuss various policy options and rationale.

Outputs:

The outputs of this project are:

Component 1 - Financial Reporting Legislation

• Proposals to improve the statutory framework accepted by the stakeholders and ready for adoption
• Drafts of necessary changes to accounting and auditing laws or new draft laws
• Clear roadmap for further legislative improvements that are not possible to implement at the initial stages of reform

Component 2 - Country Strategy and Action Plan

• Comprehensive reform Country Strategy and Action Plan is developed and adopted by the NCW and ready for adoption by the Government; the document will contain details on reform activities, milestones, implementation arrangements for reform implementation, and prioritization of activities; the document may be used to mobilize the donor community to support reform activities.

Project LIFE TIME is 13 months, starting in April 2010

Project BUDGET is $209,600

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