USAID/IBTCI- PSARP

1. USAID/IBTCI- PSARP Accounting and Auditing in BiH Senad Pekmez – Senior Accounting Consultant USAID/IBTCI – Private Sector Accounting Reform Project Bosnia and Herzegovina

2. USAID/IBTCI- PSARP STATE STRUCTURE • BOSNIA AND HERZEGOVINA • UNDER DAYTON AGREEMENT COMPOSED • OF TWO ENTITIES: • FEDERATION OF BIH and • REPUBLIC OF SRPSKA Accounting and Auditing in BiH Prepared by: Senad Pekmez

3. USAID/IBTCI- PSARP • FEDERATION OF BIH • Responsible Institutions: • Institute for Accounting and Auditing of FBiH (Government Institution) • 2. Association of Accountants and Auditors of FBiH (Private Sector) • 3. Securities Commission of FBiH Accounting and Auditing in BiH Prepared by: Senad Pekmez

4. USAID/IBTCI- PSARP Legal Accounting Framework in FBiH • Law on Accounting (from 1995 amended in 1998) • - 32 Accounting Standards in a force from 1999 (IAS) • - New Chart of Accounts • - New Format of Accounts (Set of Financial Statements) 2. Law on Auditing (from 1995 amended 1998) - Auditing Standards - Translation of: IFAC International Standards on Auditing and Related Services (1998 edition) Accounting and Auditing in BiH Prepared by: Senad Pekmez

5. USAID/IBTCI- PSARP Legal Accounting Framework in FBiH 3. Law on Enterprises: - Every shareholding company should have audited financial statements, subject of approval of annual shareholdes assembly 4. Requirements issued by the SEC of FBiH - By Law oncontents, way and standards of disclosure of financial reports and other information concerning theactivities of shareholders company (OECD rules) Accounting and Auditing in BiH Prepared by: Senad Pekmez

6. USAID/IBTCI- PSARP REPUBLIC OF SRPSKA Responsible Institutions: 1. Association of Accountants and Auditors of RS (Private Sector) 2. Securities Commission of RS Accounting and Auditing in BiH Prepared by: Senad Pekmez

7. USAID/IBTCI- PSARP Legal Accounting Framework in RS • Law on Accounting • - 33 Accounting Standards published in 2000 (IAS) • - New Chart of Accounts • - New Format of Accounts (Set of Financial Statements) 2. Auditing Standards - Translation of: IFAC International Standards on Auditing and Related Services (1998 edition) Accounting and Auditing in BiH Prepared by: Senad Pekmez

8. USAID/IBTCI- PSARP Legal Accounting Framework in RS 3. Law on Enterprises: - Medium and large shareholding companies should have audited financial statements, subject of approval of annual shareholdes assembly Accounting and Auditing in BiH Prepared by: Senad Pekmez

9. USAID/IBTCI- PSARP Tasks and Goals of Profession and Project in Accounting Reform • Building the Audit Profession • - To have audit firms in each entity capable of auditing in • accordance with ISA and reporting on financial statements • in accordance with IAS • -Current activities – organizing Audit Case Study training • for 300 auditors. Each participant will be expected to agree to • a post-training on-site visit by an experienced “international” • auditor to review workpapers, discuss audit issues and assist in • the application of sound audit practice. Accounting and Auditing in BiH Prepared by: Senad Pekmez

10. USAID/IBTCI- PSARP Tasks and Goals • 2. Modernizing University Curricula Reform • - To have BiH universities adopt a modern accounting and auditing curriculum fully in accordance with UNCTAD and IFAC guidelines. • - Seven BiH Universities signed MOA for implementing new curricula. • translating, publishing and delivering new accounting, auditing, cost accounting and financial management textbooks to students and professors. • Organizing Summer 2003 training for University professors Accounting and Auditing in BiH Prepared by: Senad Pekmez

11. USAID/IBTCI- PSARP Tasks and Goals • Enterprise Assistance in Applying IAS • - private enterprises to improve their competitiveness, profitability, and access to foreign and domestic capital through modernizing their financial reporting and management accounting • - present courses on financial reporting (IAS) and managerial accounting to enterprise accountants, • - implement program of on site assistance to enterprises • - train and subcontract local accounting and audit firms in the provision of assistance to individual enterprises Accounting and Auditing in BiH Prepared by: Senad Pekmez

12. USAID/IBTCI- PSARP Tasks and Goals 4. Support to Professional Associations - A professional associations of accountants and auditors, with nationwide representations, made suitable, and becomes a member of IFAC - The AAA of FBiH and the AAA of RS are in negotiations regarding the Charter for State Level Association of Accountants and Auditors. Accounting and Auditing in BiH Prepared by: Senad Pekmez

13. USAID/IBTCI- PSARP Tasks and Goals 5. Legal & Regulatory Reform - to have a nationwide law on accounting and auditing that fully embraces International Accounting Standards and International Standards on Auditing 6. Other Activities - work closely with SEC on preparing and issuing the rules which regulate accounting and auditing for the players in capital market (brokers, dealers, PIF’s, MC, listed shareholding companies etc.) Accounting and Auditing in BiH Prepared by: Senad Pekmez

14. USAID/IBTCI- PSARP Tasks and Goals Build a stronger relation between responsible institution: MF, IAA, AAA, and SEC in a both entities and nationwide - To have better control and monitoring of applying IAS and ISA in financial reporting and auditing. - To have accurate, fair and true financial reporting and disclosure of information for users of financial statements in capital market Accounting and Auditing in BiH Prepared by: Senad Pekmez