Enhancing Financial Disclosure Standards in Armenia, Azerbaijan and Georgia
(ADB: armenia,azerbaijan,Georgia, 2009)

In their transition from centrally planned towards market economies, Armenia, Azerbaijan and Georgia have opened several sectors of their economies to increased domestic and foreign private investment and market borrowings. In doing so, they have recognized the importance to potential investors and creditors of timely, reliable and accurate information about the financial condition of enterprises being opened to private investment. The integration of their accounting and auditing systems with International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) is essential to providing reliable financial information to the enterprises' potential investors and creditors. The overall objective of this assignment is to improve governance in the corporate and financial sectors of Armenia, Azerbaijan, and Georgia.  Specifically the RETA (Enhancing Financial Disclosure Standards in Transitional Economies, ADB TA No. RETA-36247) is designed to develop and promulgate:

• A manual on methodologies for reconciling income and asset values computed according to IFRSs and domestic tax codes;

• Guidelines for interpreting and implementing ISAs;

• Guidelines on the criteria for entry into and continued membership in the accounting and auditing profession;

• Guidelines for domestic audit firms' audit of publicly listed companies and their quality and for quality control of audits;

• International Federation of Accountants (IFAC) ethics' material and corresponding ISA guidelines available in regional languages;

• Accountants, auditors, and regulators from the three countries trained in applying IFRSs and enforcing ISAs;

• Regional interface for addressing common generic constraints.

The process of reform in the three countries has involved the rapid introduction of new accounting and auditing standards based on IFRS and ISA without sufficient attention paid to the legal, regulatory and institutional arrangements to enforce the new standards.   This RETA is intended to improve the quality of accounting standards and auditing standards and their enforcement in all three countries.