During the week of March 21, 2016, the World Bank’s CFRR team held a series of events in Tbilisi to demonstrate the World Bank’s commitment to ongoing reform in audit regulation and support Georgia on its reform path in this important policy area. The key highlights of these events were:
- The Georgian Parliament hosted a presentation of the draft Accounting & Audit Law on March 24,2016, gathering over 20 Members of Parliament, as well as Deputy Finance Minister Giorgi Kakauridze, senior leadership of the National Bank of Georgia, and representatives of professional accountancy organizations;
- The draft Accounting & Audit Law was supported by business associations and representatives of the private sector in open consultations held with businesses on March 22 2016;
- These open consultations and all-party debate concluded that the draft Accounting & Audit Law is generally in line with the expectations of all sides and is therefore anticipated in the Georgian Parliament by the end of June 2016.
Improving audit quality and enhancing auditor independence
The draft legislation has been developed by an Inter-Government Working Group comprising representatives of the Ministry of Finance, Ministry of Economy and Sustainable Development, the National Bank, the Parliament’s Budget & Finance and Sector Economy Committees, and World Bank experts. While presenting the proposed new legislation to Members of Parliament (MPs), the Working Group highlight the expected benefits of the draft law, which include:
- improving audit quality in Georgia,
- introducing public audit oversight,
- strengthening auditor independence,
- enhancing transparency, and
- fostering audit market diversity.
The presentation was hosted by the Chair of Parliament’s Budget and Finance Committee, Tamaz Mechiauri, the Chair of the Sector Economy Committee, Zurab Tkemaladze, and the World Bank Regional Director for the South Caucasus, Mercy Tembon.
The presentation provided an effective platform for constructive dialogue on the proposed new law and facilitated cooperation between the MPs and the Working Group. Concluding the event, the Chairs thanked all parties for the well-formulated draft of the new Accounting and Audit Law, and encouraged the Working Group to present it to the Georgian Parliament as soon as possible for consideration and approval.
Simplifying access to credit and improving the investment climate
Prior to meeting with the Georgian MPs, the CFRR team presented the draft law to over 70 stakeholders, including members of business associations and the private sector, regulators, and representatives of academia. The event provided an opportunity to explain how sound corporate financial reporting legislation will raise transparency, simplify access to credit for business, and improve the investment climate in the country. The new law will also enable Georgia to illustrate its progress in implementing the Association Agreement with the European Union (EU). Business representatives affirmed their commitment to improving financial reporting practices and raising the quality of financial information in the market.
The World Bank confirmed its commitment and continuing support for Georgia’s aspirations to align its audit legislation more closely with the EU Directives, including under the ongoing Strengthening Auditing and Reporting in the Countries of the Eastern Partnership (STAREP) program.