The Kyrgyz Audit and Financial Reporting Enhancement Project (KAREP) project was implemented through a combination of recipient, represented by the State Service for Regulation and Supervision of Financial Markets of Kyrgyz Republic (SSRSFM), and World Bank (WB) led actions. It was funded by the Swiss Economic Cooperation Office (SECO) and administered through a single donor trust fund by the Centre for Financial Reporting Reform (CFRR).
The KAREP project was designed to support the Government of the Kyrgyz Republic’s Country Strategy and Action Plan (CSAP), 2014-2020 for the reform of its Corporate Financial Reporting (CFR) framework. The CSAP seeks to modernize the standards of external financial reporting and auditing to prevailing international practices. The 2008 Report on the Observance of Standards and Codes, Accounting & Auditing (ROSC A&A) assessment provided a good reference point for the wide scope of issues to be addressed by KAREP. These were divided into three results-based components to be implemented by the CFRR (Bank executed) and the State Service for Regulation and Supervision of Financial Markets (recipient executed).
KAREP’s Project Development Objective (PDO) was partially achieved by equipping the Kyrgyz Republic with a sound institutional framework for corporate financial reporting namely: (i) improving the statutory framework, bringing it closer to good international practices - all results/ objectives associated with the new legal framework were achieved or exceeded; (ii) the KAREP’s support to establishing a modern audit regulation system and to enhance the capacity of other regulators to use the new reporting standards in their work substantially achieved its objectives; (iii) the targeted support to 4 state-owned enterprises (SOEs) to improve their capacity to draft annual financial statements in compliance with International Financial Reporting Standards (IFRS) was completed but the planned scope of support for two SOEs was marginally reduced due to implementation delays and the COVID-19 restrictions; and (iv) the achieved outcome for modernizing accounting education is the establishment in law of an enhanced structure for the professional education system to become a qualified accountant and/or auditor while the literacy outcome was achieved through a comprehensive training and awareness raising program which was implemented to inform participants about the IFRS and the ISAs and improve their capacity to apply them.
The PDO achievement was shared by both the Recipient-executed and the Bank-executed parts of the project. While the Recipient-executed part supported improving the statutory framework and modernizing accounting education and literacy, the Bank-executed part supported these reforms through building capacity for applying and monitoring sound financial information, including assisting selected key SOEs in improving their financial reporting systems and processes.
Project activities were closed on 30 June, 2022.