Strengthening Financial Reporting, Strengthening MSMEs
centercenterStrengthening Financial Reporting, Strengthening MSMEsCompletion Report: Connecting Voices of MENA initiative, co-financed by the Micro-, Small-, and Medium Enterprise (MSME) Technical Assistance FacilityGovernance Global Practice: Public Resource Mobilization and Management (GGP/PRMM)Middle East and North Africa (MENA) Team9410077300Strengthening Financial Reporting, Strengthening MSMEsCompletion Report: Connecting Voices of MENA initiative, co-financed by the Micro-, Small-, and Medium Enterprise (MSME) Technical Assistance FacilityGovernance Global Practice: Public Resource Mobilization and Management (GGP/PRMM)Middle East and North Africa (MENA) TeamTable of Contents TOC \o "1-3" \h \z \u Acronyms PAGEREF _Toc452116825 \h 2Executive Summary PAGEREF _Toc452116826 \h 4Introduction / Background PAGEREF _Toc452116827 \h 6CV MENA PAGEREF _Toc452116828 \h 7Program Activities PAGEREF _Toc452116829 \h 81.Bootcamps PAGEREF _Toc452116830 \h 82.Solutions Labs PAGEREF _Toc452116831 \h 123.Exchange Forum PAGEREF _Toc452116832 \h 144.Ma’arefah PAGEREF _Toc452116833 \h 185.Research and Training PAGEREF _Toc452116834 \h 19Leveraging Outcomes PAGEREF _Toc452116835 \h 22Lessons Learned / Considerations for the Future PAGEREF _Toc452116836 \h 24Conclusion PAGEREF _Toc452116837 \h 24AcronymsAAAccounting and AuditingAAAAssociation of Accountants and AuditorsACCAAssociation of Chartered Certified AccountantsAFAAArab Federation of Accountants and AuditorsAICPAAmerican Institute of Certified Public AccountantsASAAccountability State Authority CFRCorporate Financial ReportingCGFRCorporate Governance and Financial ReportingCNCC – CSOECConseil Supérieur de l’Ordre des Experts-Comptables - Compagnie Nationale des Commissaires aux Comptes (France)CPACertified Public AccountantCPDContinuing Professional Development (See CPE)CPE Continuing Professional Education (See CPD)CSOCivil Society OrganizationCV MENAConnecting Voices of Middle East and North AfricaEFSAEgyptian Financial Supervisory Authority ESAAEgyptian Society of Accountants & AuditorsEUEuropean UnionFCCAFellow Chartered Certified AccountantFSAPFinancial Sector Assessment ProgramsIFRSInternational Financial Reporting StandardsISAInternational Standards on AuditingIAASBInternational Accounting and Auditing Standards BoardIAESB International Accounting Education Standards BoardIASBInternational Accounting Standards BoardIESs International Education Standards IFACInternational Federation of AccountantsIFIARInternational Forum of Independent Audit RegulatorsIFRSInternational Financial Reporting StandardsLACPALebanese Association of Certified Public AccountantsMENAMiddle East and North AfricaMoFMinistry of FinanceMSMEsMicro, Small, and Medium EnterprisesNGONon-Governmental OrganizationsOECMOrdre des Experts Comptables MarocOECTOrdre des Experts Comptables TunisPACPAPalestinian Association of Certified Public AccountantsPAFAPan African Federation of AccountantsPAOProfessional Accountancy OrganizationPWATPalestinian Women’s Accounting Technician (Project)ROSC AAReports on the Observance of Standards and Codes (ROSC) Accounting and Auditing SAAPEU-Egypt Association Agreement ProgrammeSAISupreme Audit InstitutionSAICASouth African Institute of Chartered AccountantsSMESmall and Medium EnterpriseSMPSmall and Medium [accounting] PracticesSOEState Owned EnterprisesTFTrust FundUNCTADUnited Nations Conference on Trade and Development XBRLeXtensible Business Reporting LanguageExecutive SummaryWith support from the World Bank Micro-, Small-, and Medium Enterprises Technical Assistance Facility for MENA Trust Fund (MSME TF), the Connecting Voices of Middle East and North Africa (CV MENA) Initiative advanced interventions to increase awareness and provide technical assistance to strengthen the accounting and auditing legal/regulatory, institutional, and professional capacity to enable the development of Small and Medium [accounting] Practices (SMPs) and the MSME sector. CV MENA Initiatives included:Bootcamp workshops which gathered policymakers and stakeholders to discuss and advance key issues related to MSME financial reporting, Solutions Lab virtual conference events which brought together experts and regional counterparts to learn and engage on key themes and emerging issues related to accountancy and MSMEs,Exchange Conferences which brought regional leaders and experts together in face-to-face annual forums to share knowledge and experience on issues related to MSME reporting and governance, Maarefah Community of Practice online moderation and events which allowed participants from around the MENA region and world to connect remotely and partake in ongoing dialogue on issues inherent to MSME reporting, and Pilot Training and Research support which was linked to overall CV MENA objectives of enhancing the provision of accountancy services provided to and reporting provided by MSMEs. Over 1,000 participants were reached through four Bootcamp workshops, four Solutions Lab virtual conferences, two Maarefah events, and three Exchange Conferences. Two research studies were supported in furtherance of the goal of enhancing MSME financial reporting and accountancy. These explored the regional challenges and issues facing SMPs – which predominantly serve the accountancy needs of the MSME community in MENA, as well as analyzing the national challenges found in the provision of services to MSME clients in Palestine specifically. Additionally, through effective use of funds and by leveraging international partners and organizations active in the area of accountancy, the World Bank was also able to contribute to two training programs to the region on the subjects of international standards of accounting and auditing thereby enhancing the skill and ability of professionals serving MSME clients in MENA. In addition to these results, this initiative has had collateral impact in facilitating agreement for the free use of audit software to enhance the quality of audit services provided to MSMEs, acting as catalyst for development of projects in the area of female accounting technician training, providing convening forces to encourage development of audit regulators to strengthen MSME audit practices, and laying the foundation for audit quality assurance systems which will benefit SMP firms and their MSME clients. Although the initiative has accomplished much, the issue of strengthening accountancy for MSMEs is a long term challenge and as such must be met with continued funding, support and activities in order to make measured progress. In order to maintain achieved gains as well as to continue the battle to promote high quality in accountancy throughout the MENA region so as to benefit and support MSME growth, development and contribution to economy and society, it is recommended that engagement, financing and assistance remain strong. This report was prepared by Gabriella Kusz, Sr. Financial Management Specialist, and reviewed by Manuel Vargas, Lead Financial Management Specialist, under the guidance of Hisham Waly, Practice Manager, of the Governance Global Practice MENA Team.Introduction / BackgroundMSMEs consistently cite access to finance as a primary obstacle to growth, and empirical evidence shows that small firms face more financial constraints and are more affected by these constraints than large entities. Sound, reliable financial information is critical to expanding access to credit and promoting investment and growth in the MSME sector. Given the majority presence of MSMEs and the link between financing and growth, it is important to ensure an adequate lending infrastructure to support MSMEs. Weak accounting standards and practices, as well as low capacity to comply with relevant requirements, can restrict significantly MSME access to credit. Banks and non-banks rely primarily on collateral-based lending. They cite MSME transparency (lack of reliable or available information) as the primary reason for high loan to value collateral requirements for SMEs, followed by SMEs being perceived as less stable and with less competent management than larger corporate firms. A primary determinant of MSME access to loans is the quality of information they can provide. Corporate Financial Reporting (CFR), the combination of all the accounting and auditing activities in an entity, provides reliable, timely, and relevant financial information to a variety of stakeholders, domestically and internationally. Stakeholders such as investors, tax authorities, creditors, regulators, and employees rely on financial information for a range of decision-making purposes including extending credit and monitoring risks. A well-functioning CFR framework plays a key role in financial systems and markets, functioning as part of the international financial architecture. It is critical to creating an environment in which commercial businesses thrive. Better reporting quality improves project identification and selection, lowers the cost of capital translating into faster growth. High quality financial information is not only important for facilitating MSME access to finance, but for MSMEs in managing their internal finances, making decisions regarding their allocation of internal resources, and overall business and financial planning. MSMEs with strong systems of management accounting, internal control and financial reporting are better able to assess the health of their business, make better informed financial and business decisions, and grow and develop their operations. The socio-political and economic issues facing the countries in the region present a formidable backdrop against which all CFR work needs to be considered if reforms are to be consistently implemented and sustainable. Bank strategic documents, Financial Sector Assessment Programs (FSAP), and Reports on the Observance of Standards and Codes -Accounting and Auditing (ROSC AA) that were conducted over the past decade have documented particular CFR needs. The challenges identified demonstrate the remarkable opportunities to work with governments of the region and other development partners in order to identify solutions to the various needs in the business environment. rightcenterEnhancing Impact / Leveraging relationshipsA key aspect of the MSME TF funded CV MENA activities has been the leveraging of the Bank’s relationships with international regulators, professional associations, academics and non-profits to enhance the impact of the funding available and deliver greater than anticipated results. As an example, through generous in-kind support, CV MENA was able to provide an additional training event entitled ‘IFRS for Educators’ which trained professors from throughout the MENA in teaching international accounting standards and good practices to the MSME accountants of tomorrow. 3500098500Enhancing Impact / Leveraging relationshipsA key aspect of the MSME TF funded CV MENA activities has been the leveraging of the Bank’s relationships with international regulators, professional associations, academics and non-profits to enhance the impact of the funding available and deliver greater than anticipated results. As an example, through generous in-kind support, CV MENA was able to provide an additional training event entitled ‘IFRS for Educators’ which trained professors from throughout the MENA in teaching international accounting standards and good practices to the MSME accountants of tomorrow. MSMEs can be constrained by over-regulation, and limited capacity. These obstacles can increase the cost of doing business, or foster a culture of non-compliance and informality. MSMEs need a simplified accounting and financial reporting framework, with requirements commensurate with their size, the types of transactions they conduct, and their limited range of stakeholders. It is important that they not be hampered with unnecessary or unduly complex regulations, as many MSMEs lack the capacity or resources to comply. Thus, an ideal system would strike the appropriate balance between promoting improved financial information and lessening the regulatory burden, particularly with regard to requirements that entail significant costs, without corresponding benefits. The proposed activities should provide the required analysis to help countries take informed decisions on best simplified accounting and financial reporting framework with due consideration alignment with tax legislation and statutory audit requirements. A “one-size-fits-all” approach to financial reporting and auditing requirements ignores the capacity constraints that SMEs face and unnecessarily increases the cost of doing business for those enterprises, which generally drive economic growth. In addition, by increasing the requirements for MSMEs, governments may create disincentives for businesses to operate in the formal sector.CV MENAConnecting Voices of MENA (CV MENA) is a regional initiative of the World Bank Governance Global Practice that promotes improved financial management practices in both the public and private sectors. Its aim is to support the demands of citizens throughout the Arab World for better governance, a voice in public affairs, and social and economic inclusion. CV MENA supports capacity building in the area of financial management, facilitates the development of a professional community, and supports the sharing and transfer of knowledge both within countries and across the region. The initiative benefitted from an initial Bank-executed grant of USD 250,000 from the MENA MSME Facility Trust Fund (MSME TF) to finance the 2013 “CV MENA The Exchange” Forum. The support evolved to other activities of CV MENA, including through an additional grant of USD 450,000 of the MSME TF. The CV MENA activities supported by the MSME TF took place from FY13-16. Program ActivitiesThe MSME TF supported several CV MENA interventions: (1) Bootcamps; (2) Solutions Labs; (3) Exchange Fora; (4) Ma’arefah; as well as (5) Research and Training programs; to both increase awareness and provide technical assistance to strengthen the accounting and auditing legal/regulatory, institutional, and professional capacity to enable the development of SMPs and the MSME sector. The activities under this program intended to contribute to higher-level outcomes such as building a healthy business climate and private sector-led growth that incorporates the six pillars of CFR architecture: Accounting Standards; Statutory and Regulatory Framework; Monitoring and Enforcement; Education and Training; Accountancy Profession and Ethics; and Auditing Standards. The activities completed under the program are listed and explored in further detail below by category. BootcampsBootcamps involve gathering a group of decision makers and experts to address a particular issue through a focused and intensive discussion considering technical and non- technical factors; this group then returns with prospective solutions and a work program to help implement them. The experience is documented through Solution Papers, which are brief notes describing how a specific challenge or problem was addressed in a collaborative and pragmatic fashion. Under the MSME TF the following four Bootcamps were completed:Supporting Lebanese Association of Certified Public Accountants (LACPA) Quality Assurance & Lebanese Audit Firms Quality Control Systems Development (December 2013)This Bootcamp event sought to support the development and implementation of a system of audit quality assurance for Lebanon. Through presentations by the World Bank, Conseil Supérieur de l’Ordre des Experts-Comptables and Compagnie Nationale des Commissaires aux Comptes (CNCC / CSOEC) as well as by the American Institute of Certified Public Accountants (AICPA), roughly 25+ Lebanese SMP participants were provided practical skills training on the subject of creating internal firm systems of quality control and supporting the development of a LACPA systems of audit quality assurance. The end goal of this event was to enhance such systems so that they may be better able to ensure processes and procedures which enhance the quality of the services they provide to MSMEs. The event included a large degree of discussion and interaction between the participants and presenters and concluded with the creation of a recommendations paper for LACPA and Lebanon regarding the creation of a system of audit quality assurance in the country.The Evolving Field of Audit Regulation - Charting the Path Toward Independent Audit Regulation in Morocco & Tunisia with a View to Enhancing Audit Quality for Large and SMP Firms (January 2015)Under the broad umbrella of seeking to strengthen audit quality for audit firms of all sizes (in particular - SMPs) throughout Morocco and Tunisia, the World Bank in cooperation with the International Forum of Independent Audit Regulators (IFIAR) and the CNCC / CSOEC, the World Bank facilitated the “The Evolving Field of Audit Regulation” Workshop. This event brought together representatives from the profession, Ministries of Finance, Central Banks, Capital Markets Authorities, Supreme Audit Institutions and other relevant stakeholders to discuss the evolution of audit regulation within these two countries and to open dialogue and discussion on country progression toward independent audit regulation. This event was structured as a 2-day workshop and offered: An opportunity for the Ordre des Experts Comptables Maroc (OECM) and the Ordre des Experts Comptables Tunis (OECT) to provide an overview of the current state of audit regulation in their countries; Presentation and insight from the CNCC-CSOEC France regarding Professional Accountancy Organizations (PAOs) role in supporting and facilitating transition towards a system of independent audit regulation; Introduction to the subject of independent audit regulation, what that means for the development of audit regulation in emerging countries, and an overview of IFIAR as an organization;Insight into the systems of independent audit regulation in France, the Netherlands, Germany, and the United Kingdom; andNational discussion on how to gradually progress toward a system of independent audit regulation.A key output of this activity was a Solutions Paper which outlined key actions in progressing the gentle shift toward independent audit regulation in Morocco and Tunisia. In brief, the three tangible next steps agreed by the Moroccan working group included: (a) Enhancing the audit quality assurance system of the OECM by including external representatives on the Control Committee of the OECM which is responsible for overseeing the system of audit quality assurance; (b) Updating of the ROSC AA so as to obtain a systems-view of the country’s current accountancy environment and (c) Enhancing transparency of financial performance of entities by engaging with other stakeholder to discuss the possibility of reducing the mandatory audit threshold from 50 Million Dirham to level more appropriate to the size / needs of the Moroccan MSME sector.Egypt University Accounting Education Workshop: Building the Foundation for Strong Accountants to Serve the Needs of the Country’s Growing Micro-, Small- and Medium- Enterprise (MSME) Sector (April 2015)The Egypt University Accounting Education Workshop was held on April 22, 2015 in Amman, Jordan as a continuation of an intensive training on International Financial Reporting Standards (IFRS) for Educators, sponsored in part by the World Bank and the IFRS Foundation. This workshop brought together stakeholders of accounting education in Egypt to discuss the role and importance of accounting education in promoting a strong economy by preparing future accountants, to share insight regarding the strengths and challenges facing university accounting education in the country and to provide input for the direction of future activities in the area of accounting education reform. Emphasis was placed on the key role which university accounting education reform may play in building skills and capacity for practitioners to contribute to MSME development and broader economic growth and development. This is in particular as individuals with strong university accounting education may emerge to provide services as small and medium accountancy practitioners – supporting MSMEs in their accounts preparation, financial planning and growth, and business strategic development.Participants included Accounting Professors from both public and private universities throughout Egypt: Assiut, Cairo, Shorouk, Suez Canal, Mansoura Universities, American University of Cairo and Sadat Academy. Participants also included representatives and practitioners from the Egyptian Financial Supervisory Authority (EFSA), the Accountability State Authority (ASA), the Egyptian Society of Accountants & Auditors (ESAA), and the Syndicate of Commerce.Through intensive group discussion, participants were asked to identify and agree upon key challenges facing both the reform process and content of university accounting education programs. After thorough consideration and group facilitation, the following challenges identified by participants emerged:Procedural Challenges: The long and tedious process to change course listings and go through all the approvals significantly stifles changes and the desire to innovate and modify curriculum in line with good practices. As such, changes are typically only done every five years. Therefore, if there are significant updates on standards that justify adding a new course, they may not be able to implement this in a timely fashion.Content Challenges: There has been no input from the market as relates to course offerings. There is a new initiative to include certain stakeholders as representatives in the committees to ensure that the curriculum meets the demands of the market; however this should be sure to include MSME sector representatives to ensure their voice and needs are heard. Additionally, there are not enough professional or practical degrees and there is a gap between the education at university which can be more theoretical and the demands of the market. This causes challenges when students graduate and seek employment with SME or other enterprise as they may understand the theory behind the subject, but not how to practically apply the theory to the benefit of the enterprise. Finally, methods of teaching are not up-to-date and the emphasis is on unidirectional lecturing. In order for students to be more effective employees for MSMEs, they need to have curriculum which includes more case studies that mirror the realities of working for MSME in accounting field.Contextual / Skills Challenges: Large class sizes make it difficult for professors to provide the attention / support needed to adequately educate on a complex subject such as accountancy. Compounding this challenge is the lack of time available for research and training needed by faculty. This is particularly true when it comes to educating students on specialty areas such as the practical application of accounting theory for MSMEs. Finally, there is a lack of incentive for skills enhancement and knowledge update, especially after an academician reaches “Professor” degree / level. Reflection needs to be made regarding how academicians can be incentivized to strengthen and improve their skills set and stay abreast of changes / innovations in the marketplace (MSMEs) as well as in the profession (evolving nature of standards promulgation).A key output of this activity was the creation of an Event Summary Report and sharing of this report with key stakeholders as well as with representatives from the European Union engaged in the project entitled “Enhancing the Accountancy and Auditing Profession in Egypt” which is supported by the EU-Egypt Association Agreement Programme (SAAP) and is implemented by the Ministry of International Cooperation in Egypt.Strengthening Accounting Qualification in Egypt: Building the Foundation for Strong Accountants to Serve the Needs of the Country’s Growing Micro-, Small- and Medium- Enterprise (MSME) Sector (June 2015)The Strengthening Accounting Qualification in Egypt workshop brought together representatives from the Ministry of Finance, Syndicate of Commerce - Accountants and Auditors Section, Egyptian Society of Accountants and Auditors (ESAA) and other relevant stakeholders to discuss the key challenges facing the strengthening of qualification of SME accountants and auditors in Egypt and to lay the foundation for future activities in the area of accountancy qualification. The event identified key next steps to feed into the larger European Union (EU) funded program that has an emphasis on strengthening accounting qualification in the country.Special emphasis was placed on the following topics:Role and importance of strengthening accountancy qualification in order to support enhanced quality of service provision and benefit to SME sector and overall economy;International standards and good practice in strengthening accountancy qualifications;Case studies of international examples of countries which have undertaken successful gradual strengthening of their accountancy qualifications and their impact on MSME and entrepreneurial skills building;Discussion regarding current situation of qualification in Egypt;Facilitated discussions on strengthening accountancy qualification in Egypt;Next Steps to feed into the EU sponsored project in Egypt and also form a basis upon which World Bank may further support development of the accountancy profession in Egypt.A key outcome of this event was active group discussion regarding how the country may progress the issue of strengthening accountancy qualification. It is hoped that the commencement of dialogue on this subject may be carried further through the ongoing European Union project on the subject. During the course of the workshop, the following three areas were agreed and possible suggestions were offered for additional reflection and consideration:Strengthening of the requirements for practice as an auditor to align with the IAESB IESs including instituting the requirement for passage of professional examination, inclusion of Continuing Professional Development (CPD) ongoing education and attainment of appropriate professional experience in order to be registered with the Ministry of Finance.Development of the system of audit oversight and audit quality assurance to ensure continuous provision of high quality financial information and ongoing improvement amongst audit firms. This is particularly true for small and medium audit practitioners (who provide the vast majority of services to MSMEs) as they typically do not maintain access to quality control systems found within larger audit firms.The need for professional designation as accountants and consideration of the country context, international standards and good practices, and need for well trained professional accountants in the country. This is particularly relevant to the discussion of strengthening MSMEs as many MSMEs may not require audit services; however, they would require advice, consulting services and support of professional accountants to grow and develop their businesses. Solutions LabsrightcenterBy the NumbersWith the generous support of the MSME TF, the CV MENA Initiative has been able to reach an estimated 1,000 accounting professionals, government stakeholders and MSME participants with its combination of Solutions Labs virtual conferences, Maarefah Community of Practice events, Exchange Conferences, and Bootcamp workshops. This has allowed the message of the importance of reforming and strengthening financial reporting in strengthening MSMEs, in the context of an enabling governance framework, to be effectively spread throughout the MENA region. 3500098500By the NumbersWith the generous support of the MSME TF, the CV MENA Initiative has been able to reach an estimated 1,000 accounting professionals, government stakeholders and MSME participants with its combination of Solutions Labs virtual conferences, Maarefah Community of Practice events, Exchange Conferences, and Bootcamp workshops. This has allowed the message of the importance of reforming and strengthening financial reporting in strengthening MSMEs, in the context of an enabling governance framework, to be effectively spread throughout the MENA region. Solutions Labs operate in partnership with the Bank’s Video Conferencing system to connect participants across the MENA region to discuss and address key issues facing corporate financial reporting throughout the region. Through the MSME TF, four Solutions Lab events were conducted. These are detailed further below:International Standards on Auditing (ISA) Implementation for Small and Medium Practitioners (SMPs) (December 2013)This Solutions Lab was held on December 9-10, 2013. Prior to the presentations, participants had brief country-specific discussions on the main issues and developments regarding the subject matter. Formal presentations opened with Mr. Hechmi Abdelwahed of the Tunisian Ordre des Experts Comptables speaking on the topic of “ISA: Resources, Guides and Best Practices in ISA Training for SMPs”. Mr. Phil Cowperthwaite of the Canadian Association of CPAs added to this introduction with a presentation and discussion on the subject of “Tailoring ISA Standards and Adding Value in Micro and Small Audits”. Formal presentations were concluded with the intervention by Ms. Inge Saeys of the Belgian Association of CPAs and Board Member of the International Federation of Accountants (IFAC) Small and Medium Practices Committee, who spoke on the subject of “International Experiences in Supporting SMPs in Belgium”. Following the conclusion of formal presentations, participants were invited to participate in an hour and a half interactive discussion session where each country was given the opportunity to give comments or ask questions of the experts or other participants.During the first day, the sessions were held in Arabic for Lebanon, Jordan, Iraq, Yemen, Palestine, and Egypt. The second day sessions were delivered in French for Djibouti, Morocco, and Tunisia. On both days, live-streaming was available for anyone to join regardless of physical location.The participants were targeted to ensure their engagement in the subject and their benefit from it. In total, 177 attendees participated: 105 participants attended the video-conference in person, while 72 participants were logged in via web-streaming. In total, 88% of participants were male gender and 12% were female. Islamic Finance as a Tool for Financial Inclusion and Micro-, Small-, and Medium Enterprise (MSME) Development(February 2015)This Solutions Lab was the first MSME-focused interactive regional event convened by the World Bank for MENA representatives to address key issues facing accountancy within the framework of Islamic Finance and access for MSMEs. This initiative helped to support the development of the MSME community by providing a combination of country-focused discussion and good practice to raise awareness and address key issues of Islamic Finance. This included discussions to improve the enabling environment for MSMEs through supporting accounting measures for easier access to finance. 61 participants attended the event.Building an MSME Enabling Environment: How Can Accounting & Auditing (AA) Policy and Capacity be Developed to Meet this Objective? (June 2015)Countries throughout the MENA region are challenged by the need to devise accounting policy which balances the need for strong accounting information with the abilities and capacities of MSME businesses to undertake preparation and creation of such documentation. In some countries, there is no distinction between the basis of accounting required for the preparation of accounts by larger / listed companies and the basis of accounting required for use by smaller and medium sized enterprises. The result is that MSMEs in MENA countries face a burden in regards to their preparation of accounts as the basis required by law is in some cases overly complex / not tailored to the needs of preparers and users of MSME financial statements. To address this issue, this Solutions Lab was designed to stimulate discussion on the IFRS for SMEs basis of accountancy which offers enhanced balance of the financial reporting and capacity of MSMEs. Additionally, this Solutions Lab offered insight into the case of Pakistan and also a global view of other countries which have successfully sought to modify their basis of accounting to allow for a less rigorous / more suitable basis of accounting to meet the needs of MSMEs and their stakeholders.This Solutions Lab was designed to: (a) emphasize the importance of addressing and undertaking actions on accounting auditing policy for MSMEs in a comprehensive manner; and (b) result in participating countries reflecting upon and developing national dialogue regarding how they can best craft accounting and auditing policy and capacity in a manner which foments MSME development. This event was presented in English language with Arabic language translation for those participating in the Country Offices. There were two presenters Mr. Arif Masud Mirza, BA(Hons), FCCA, Association of Chartered Certified Accountants (ACCA) who discussed the issues related to creation and application of MSME accounting policy in practice and specifically the cases seen in Pakistan and Michelle Fisher, Senior Technical Manager, International Accounting Standards Board (IASB) who spoke regarding the IFRS for SMEs and the Micro Enterprise Reporting Initiative as well as the need for balance in the creation of national policies for accountancy for MSME enterprises. In satisfaction surveys, an overwhelming majority of respondents noted that this event achieved its stated objectives, that the content, format and quality of presenters was excellent and that participants’ skills increased as a result of this event. rightcenterWhat are MSMEs Saying?“It was a pleasure to get to know the team of the World Bank [through this event]. The situation of instability that Tunisia has known since the revolution, enabled us, as [audit] professionals, to measure the importance of the support we provide to small and medium enterprises and awareness of deficiencies and improvements we should try to put in place to give them a more effective role.”SMP Participant, Solutions Lab “Role and Ability of PAOs to Support SMP / SME Development During Times of Instability and Fragility” 3500098500What are MSMEs Saying?“It was a pleasure to get to know the team of the World Bank [through this event]. The situation of instability that Tunisia has known since the revolution, enabled us, as [audit] professionals, to measure the importance of the support we provide to small and medium enterprises and awareness of deficiencies and improvements we should try to put in place to give them a more effective role.”SMP Participant, Solutions Lab “Role and Ability of PAOs to Support SMP / SME Development During Times of Instability and Fragility” Role and Ability of Professional Accountancy Organization (PAO) to Support SMPs / SME Development During Times of Instability and Fragility (March 2016)In recognition of the strong link between SMPs and SMEs and in order to best position PAOs to support SMP establishment, development and provision of high quality services during times of political, social and / or economic challenge, the “Role and Ability of PAOs to Support SMPs / SME Development During Times of Instability and Fragility” Solutions Lab was developed. This Solutions Lab sought to address the key issues of: (a) engaging, communicating and advancing SMP / SME communities during times of instability and fragility; (b) key success factors in undertaking pilots/ projects which have been able to target and enhance SME / SMP needs; and (c) recommendations and suggestions for other PAOs, audit firms, and others operating in times of instability. This Solutions Lab featured presenters from the Ordre des Experts Comptables de Tunis (OECT) – Mr. Wassim Khrouf - who shared his experience and knowledge in operating during times of political instability to support SMPs, the South African Institute of Chartered Accountants (SAICA) – Mr. Patrick Kabuya – who shared the experiences of SAICA South Africa in operating in times of economic instability and the American Institute of Certified Public Accountants (AICPA) – Mr. George Willie - who lent his knowledge on disaster preparedness and planning ahead of natural and man-made disasters. Exchange ForumThe Exchange is a major annual forum, which provides a channel for dialogue, enabling countries to share experiences and good practices. It promotes intra-regional cooperation and stimulates interest in improving governance and financial management in the public and private sectors, including corporate financial reporting for MSMEs. The following details the three Exchange conferences, co-financed by the MSME TF, which have occurred in each of 2013, 2014 and 2015: “Strengthening Accountancy as a Foundation for MSME Sector Development and Job Creation” / Amman, Jordan(June 2013)This Exchange event was positioned at the crossroads of three different, yet interrelated topics: MSMEs development, accountancy (broadly defined to include budgeting, planning, accounting, reporting, auditing, and taxation) and job creation. This Exchange conference offered several sessions which explored the importance of strong accountancy in underpinning MSME growth, development and access to finance – all with a view to aiding this sector of the economy in contributing to job creation. As the countries of the MENA region seek to transition and provide both social and economic opportunities to their citizens, The Exchange functioned as a catalyst bringing together 100+ high level policy makers, regulators, academics, the accountancy profession, Civil Society Organizations (CSOs) from throughout the region to discuss how we may achieve this objective together.Event Session HighlightsOne Size Fits All? Developing Financial Reporting Standards for Micro Entities. This session featured speakers from United Nations Conference on Trade and Development (UNCTAD) and the South African Institute of Chartered Accountants and touched upon current efforts to develop and devise frameworks of accounting which are best suited to the needs of Micro- Enterprises as well as cases of countries and organizations which had successfully developed and implemented such standards. Creating Legislative Frameworks which Facilitate MSME Accountancy. This session explored cases of countries throughout the MENA and Mediterranean region which had undertaken legislative reform and changes in accountancy order to best support MSME development.Regional Cooperation: Working Together to Further Financial Reporting. This session provided insight into the regional professional accountancy organizations (PAOs) in the region which support accountancy development and reform at a regional level. From ROSC AA to Reform. This session discussed and presented the relationship between the World Bank’s ROSC AA and the development of accounting reform projects. Accountancy Education, Certification and CPD - the Key to Strong Financial Information and Growth. Research and exploration into the need for strengthening accounting education at the university and PAO level was presented as well as recent studies and analysis of accounting education at the global level. Building Accounting and Financial Skills Necessary for MSME Growth. Accounting Technicians are playing an increasingly important role in supporting MSME growth and development – this session engaged presenters and participants in active dialogue on the subject of Accounting Technicians in the broader accounting profession. Enhancing Women Entrepreneurs' Capacity in Accountancy. This session featured presenters from successful MSME development projects who spoke on the role and importance of accountancy in MSME creation, development and access to finance. Supporting SME / SMP Development and Growth. Presentations by the IFAC and the Tunisian professional association highlighted work which both organizations had been undertaking to support SME / SMP development at the national and international levels. Furthering the Quality of MSME Financial Information through Sound Systems of Quality Assurance. Quality assurance systems may play an effective role in improving the quality of audit services – in particular for those Small and Medium audit Practices (SMPs) which predominantly provide services to MSMEs. Discussion focused on the building blocks for audit quality assurance systems and international good practices in the development of such systems. A Fine Balance: The Role of Regulation in Furthering MSME Development. Discussion centered on the role which regulators may play in enhancing financial reporting quality and in improving the overall quality of services provided by auditors to MSME clients. The event concluded with workshop on the subject of teaching IFRS for SMEs provided in coordination between the World Bank and the IFRS Foundation. Specific focus of this training session was placed on supporting instructors (whether they be professors or PAO Staff) in understanding the framework of IFRS for SMEs education, the key aspects of IFRS for SMEs which differ or should be highlighted during instruction, and key methods and case studies for transferring knowledge on the standards. “Strengthening Financial Management Institutions - Strengthening MENA” Exchange Conference / Abu Dhabi, UAE (June 2014)The June 2014 CV MENA Exchange event was designed to focus on the important role which financial management institutions play in both public and private sectors in facilitating the achievement of strong MENA region countries, poverty reduction and shared prosperity.rightcenterA Comprehensive ApproachThe CV MENA Initiative was designed and undertaken in a manner which allowed separate activities to build upon one another and to mutually reinforce overarching goals and objectives. One such example can be seen through the inclusion of a session on Islamic Finance and its potential opportunities for SMEs presented during the June 2014 Exchange Conference. Discussion and feedback initially obtained from this conference session helped lay the groundwork for the development of a virtual Solutions Lab conference on this subject as well as a Maarefah educational event which drilled down to the particular subject of Islamic banking. 3500098500A Comprehensive ApproachThe CV MENA Initiative was designed and undertaken in a manner which allowed separate activities to build upon one another and to mutually reinforce overarching goals and objectives. One such example can be seen through the inclusion of a session on Islamic Finance and its potential opportunities for SMEs presented during the June 2014 Exchange Conference. Discussion and feedback initially obtained from this conference session helped lay the groundwork for the development of a virtual Solutions Lab conference on this subject as well as a Maarefah educational event which drilled down to the particular subject of Islamic banking. The event welcomed over 200 participants and was structured as two streams: one focusing on public financial management and the second focusing on Corporate Financial Reporting (CFR). CFR Sessions were designed to focus on the importance of institutions and the strengthening of structures, systems and operations for those institutions integral to the production of high-quality financial information for the private sector. In the MENA region private sector, MSMEs provide over 80% of the region’s total business activity. Although this element of the economy plays such a strong role, it continues to face extreme obstacles in the areas of financial institution lending capacity, enterprises’ creditworthiness, liquidity of the financial intermediaries, and the availability of risk-sharing instruments. Compounding these challenges are the non-conducive legal and regulatory frameworks, poor financial infrastructure, information asymmetry, and a weak judicial and legal system. Sound, reliable financial information is critical to expanding access to credit and promoting investment and growth in the MSME sector. Attendees representing Ministries of Finance, PAOs, audit firms, regulators, non-governmental organizations, international organizations, capital market authorities, universities and others converged for this event. Event Session HighlightsCorporate Financial Reporting Reform. Panelists shared their experience in driving CFR reform within their own countries, as well as abroad. Discussions focused on the challenges facing CFR development and the manner in which panelists and their organizations worked to overcome such challenges and achieve success. Charting the Path Toward the Adoption and Implementation of IFRS in general, and IFRS for SMEs in particular. Participants from the World Bank, Egypt, Morocco and others presented their national experiences in developing plans for adoption and implementation of IFRS and IFRS for SMEs. Discussions centered on what was learned from this process, providing insight and guidance to all attendees about their own respective national efforts. Islamic Finance - An Opportunity for Large and SME Businesses. Attendees had an opportunity to hear from experts from regional organizations and firms, the Islamic Finance Knowledge Center (IFKC), and the World Bank. They shared their perspectives regarding the rise of Islamic Finance, its development within MENA and Southeast Asia— and opportunities for governments, accountancy professionals and MSME businesses around the world. Audit Regulation and Quality Assurance – Furthering the Quality of Services Among Large and SMP Firms. This session brought together panelists from the regulatory sector, international organizations and the profession to showcase the issues, challenges and experiences related to audit regulation and quality assurance for listed companies and SMEs alike. Integrated Reporting: An Introduction to the Concept and Practice. The session provided a foundational introduction to the concept of integrated reporting. Representatives from the Harvard Business School, the Global Reporting Initiative, the American Institute of Certified Public Accountants Business Reporting, Assurance & Advisory Services and XBRL Unit, and ARAMEX Corporation offered an overview of the subject of integrated reporting. The Role of Professional Accountants as Business Advisors Supporting MSME Development. Several views were presented regarding the positioning of professional accountants as advisors to businesses, as well as in facilitating the development of micro-, small- and medium-sized enterprises. To supplement and build upon the momentum of the Exchange Conference event, the day following the conclusion of the conference, a workshop event entitled “Strengthening SMPs as Supporters of MSME Development" was held. This event was co-organized in cooperation with IFAC and the Association of Accountants and Auditors (AAA) of the UAE and offered participants from the MENA Region innovative insight into how best to support SMPs in their provision of high quality services to MSMEs. Event sessions focused on the following issues:Appropriate application of ISA, efficiency advice for practitioners, and current guides and resources for their proper application. Provision of information technology support to SMPs and how to support and select appropriate audit software. Development and research in managing SMP practices. Expanding SMP services beyond audit and toward supporting integrated reporting and other business advisory services crucial to MSME development. “From Vulnerability to Resilience” Exchange Conference / Hammamet, Tunisia(May 2015) This Exchange Conference focused on the transition away from a state of vulnerability towards increased resilience. Vulnerability and resilience represent two related yet different approaches to understanding the response of systems and actors to change. Drawing together over 200+ participants from Ministries of Finance, Supreme Audit Institutions (SAIs), PAOs, State Procurement Departments, State Owned Enterprises, universities, Non-Governmental Organizations (NGOs), and other key ministry representatives and stakeholders of governance reform this event offered sessions exploring the importance of strong governance institutions in managing public resources, supporting service delivery, promoting citizen engagement, and underpinning Micro-, Small- and Medium-Enterprise (MSME) development and economic growth.Ma’arefah Ma’arefah (“knowledge” in Arabic) is the CV MENA online Community of Practice (CoP) that serves as a forum for ongoing dialogue and continuous peer-to-peer and expert knowledge exchange. Ma’arefah serves to implement and sustain the results of The Exchange, as well as to build upon and extend these benefits to those unable to personally attend Boot Camps and Solutions Labs. Under the MSME TF, Ma’arefah online moderation was made possible and two specific online events were hosted which addressed issues / areas of interest to MSME participants:Basel III and the Implications for Islamic Banking – During the Solutions Lab event entitled “Islamic Finance as a Tool for Financial Inclusion and MSME Development” participants noted the potential role which Islamic Finance may provide in enhancing opportunities for access to finance. In particular, participants were drawn to the ability of Islamic Finance to provide bank lending opportunities to MSMEs. During the Solutions Lab event question and answer session, it was noted that certain aspects of Basel III requirements may impact such efforts. As such, the Maarefah Event “Basel III and the Implications for Islamic Banking” was developed which allowed further exploration of this topic and provided online participants the ability to delve deeper into the Basel III requirements for rightcenterResponding to the needs of MSmes400+ MENA region SMP accounting practitioners were asked the following question “How likely do you think SMEs are to seek assistance from their accounting firm in the implementation of Integrated Reporting in the next five years?” Overwhelmingly (76%) noted the likelihood of having to support MSMEs in integrated reporting activities. With funding from the MSME TF, CV MENA designed and delivered an online virtual learning session on integrated reporting.3500098500Responding to the needs of MSmes400+ MENA region SMP accounting practitioners were asked the following question “How likely do you think SMEs are to seek assistance from their accounting firm in the implementation of Integrated Reporting in the next five years?” Overwhelmingly (76%) noted the likelihood of having to support MSMEs in integrated reporting activities. With funding from the MSME TF, CV MENA designed and delivered an online virtual learning session on integrated reporting.banking institutions and how and what impact this may have on Islamic Banking and MSME access to finance. Integrated Reporting: An Introduction –The research report entitled “A SNAPSHOT OF KEY ISSUES FACING SMPS AND THEIR SME CLIENTS IN THE MENA REGION” noted the importance of the growing field of Integrated Reporting within the MENA region and the emerging role that this is expected to play for SMEs. Surprisingly, this research noted that an estimated 62% of SMP respondents in MENA Sample Countries reported that their clients had sought their help on this topic, versus the global average of 29% of SMP respondents world-wide. Additionally, when asked regarding what their expectation was regarding MSMEs requests for help with integrated reporting in the future, over ? of SMP respondents noted the likelihood of such requests for assistance. In order to prepare SMP practitioners and facilitate assistance to MSMEs on this subject, an introductory session on Integrated Reporting and an open discussion regarding the value and role of such reports and information was developed and delivered to the region to commence dialogue on the issue. Research and Training Innovative research and training pilots were supported as they related to the broader goal of improving the quality of financial reporting and audit practices for MSME clients. These are detailed further below:Research Paper: A Snapshot of Key Issues Facing SMPs and Their SME Clients in the MENA Region(May 2014)To collect and analyze research on this subject, CV MENA collaborated with the International Federation of Accountants (IFAC)'s SMP Committee Quick Poll Survey which was established in 2011 to obtain key views and perspectives on the challenges and issues facing SMPs and their SME clients in the key focus countries of Egypt, Morocco, Tunisia, Palestine, Lebanon, and Jordan. To facilitate MENA region participation and data, experts traveled to each of these six countries and presented on why such Quick Poll information is important for understanding SMP growth, financial sector development as well as providing insight to the important link between SMPs and their SME clients. Through the provision of six on-location presentations and survey polling stations, the experts encouraged the participation of 403 MENA region SMP representatives in the Quick Poll. Utilizing the data collected, a summary report entitled “A SNAPSHOT OF KEY ISSUES FACING SMPS AND THEIR SME CLIENTS IN THE MENA REGION” was produced which identified, among other issues, the growing field of Integrated Reporting within the MENA region and the importance of this field to SMEs. Training: IFRS Training for Educators Regional Workshop (April 2015)The three-day IFRS for Educators workshop was sponsored in part by the World Bank and the IFRS Foundation. This workshop which was held in Amman, Jordan on April 19-21, 2015 was attended by roughly 60 accounting professors from throughout the MENA region (Lebanon, Jordan, Palestine, and Egypt) and instructors. Key sessions included focus and instruction on: the benefits of framework-based IFRS teaching; the link between objectives, concepts, principles and rules in IFRS; and training on how to use select teaching material to develop students’ ability to make the judgments and estimates to apply IFRS. The overarching goal was to enhance the ability of instructors to transfer IFRS knowledge to students – thereby better preparing graduates for the accounting needs of MSMEs upon entrance to the marketplace. Research Paper: The Adequacy of Accountancy Professionals in Meeting the Needs of Palestinian MSMEs (April 2016)rightcenterStartling statistics“91 % OF PALETSINIAN MSME RESPONDENTS NOTED THAT THEY DID NOT USE ANY FORM OF ACCOUNTING STANDARDS WHEN PREPARING THEIR FINANCIAL REPORTS”Research conducted under the “Adequacy of Accounting Professionals in Meeting the Needs of Palestinian MSMEs” provided some startling results – only around 9% of the roughly 400 MSMEs surveyed used any form of accounting standards.The lack of use of any standards whatsoever calls into question the accuracy and usefulness of the current form of financial accounting and reporting utilized by most MSMEs. This suggests a strong opportunity for engaging the broader accountancy profession in supporting MSME accounting and financial reporting accuracy and in providing MSMEs with the financial information necessary to undertake effective resource allocation, financing and business decisions. 3500098500Startling statistics“91 % OF PALETSINIAN MSME RESPONDENTS NOTED THAT THEY DID NOT USE ANY FORM OF ACCOUNTING STANDARDS WHEN PREPARING THEIR FINANCIAL REPORTS”Research conducted under the “Adequacy of Accounting Professionals in Meeting the Needs of Palestinian MSMEs” provided some startling results – only around 9% of the roughly 400 MSMEs surveyed used any form of accounting standards.The lack of use of any standards whatsoever calls into question the accuracy and usefulness of the current form of financial accounting and reporting utilized by most MSMEs. This suggests a strong opportunity for engaging the broader accountancy profession in supporting MSME accounting and financial reporting accuracy and in providing MSMEs with the financial information necessary to undertake effective resource allocation, financing and business decisions. In recognition of the value of proper accountancy and the role of accountants in contributing to MSME growth and development, this paper explored the current levels of quantity and quality of accountancy professionals in Palestine and the sufficiency of these levels to meet the needs of the country’s MSME population. Given the unique needs and financial constraints experienced by MSMEs when seeking external accounting services, these firms typically source their external accounting services from SMPs as opposed to larger international accounting firms. As such, special emphasis was placed on the adequacy of SMPs and independent accountancy professionals and technicians (for example, bookkeepers) to meet the needs of the MSME sector in Palestine. To better understand the relationship between MSMEs and the accountancy profession as well as other areas of need this research undertook: A review of existing literature on MSMEs and the accountancy profession;A survey of a representative sample of MSMEs regarding their use of accountants and their financial management needs;A study on the current number of accountants conducted by desk review and interviews with relevant stakeholders; A study on the qualifications of accountants; andA gap analysis of whether the current quality and quantity of accountants meets the financial management needs of MSMEs.The following is an overview of the key findings and areas of recommendation:Undertake awareness building regarding the important role which accountants and auditors may play in MSME financial reporting, access to finance, growth and development. Strengthen accounting curriculum at universities so as to better meet the needs of the market. Provide opportunities for specialization amongst accountancy personnel. Support elaboration of the PACPA Audit Quality Assurance System. Organize and unify the broader accountancy profession. This paper also highlighted areas for future examination and research and provided a guide for ongoing efforts in this regard.The paper was disseminated with the Palestinian participats to the Solutions Lab of March 2016 on the Role and Ability of Professional Accountancy Organization (PAO) to Support SMPs / SME Development During Times of Instability and Fragility.Training, Educating and Facilitating Employment of Female Accounting Technicians Amongst MSMEs - Palestinian Women’s Accounting Technician (PWAT) initiative (2015): During the first Exchange Conference (June 2013) the session entitled “Enhancing Women Entrepreneurs' Capacity in Accountancy” commenced an ongoing dialogue on the subject of entrepreneurs, accounting technical skills and MSME growth and development. As this dialogue continued, an interest emerged amongst Palestinian stakeholders (the Ministry of Women’s Affairs, the Palestinian Association of Certified Public Accountants and the AMIDEAST training organization) to undertake a pilot project training marginalized women in foundational accounting skills and knowledge so as to become bookkeepers for MSME businesses. In coordination with the World Bank, under the PWAT Project 70+ women candidates were trained in accounting education and job preparedness and through a coordinated employment fair were exposed to MSMEs and SMPs with an interest in seeking accounting support. Leveraging OutcomesThe MSME TF co-financed CV MENA activities that have enhanced the professional skills and knowledge of numerous attendees, participants and observers, as well as influencing other outcomes. The following examples highlight some of the broader influence which MSME TF activities have had on MSME financial reporting, auditing and services: Enhancing the Quality of MSME Audits by Increasing Access to SMP Audit Software - Memorandum of Understanding (MoU) Between Arab Federation of Accountants and Auditors (AFAA) and the CNCC/ CSOEC to Provide Small and Medium Audit Practice Software for Free: During the Exchange Conference (June 2014) session on audit quality, a conversation began between audit professionals from the region and presenters from the French Direction du Développement et des Partenariats Internationaux of the CNCC / CSOEC. This conversation stemmed from the presentation by representatives from the CNCC/CSOEC who had noted that they had developed software specifically suited to the needs of SMPs so as to best suit their MSME clients and deliver high quality audits on a smaller scale. MENA region professionals noted that they had been struggling with this same challenge – how to deliver high quality audits for MSME clients when the market is not providing cost-effective and accessible audit software to SMP practitioners. Through successive MSME TF activities (Solutions Labs and Bootcamps) this conversation developed into organizational dialogue between the AFAA and the CNCC/CSOEC regarding the possible use of the CNCC/CSOEC software. The result has been the signing of an MoU between these two entities to provide the aforementioned audit software to MENA region professional associations of accountants and rightcenterPalestinian Women’s Accounting Technician Project (PWAT)The MSME TF and CV MENA activities have acted as a catalyst for the development of new and emerging ideas in the area of accountancy / MSME development. In the case of the PWAT project, the Exchange conference’s session on Gender and MSME development provided the foundation for Palestinian counterparts to support training for women accounting technicians to support MSME businesses. Feedback on the PWAT project has been strong with many of the female trainees expressing that the skills acquired would assist in the attainment of employment OR in their own start-up SMEs.3500098500Palestinian Women’s Accounting Technician Project (PWAT)The MSME TF and CV MENA activities have acted as a catalyst for the development of new and emerging ideas in the area of accountancy / MSME development. In the case of the PWAT project, the Exchange conference’s session on Gender and MSME development provided the foundation for Palestinian counterparts to support training for women accounting technicians to support MSME businesses. Feedback on the PWAT project has been strong with many of the female trainees expressing that the skills acquired would assist in the attainment of employment OR in their own start-up SMEs.their members at no charge – and an agreement to engage in training and education on the application of the software so as to ensure quality provision of audit services for the MSMEs in the region. Strengthening MSME Financial Reporting By Strengthening Regulators - National Dialogue and Study Report Regarding the Creation of an Independent Audit Regulator in Tunisia: The issue of audit quality and the impact which poor quality audits may have on MSMEs and the economy has been at the heart of CV MENA initiative activities co-financed by the MSME TF. In Tunisia, after a successful Bootcamp event on independent audit regulation and the need for oversight over SMP auditors, the OECT (Tunisia) and the World Bank co-hosted a follow on event to convene stakeholders from the government and the private sector to continue national dialogue regarding the need for enhanced regulation of the audit profession. Following this second event, the government and profession undertook a study to outline a vision for the future of the accounting and auditing profession and the role of regulation in promoting greater quality audits for MSME clients.Creating Audit Quality Assurance for MSME Clients in Lebanon - Enacting a System of Audit Quality Assurance Targeted to MSMEs in Lebanon: Following the conclusion of the Bootcamp workshops in December 2013, a Solutions Paper was provided to the Lebanese Association of Certified Public Accountants (LACPA) in December 2013 which provided recommendations for moving forward in the establishment and operation of a system of audit quality assurance which would effectively target SMP practitioners so as to enhance their quality and improve services provided to MSMEs. In the months following the conclusion of this event and resulting report, the World Bank worked to engage with the LACPA and the AICPA to design and develop a training program for Lebanese reviewers who could oversee and inspect SMP audit firms under a system of audit quality assurance. In November 2015, the AICPA flew experienced American trainers to Beirut to conduct a workshop and share their knowledge and materials on training with roughly 20 reviewers to support their education and preparation in conducting audit quality reviews under the emerging LACPA system. Lessons Learned / Considerations for the FutureIn reflecting on the achievements of the past three years under the CV MENA activities, the following highlight some of the key lessons learned:Leveraging networks and relationships with international NGOs, professional associations and academia are integral to delivering results. Being flexible with regards to the focus / theme of planned and anticipated events is critical to ensuring relevance of events / activities, as financial reporting and accountancy environments are in a constant state of evolution and therefore an event envisioned 2 years in advance may need to be modified closer to the date of delivery in order to ensure appropriateness.Engaging beyond the close of a financed event / activity is crucial to achieving outcomes and impacts needed to further the ultimate goal – in the case of these activities – enhancing accounting and auditing quality for MSMEs.Following up with counterparts on a regular basis to continue the momentum of activities is important to ensuring that issues raised and ideas developed during workshops and conferences do not fall to the wayside, but rather are remembered and acted upon in due time.Nothing can be accomplished without financing. Although coordination, communication and engagement are important, if consistent financing is not available it is very difficult to make any progress. In regards to next steps, Team Task Leaders and Project Coordinators will undertake the following:Continued follow up with national counterparts and key contacts on the subjects of MSME financial reporting, accounting and auditing.Continue support to the stakeholders in the MENA region which have actively participated in CV MENA activities. Continue efforts to source funding for MSME-related financial accounting / reporting / auditing needs for the region, in order to be able to continue to deliver and build upon the successes seen under the MSME TF-supported CV MENA activities. ConclusionThe MSME TF co-financing of the various CV MENA activities noted in previous sections have had significant impact on raising awareness and developing skills related to the quality of financial reporting and auditing provided to MSMEs. The most important impacts have been the increase in awareness of the need for strengthened accounting and auditing for MSME clients by engaging them in dialogue and discussion on the issues, serving the needs of MSMEs and their SMP service providers through provision of virtual events, in-person trainings and facilitated workshops to convene leaders and policymakers on the subject and catalyze further action, and by supporting ongoing dialogue and project work on the subject beyond the scope of CV MENA activities. The issue of strengthening accountancy for MSMEs is a long term challenge and as such must be met with continued funding, support and activities in order to make measured progress. In order to maintain achieved gains as well as to continue the battle to promote high quality in accountancy throughout the MENA region so as to benefit and support MSME growth, development and contribution to economy and society, it is recommended that engagement, financing and assistance remain strong. ................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- strengthening financial reporting strengthening msmes
- international federation of accountants
- executive blackpool council
- philippines metro manila brt line 1 project
- 410 13 water and environment management framework
- 1 executive summary nyserda new york state energy
- program for residents
- m21 4 appendix d veterans affairs
- are you burning out siue