Enhancing Accounting and Audit Quality In Georgia
The efforts of SARAS are aimed at enhancing financial transparency and effective economic decision-making in Georgia through implementation of European oversight and international accounting and auditing standards that place the organization and Georgia on the same level as EU Member States.
In that context, within the twinning project Ilia State University conducted a survey in February-July 2020 on the impact of the regulations adopted in Georgia over the last four years in the areas of accounting, reporting and auditing and the changes that may need to be introduced in the regulatory framework to achieve a closer alignment with EU Audit and Accounting Directives.
The main results of the survey point out that the new regulatory framework succeeded in improving significantly the transparency of corporate financial reports, the understandability of the information provided in corporate financial reports, and the timeliness of providing the information, while the qualitative characteristics of the financial statements appear to meet the requirements of the external users. Furthermore, there is the strong belief that the adoption of the internationally recognized set of accounting standards from the Georgian companies provides them the opportunity to promote local statements and enhance their value.
Despite the fact that a marginal majority of the participants asserts that it is not possible to comply with the requirements of the new accounting framework without additional efforts and costs, the overall regulatory impact assessment remains positive.
At the same time the new audit framework seems to advance the audit quality while the new audit report clearly distinguishes the roles and responsibilities of the auditor and corporate management.
As has been recognized by the majority of survey participants, SARAS initiatives and actions not only play a vital role in the establishment and enforcement of the new accounting requirements but also affect the quality of audit and corporate reporting.
The RIA report is available here.