On 13 April 2016, a conference “Ukraine’s Accounting and Audit Reforms – A European Future” was organised in Kiev, Ukraine, by the Human Dynamic's led EU-funded technical assistance project “Technical Assistance in the Ukrainian Financial Sector’s Priority Areas” (EU-FINSTAR). The main focus of the conference was the recently proposed Accounting and Audit legislation reforms, which are before the Ukraine Parliament. This Human Dynamics organised event provided a space for discussing the reforms and its benefits.
Following the event the Ambassador to the EU, Mr Jan Tombinski spoke with the large media contingent that attended, underlining the importance of the project, but first spoke on the main thrust of the proposed legislative reforms:
"There are 4 key principles: transparency, independent, stronger supervision and more choice to promote market. The adoption of accounting and auditing laws are very important for Ukraine. The trust of people will be returned"
The conference's programme consisted of two discussion panels about what were the key features of proposed changes to Law on Accounting and Financial Reporting and to the Law on the Audit of Financial Statements and Audit Activity in Ukraine. Active professional discussions on the draft laws on accounting and audit took place and this free event was an opportunity for participants to exchange their views and have their opinion heard.
It was proposed that the successful reform of Ukraine’s financial sector and business environment is essential for integration into cross-border markets and that this requires key conditions to be present in Ukraine that aligns with European and international standards and best practice. International Financial Reporting Standards (IFRS) are internationally recognised accounting standards, and the Association Agreement covered Ukraine’s adoption and implementation of the IFRS. The benefits to Ukraine from effectively implementing the IFRS include:
The implementation of internationally-recognized accounting standards will make an impact to Ukrainian businesses and citizens with improved financial transparency.
Ukraine's Deputy Finance Minister, Elena Makeyev, expressed her support for the proposed legislation, particularly that the proposed changes will reduce the amount of paperwork needed to file tax returns:
"Reducing the volume of documentation needed, shall reduce the ... fact that an improperly placed comma, obligatory or not, holds up the primary document - and this will reduce the number of inspections and the number of claims of tax authorities and, in the end, the number of complaints related to tax faced by the State fiscal service authorities"
A further benefit alluded to during the conference will be that the reforms will bring Ukraine closer to achieving the Ukraine's Minister for Economy's objective, stated in 2015, of ensuring Ukraine is ranked in the top twenty in the world in the World Bank's Ease of Doing Business Report.
The proposed legislation will also draw the Ukraine closer to EU requirements, namely the EU requirements for external audit are set forth in Directive 2014/56/EU (for all audits) and Regulation 537/2014 (for auditors of public interest entities). Currently, Ukraine’s audit requirements do not approximate to EU requirements and the standards applied in many audits in Ukraine do not approximate to the standards and best practice set forth in international standards on audit, as issued by the IAASB. The draft Audit Law prepared by the Ministry of Finance approximates to the EU Directive and Regulation and establishes effective enforcement of the international standards. It includes a model for regulating Ukraine’s audit profession and will implement a public oversight model that approximates to the EU Directive.
The conference's programme drew together a range of key stakeholders from across Ukraine's financial sector, providing an open forum to exchange ideas. Among the day's speakers were Ambassador Jan Tombinski, head of the EU Delegation to Ukraine; Klavdiya Maksymenko, acting Country Director of the World Bank; Olena Makeieva, Deputy Minister of Finance of Ukraine; Oleg Kantsurov, First Deputy Head, Main Department of Economic Policy Development of the Presidential Administration; Jon Hooper, EU-FINSTAR Senior Expert on Accounting and Auditing; Tetyana Kureza, Adviser to Head of Verkhovna Rada Tax & Customs Committee; Kateryna Rafalska, Director of Financial Reporting Analysis and Prudential Supervision, National Commission for Securities and Stock Market and Valentyna Legka, Auditor, member of the Working Group under parliamentary committee, Ukrainian Federation of Professional Accountants and Auditors.
For those who were unable to attend the free event, www.stockworld.com.ua streamed the event live online. The event was followed by extensive media coverage, which reported on the discussions. The full recording of the conference is available in the video gallery.