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The Government of the Republic of Serbia

In the service of citizens

Government composes Bill on accounting and auditing in line with EU directives

Belgrade, 11 January 2006

Serbian Assistant Minister of Finance Goran Andjelic said he expects that the government will pass the Bill on accounting and auditing at its session tomorrow, and forward it to parliament for adoption.

Goran Andjelic at today's press conference

At a press conference, Andjelic said the Bill deals with book keeping, evaluation of property and liabilities, revenues and expenses, composition and processing of financial statements, internal auditing, as well as with the terms and manner of financial report auditing.

He pointed out that the Bill refers to business organisations, cooperatives, banks and other financial organisations, insurance companies, financial lessors, voluntary pension funds and their managing organisations, broker-dealer companies and other legal persons.

The Bill further refers to natural persons who run their own businesses for the purpose of acquiring financial gain and apply the double-entry book keeping system, as well as to foreign subsidiary companies, he said.

Andjelic specified that the Bill excludes budgets and budget beneficiaries, and organisations providing obligatory social security services.

The Bill envisages full implementation of the International Accounting Standards (IAS) for large and medium-sized companies, legal persons performing financial statement consolidation, and for all securities issuers, said Andjelic adding that small companies and entrepreneurs are not obliged to apply these standards but can do so if willing.

Auditing of annual financial statements will be obligatory for legal persons that fully apply the IAS, said Andjelic, and tax authorities will oversee reports by small enterprises and entrepreneurs by order of the Minister of Finance.

He explained that auditing companies will be issued a working licence by the finance ministry, and the ministry will also administer company registers and supervise their work at least once a year.

Another novelty is the establishing of a National Auditing Committee that will oversee the implementation of EU directives on accounting and auditing and of the IAS, and propose strategies and plans for improving the quality of financial reporting, said Andjelic.

He said the Bill also envisages the foundation of a Chamber of Registered Auditors six months after the Bill is passed, which will issue, extend and revoke licences and certificates to registered auditors, and the finance ministry will supervise the Chamber's work.

The Bill will regulate professional occupations such as registered auditor and registered internal auditor, he said.

While composing the Bill, the government took care that everything is in line with EU directives on accounting and auditing but it also took into consideration the current market state in Serbia, said Andjelic and added that the World Bank was consulted on this matter and that it gave positive assessment.