Slide 1 World Bank Conference on Proposed Regional Initiative to Strengthen Auditing & Accounting in South East Europe Brussels, 30 June 2004 David Devlin – FEE President (Fédération des Experts Comptables Européens - European Federation of Accountants)

Slide 2 FEE  41 Member Bodies of professional accountants  From 29 countries  With 500,000 members  Working to restore confidence in our  profession  integrity, and  high standards 

Slide 3 FEE’s Activities (1)  Financial Reporting  IFRS  Enforcement  Auditing  ISAs  Quality Assurance  Public Oversight

Slide 4 FEE’s Activities (2)  Corporate Governance  Financial Reporting & Auditing Aspects  Safeguarding Integrity  SMEs  Conference in Spain - October

Slide 5 Reforms of Accounting & Auditing Should be influenced by :  Reforms of International Corporate Regulation  The Role of Others in Corporate Governance  Standard Setters  Accounting Profession

Slide 6 International Corporate Regulation IFAC IAASBEthics PIOB International Corporate Regulation Accounting Standards Audit Oversight Enforcement Corporate Governance Company Law Sarbanes - Oxley SECPCAOBEU GovernmentsCESRCommission European Governments Legislation & Regulation Audit Reform

Slide 7 The European Regulatory Framework  Aimed at:  Improving quality of regulation  Removing unnecessary barriers to trade  Harmonisation used to be the priority  Now more flexible systems  Framework directives  Subsidiary regulations  EU an excellent benchmark for reforms in South East Europe

Slide 8 Financial Reporting  Fourth & Seventh Directives  Annual accounts for limited companies and groups  Modernised recently  IFRS Regulation  IFRS for listed companies at least  2005 deadline

Slide 9 Statutory Audit  Confirms reliability of financial reporting  Fourth Directive requires audit, except small companies  New 8 th Directive proposed  International Standards on Auditing  Principle-based Auditor Independence  Public Oversight  Regulatory Co-operation

Slide 10 Drivers of Audit Quality Include :  High educational requirements  academic  practical  continuous training after qualification  Robust quality assurance systems  Within accounting firms  External monitoring  Effective disciplinary systems

Slide 11 Enforcement of Standards Providing good quality legislation and good quality standards is not sufficient. It is equally important to put in place enforcement mechanisms to strengthen rigorous application of high quality financial reporting standards in the private sector. The accounting and auditing professions have a role in achieving this goal but regulators or governments also must promote effective enforcement.

Slide 12 Importance of An International Approach  FEE supports global standards  Accounting IFRS  Auditing ISAs  SMEs – new IASB project  International Standards  Avoid duplication of work  Allow swift progress  Help Inward Investment

Slide 13 Proposed Regional Initiative  FEE is willing to explore how to help with this project, such as  Providing contact with our member bodies for - education programmes - development of regulations - development of professional structures  Providing briefing sessions in Brussels on international and EU developments

Slide 14 World Bank Conference on Proposed Regional Initiative to Strengthen Auditing & Accounting in South East Europe Brussels, 30 June 2004 David Devlin – FEE President (Fédération des Experts Comptables Européens - European Federation of Accountants)