1. Present by: L.Dondog - CPA, Ph.D., Professor. General Director, Department of Accounting Policy and Methodology of Ministry of Finance and Economy, President of Mongolian Institute of Certified Public Accountants INTERNATIONAL CONSORTIUM ON GOVERNMENT FINANCIAL MANAGEMENT INTERNATIONAL ACCOUNTING STANDARDS IMPLEMENTATION IN MONGOLIA

2. Mongolia Location: Between Russia and China Area: 1.5 mln sq.km (6 th in Asia, 18 th in the World) Population: 2.4 million (with low density of 1.5 persons for sq.km) 2.

3. Mongolia Capital City: Ulaanbaatar Language: Mongolian Religion: More than 90% Tibetan Buddhist 3.

4. Year 1206 Established Great Empire of Chinggis Khaan Mongolia 4.

5. Year 1691 Manchu’s colonial oppression Mongolia 5.

6. Year 1911 The country’s independence under Bogda Khaan Mongolia 6.

7. Year 1921 Mongolia Established People’s Republic of Mongolia 7.

8. Year 1990 The country rejected the centrally planned economy Mongolia 8.

9. L.Dondog - CPA, Ph.D., Professor. Mongolia 1.ADOPTION OF IAS 2.ADOPTION OF IPSAS 3.CONCLUSION AND COMMENTS Adoption of Accounting Standards in Mongolia 9.

10. L.Dondog - CPA, Ph.D., Professor. Mongolia 1. Adoption of IAS 10.

11. L.Dondog - CPA, Ph.D., Professor. Mongolia The history of double-entry accounting system Single entryDouble entry Russian-model of accounting Mid of the 90s Adoption of IAS 1927 year 11.

12. L.Dondog - CPA, Ph.D., Professor.Mongolia IASIAS Certified Public AccountantCertified Public Accountant Audit FirmsAudit Firms Professional Accounting CouncilProfessional Accounting Council Year 1993 “Accounting Law” Adoption of IAS 12.

13. L.Dondog - CPA, Ph.D., Professor. Mongolia All types of instructions and regulations pursued in the centrally planned economy were repealedAll types of instructions and regulations pursued in the centrally planned economy were repealed A lack of knowledge of national staff on IAS resulted in inability to develop new instructions, forms and regulations to be followedA lack of knowledge of national staff on IAS resulted in inability to develop new instructions, forms and regulations to be followed Training at universities and colleges were “in the wait listed”Training at universities and colleges were “in the wait listed” The accountants in the field did not know what to doThe accountants in the field did not know what to do Deep Crisis in Accounting Field Adoption of IAS 13.

14. L.Dondog - CPA, Ph.D., Professor. Mongolia Assistance from International Financial Organizations Adoption of IAS Year 1993 World Bank Project on training Year 1994 Asian Development Bank Training IAS was implemented in three big national companies (from 1994 through 1995) Started Accountants’ training for Certification (from 1994 through 1995) 14.

15. L.Dondog - CPA, Ph.D., Professor. Mongolia Faculty members and accounting professionals possessed knowledge on IASFaculty members and accounting professionals possessed knowledge on IAS Training at universities and colleges continuedTraining at universities and colleges continued Published manuals and textbooks based on IASPublished manuals and textbooks based on IAS Training on preparation for CPA ExaminationTraining on preparation for CPA Examination Tasks Achieved in 1993 and 1994 Adoption of IAS 15.

16. L.Dondog - CPA, Ph.D., Professor. Mongolia Developed methodology on changing accounting system in line with IASDeveloped methodology on changing accounting system in line with IAS Reform to renew curriculum and syllabus of universitiesReform to renew curriculum and syllabus of universities First CPAs at the national level were granted CPA titleFirst CPAs at the national level were granted CPA title CPAs were licensed for public practiceCPAs were licensed for public practice The Year of 1995 Adoption of IAS 16.

17. L.Dondog - CPA, Ph.D., Professor. Mongolia Established Mongolian Institute of CPAsEstablished Mongolian Institute of CPAs The reform to renew curriculum and syllabus was successfully implementedThe reform to renew curriculum and syllabus was successfully implemented The Year of 1996 Adoption of IAS 17.

18. L.Dondog - CPA, Ph.D., Professor. Mongolia 18 candidates were granted CPA title who was evaluated by the team of lecturers from USA and the Philippines18 candidates were granted CPA title who was evaluated by the team of lecturers from USA and the Philippines The Law on Auditing was approvedThe Law on Auditing was approved IAS (1995) was translatedIAS (1995) was translated ISA (1996) was translatedISA (1996) was translated The Year of 1997 Adoption of IAS 18.

19. L.Dondog - CPA, Ph.D., Professor. Mongolia universitiesuniversities professional bodiesprofessional bodies Most of the accountants has trained on IAS from 1993 through 2001 Adoption of IAS 19.

20. L.Dondog - CPA, Ph.D., Professor. Mongolia The rate of IAS adoption is 27.1%The rate of IAS adoption is 27.1% About 40% of enterprises do not prepare financial statementsAbout 40% of enterprises do not prepare financial statements Nationwide Accounting Review: Adoption of IAS 20.

21. L.Dondog - CPA, Ph.D., Professor. Mongolia Amendment to Accounting LawAmendment to Accounting Law The Government Program on Development of Accounting Framework from 2002 to 2004The Government Program on Development of Accounting Framework from 2002 to 2004 2002 – The Year identified as developing accounting practices2002 – The Year identified as developing accounting practices Government: Adoption of IAS 21.

22. L.Dondog - CPA, Ph.D., Professor. Mongolia Attracted attention all levels of managementAttracted attention all levels of management Improvement of accountants’ enthusiasmImprovement of accountants’ enthusiasm Acceleration in the speed of implementation of the resolutions issued by the Government and professional organizationsAcceleration in the speed of implementation of the resolutions issued by the Government and professional organizations Increased aid and assistance from international organizationsIncreased aid and assistance from international organizations Importance of the Year for Developing Accountancy Adoption of IAS 22.

23. L.Dondog - CPA, Ph.D., Professor. Mongolia 70% of all business enterprises adopted IAS Among them: - State owned enterprises100% - Shareholding companies100% As of the end of 2003 Adoption of IAS 23.

24. L.Dondog - CPA, Ph.D., Professor. Mongolia 2. Adoption of IPSAS 24.

25. L.Dondog - CPA, Ph.D., Professor. Mongolia World Bank Technical Assistance (1999) Asian Development Bank Asian Development Bank “Public Sector Reform” project Adoption of IPSAS 25.

26. L.Dondog - CPA, Ph.D., Professor. Mongolia Accrual Basis Budget Entities – output based budgeting State Audit Public Sector Finance Act (2002) Adoption of IPSAS 26.

27. L.Dondog - CPA, Ph.D., Professor. Mongolia Methodology on Application of IPSAS in Budget Entities (2002)Methodology on Application of IPSAS in Budget Entities (2002) Training – 90% of the accountantsTraining – 90% of the accountants RecommendationsRecommendations Adoption of IPSAS 27.

28. L.Dondog - CPA, Ph.D., Professor. Mongolia Application of IPSAS started from January 1, 2003Application of IPSAS started from January 1, 2003 Budget entities have encountered difficulties in preparation of Financial Statements initially in the 1 st quarter of 2003Budget entities have encountered difficulties in preparation of Financial Statements initially in the 1 st quarter of 2003 Most of the budget entities issued Financial Statements in 2 nd quarter of 2003Most of the budget entities issued Financial Statements in 2 nd quarter of 2003 The process had become smooth from 3 rd quarter of 2003The process had become smooth from 3 rd quarter of 2003 Adoption of IPSAS 28.

29. L.Dondog - CPA, Ph.D., Professor. Mongolia Central Treasury – Applied modified accrual basis of accounting from 2003 Not prepared Consolidated Financial Statements of the Government in 2003 Adoption of IPSAS 29.

30. L.Dondog - CPA, Ph.D., Professor. Mongolia State property count and revaluationState property count and revaluation from 2003Government Financial Management and Information System (GFMIS) from 2003 Free Balance – softwareFree Balance – software Adoption of IPSAS 30.

31. L.Dondog - CPA, Ph.D., Professor. Mongolia Government Financial Management and Information System (GFMIS) FreeBalance Government of Mongolia 31.

32. Central Treasury RTO 1.MOFE, Ulaanbaatar city Treasury Office; 2.All 21 Aimags RTO’s; 34.

33. L.Dondog - CPA, Ph.D., Professor. Mongolia Justified the applicability of IFRS and IPSAS in the practiceJustified the applicability of IFRS and IPSAS in the practice Transition process should commence at the same time throughout the country covering all sectorsTransition process should commence at the same time throughout the country covering all sectors Specify the accounting yearSpecify the accounting year Conclusion Conclusion 35.

34. L.Dondog - CPA, Ph.D., Professor. Mongolia Publish the standard in English, Russian, German, Spanish and ChinesePublish the standard in English, Russian, German, Spanish and Chinese Simplify writing style of the standardSimplify writing style of the standard Input of regional international associations to the standardsInput of regional international associations to the standards Comments Comments 36.

35. THANK YOU FOR YOUR ATTENTION