1. World Bank Engagement in Public Sector Accounting Reform
Poland Case Study –IPSAS GAP Analysis
Iwona Warzecha
Sector Leader Financial Management Gov GP FAR ECA
Baku April 2018

2. Background -Improving Fiscal Transparency
Fiscal shocks - G20 calls for a focus on the public sector balance sheet to assess public debt sustainability and the need for improving transparency and comparability in public sector reporting
EC directive 2011/85/EU on requirements for budgetary frameworks sets obligation to have in place reliable public accounting systems covering all sub-sectors of general government to generate accrual data for ESA 95 (currently ESA 2010) reporting. Those public accounting systems shall be subject to internal control and independent audits.
EC recommended development of EPSAS (European Public Sector Accounting Standards) based on IPSAS for adoption by member states EPSAS working group created in Sept 2015

3. Fiscal Transparency, Accountability and Risk
Analysis of the nature and scale of fiscal shocks during the crisis – unanticipated increase o public debt 26,4% of GDP ( )
Emergence of a business case for PFM improvement including financial and fiscal reporting
BUT substantial shortcomings in fiscal transparency (including both budget transparency + assets, liabilities, contingent liabilities, risks):
Gaps and inconsistencies in fiscal transparency standards
Lags in governments’ implementation of international accounting and statistical reporting standards
90 and 2001 This crisis highlighted weaknesses in both public and private financial reporting and the risks of not disclosing important financial information, particularly on the linkages between the public and the private sector. But these issues were not a one-off. We find similar evidence in the 2008 global financial crisis. This increase in the general government debt ratio between 2007 and 2010
for the 10 countries with the largest increases showed the average increase was a significant 26% of GDP, more than half of which results from factors related to transparency issues. Roughly a quarter was due to failures in fiscal reporting. This included unreported or misclassified expenditure, undisclosed arrears, the activities of state-owned enterprises, or investment through public-private partnerships. the importance of coverage and the disclosure of information on state-owned enterprises. Increase in debt was also was due to underestimated fiscal risks from macroeconomic shocks and the materialization of contingent liabilities, primarily the bailing out of financial institutions.

4. Fiscal Transparency, Accountability and Risk
Strengthening fiscal transparency standards and practices through:
Implementation of Standards - IPSAS, GFSM, ESA, SNA
Increased coverage – focus on General Government but Public Corporations important (accrual practice is better in public corporations)
A large part of the efforts to strengthen fiscal transparency involve new fiscal reporting and transparency standards the Fiscal Transparency Code and Manual. These efforts were supported by the development of IPSAS--
the International Public Sector Accounting Standards-- and also by new standards in the statistical area, including the UN's System of National Accounts 2008 or the European System of Accounts ESA 2010, and of course, the IMF's Statistical Reporting Guidelines described in the Government Finance Statistics Manual 2014.
The last decade has also seen the development of new tools to monitor compliance with the standards of fiscal reporting and transparency, particularly at multilateral and regional levels ROSC, PEFA
GFSM 2014, IPSAS, and COFOG have harmonized concepts including cash and accrual concepts. These standards and guidelines serve different purposes; however, they are complementary. It should be noted that a lot of progress has been achieved to harmonize statistical guidelines and accounting standards

5. A comparison of Polish Public Sector GAAP to IPSAS Key highlights - 2015
Polish PS GAAP is complex - set of laws, regulations and sector specific requirements including separate budgetary reporting (focusing on execution of budget on cash basis)
Poland’s PS GAAP includes accrual basis but there are many exclusions and accrual information is generally not used for decision making.
the Accounting Act (AA) serves both the corporate sector and approximately 71,000 public sector entities apply but approximately 68,000 entities are released from requirement of presentation of financial statements, consolidation and auditing.
Further specific accounting guidelines are provided for tax collection activities and public institutions.
The AA permits but does not oblige entities to refer to Polish National Accounting Standards (KSRs) for guidance on accounting issues not already provided for in the AA.
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

6. A comparison of Polish Public Sector GAAP to IPSAS Key highlights
The areas of Polish PS GAAP that are most consistent with IPSAS include:
Measurement of Assets. Overall Polish PS GAAP is broadly consistent with the IPSAS treatment of assets in IPSAS 12 (Inventories), IPSAS 16 (Investment Property), IPSAS 17 (Property, Plant and Equipment), IPSAS 31 (Intangible Assets) and IPSAS 26 (Impairment of Cash- Generating Assets).
Other. Polish PS GAAP is also broadly consistent with IPSAS in respect of: IPSAS 4 (Effects of changes in foreign exchange rates) except in respect of accounting for EU funds; IPSAS 5 (Borrowing costs) except in respect of the mandatory capitalization of borrowing costs incurred for property, plant and equipment including that under construction; IPSAS 9 (Revenue from exchange transactions); and IPSAS 11 (Construction contracts).
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

7. A comparison of Polish Public Sector GAAP to IPSAS Key highlights
The areas of Polish PS GAAP that are most divergent from IPSAS include:
Presentation of financial Statements. FS contain less financial information than required by IPSAS 1 (Presentation of Financial Statements) or IPSAS 2 (Cash flow statements) in terms of the components of the financial statements (a statement of financial position, statement of changes in net assets/equity, cash flow statement and a summary of accounting policies and other explanatory notes.
Recognition of Taxes and transfers. Financial statements prepared under Polish PS GAAP do not include revenues from taxes and customs collected by tax-collection bodies subordinate to the MOF as well as EU grants as is required by IPSAS 23 (Revenues from non-exchange transactions).
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

8. A comparison of Polish Public Sector GAAP to IPSAS Key highlights
The areas of Polish PS GAAP that are most divergent from IPSAS include:
Aggregation of financial information. Currently, Polish PS GAAP has very limited requirements with regard to the production of aggregated financial information. FS are prepared on entity basis.
Other. Polish PS GAAP also differs very significantly from IPSAS in respect of: IPSAS (financial instruments), IPSAS 13 (leases), IPSAS 25 (employee benefits), IPSAS 20 (related party disclosures) and IPSAS 32 (service concession arrangements). As result many liabilities and disclosures would be reflected under IPSAS.
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

9. A comparison of Polish Public Sector GAAP to IPSAS Main options for Poland
Simplification and standardization of Polish PS GAAP across all PFSEs. This will also require the design of a unified chart of accounts to accommodate also need to produce management information.
Development of aggregated financial information. to get a better understanding of its overall financial position and fiscal risks than the current consolidated cash-based budget execution reports. Phased process - consolidation to follow the existing budgetary process with financial statements (together with comprehensive disclosures) produced at (i) the central government and (ii) territorial subnational government.
Coverage and definition of PFSEs. The PFA appears to omit certain public sector entities such as Treasury and the Road Fund from the definition of PFSEs and as such they do not appear to be subject to Polish PS GAAP. In addition, certain public sector transactions such revenues of taxes and customs by entities subordinate to the MOF as well as EU grants appear to fall out of the scope of Polish PS GAAP. Polish PS GAAP should be reviewed and revised to include all appropriate entities and transactions.
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

10. Recommended strategy for adoption of an IPSAS framework in Poland
Partial adoption of IPSAS
Initially select those IPSAS requirements which are:
largely consistent with current Polish PFS GAAP;
with fundamental accounting issues related to recognition, measurement and presentation which are currently poorly covered by Polish PFS GAAP and at the same time are neither expected to be controversial particularly as regards EPSASs nor to be changed by the IPSASB in the near future;
essentially disclosure requirements that would not require undue additional effort and cost for compliance;
well-aligned with ESA 2010 (and/or GFSM 2014).
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

11. Recommended strategy for adoption of an IPSAS framework in Poland
preparation of unified chat of accounts in consistency with Budget System Reform initiative,
analysis of various organizational forms of Public Sector Finance Entities,
issuing new accounting legislation specifically for the public finance sector,
developing methodology and application guidelines for users.
Public sector accounting reform is an ambitious long term process which demands considerable time and resources. It is difficult to accurately predict or estimate the incremental costs of the reform.
Further work is required to develop an analysis of current public sector accounting practices and staffing and IT capacity constraints.
Bank’s professional advise on draft versions of new audit and accounting legislations transposing the requirements of recent update of EU acquis communitaire into local Polish environment
Swiss Federal Audit Oversight Authority in December 2012 for representatives of KNA (KNA - 3 people). According to the feedback obtained from the participants, the visit contributed substantially to the understanding of the role of POS, enhanced awareness of financial transparency and governance of the participants of the visit.
January 2013 a one-day conference on The Audit Committee: A key link in the financial reporting and audit process. The conference, which was hosted by the Warsaw Stock Exchange (WSE), brought together around 140 participants, including members of audit committees of WSE-listed firms, members of supervisory boards, statutory auditors and internal auditors, to share insights from Polish and international experience on how audit committees can improve their effectiveness.
The conference “The Effective Audit Committee: Strengthening Controls, Managing Risk, and Improving Financial Reporting" was organized on January 16, 2015 in Warsaw with the aim to help audit committee members perform their functions more effectively, and to improve communication and cooperation between audit committees and auditors, regulators, and stakeholders. More than 190 participants attended, including members of audit committees; senior executives who work with audit committees; auditors, lawyers and other professionals who advise audit committees; members and staff of financial reporting regulatory and supervisory bodies; investors; academics; journalists; and others.
Regional POS/QAS workshops: in Vienna in December 2013; in Paris in Sept-Oct 2014; in Berlin in June 2015 and in Warsaw in September As part of this program, representatives of ministries of finance, audit public oversight authorities and auditor associations from FRTAP countries including Poland, the Czech Republic, Slovenia and Latvia, and also with guest participants from Turkey, met at the CFRR in Vienna on December 9-10, 2013 for an "Enhancing audit quality in FRTAP countries" workshop. This workshop followed a series of study visits undertaken by the group to Switzerland, the Netherlands and Norway. There were five participants from Poland - KKN 2, MOF working for KNA 3.
the France’s audit regulator, H3C, hosted two days of technical study sessions (Sept 29 to October 1) for representatives from the audit oversight bodies of Poland, Czech Republic, Slovenia, Romania, and Turkey, facilitated and moderated by the CFRR. The technical sessions looked in detail at the structure and operation of France’s system of audit oversight to help inform the further reform and development of oversight systems in participant’s countries, particularly in response to recent changes in governing EU law. Effective risk targeting was essential in selecting which firms, audits, quality-control features, and activities to focus on in the inspections process, and there was much discussion of the protocols and techniques H3C has developed to identify, assess, and target risk.While in Paris the CFRR team also met with the French Institute of Statutory Auditors (CNCC) to learn more about the CNCC’s role, methodology, and software in conducting quality-control inspections as well as its division of labor with H3C, to help inform the CFRR’s technical advice to client countries putting in place similar structuring of responsibilities between the independent oversight body and the professional body. We had three representatives from the MoF and the project covered the costs of the flights and accomodation. CFRR had two representatives and we covered flights, accomodation and per diems. In addition to the above study visit, the
Workshop "Implementing the new EU audit framework", Berlin, 9-10 June 2015 for the public oversight bodies (KNA) and Ministry of Finance. The objective of the workshop was to continue supporting Poland in implementation of the acquis as it relates to auditing and audit oversight. Specifically, the workshop provided participants with an opportunity to discuss the additional obligations and funding requirements particularly for the competent authority resulting from the new EU audit framework comprising the new Audit Directive and Audit Regulation including: clarifying and understanding the implications of the new audit framework; comparing and sharing implementation strategies and funding options with their peers for the new regulatory framework; and planning for further regional and national activities and assistance both with and without the FRTAP to enable successful implementation of the new audit framework. The workshop took place at the offices of the German POB and participants included, for the purposes of peer learning and knowledge exchange, guests from the POBs and ministries of finance of Hungary, Netherlands, Slovakia, Croatia, Slovenia and the United Kingdom.
One day seminar on 11 May 2015 was delivered in Warsaw regarding legal advice on the scope and nature of the Polish Audit Oversight powers to intervene in disciplinary proceedings conducted by Poland’s National Chamber of Statutory Auditors (KibR). The seminar conducted by selected consultant for 15 members of KNA and employees of KNA office. The main topics of the seminar would include: role of the Audit Oversight Commission (KNA) in disciplinary proceedings against statutory auditors; powers granted by the law; participation in the capacity of a party; rights and obligations of the KNA as a participant of disciplinary proceedings; disciplinary proceedings in the Act on Statutory Auditors, taking account of the positions and power of the KNA. The cost covered the fees of presenters and accommodation and flight of consultants.
workshop for public oversight and quality assurance institutions: “Implementing the New EU Audit Framework”, which was held on September 2016 in Warsaw. Representation of participants from Poland –host country – included 16 staff and members of Polish Audit Oversight Body – Komisja Nadzoru Audytowego, KNA

12. Recent developments Awaiting for development of EPSAS which is lagging
June 2016 – MoF announced vision for the “Reform of Budget System” - in progress
introduction of mid-term budgetary framework and integration of multi-annual and annual planning processes
introduction of unified budget classification (including also chart of accounts)
Enhancement of budgetary reporting and financial reporting,
Implementation of spending reviews - supporting effectiveness of public funds spending and finding fiscal space for priority programs
February 2017 –Budget System Reform included in Government Strategy for Responsible Development 2020 – 2030 perspective – key actions:
Changes in regulatory framework of public finance law
Preparation of consolidated financial statement of the state
Effective monitoring of development expenditures and policies

13. Iwona Warzecha – Senior Financial Management Specialist, Sector Leader, The World Bank Office in Warsaw
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Thank you.