1. 1 Serbian Association of Accountants and Auditors (SAAA) IFRS and ISA TRANSLATION

2. 2 ISA and IFRS in Serbia Compulsory ISA application for auditing financial reports since 1996. Compulsory ISA application for auditing financial reports since 1996. Compulsory IFRS application in financial reporting since December 31 st, 2003 for banks, financial organizations and insurance companies, from December 31 st, 2004 for all legal entities. Compulsory IFRS application in financial reporting since December 31 st, 2003 for banks, financial organizations and insurance companies, from December 31 st, 2004 for all legal entities.

3. 3 Prerequisites for ISA and IFRS Implementation Transparent and applicable legal framework Transparent and applicable legal framework Existence of high-quality translation of ISA and IFRS Existence of high-quality translation of ISA and IFRS ISA and IFRS implementation control ISA and IFRS implementation control Cooperation of all interested parties Cooperation of all interested parties

4. 4 ISA Translation Process Narrower circle of users in comparison with IFRS Narrower circle of users in comparison with IFRS Since ISA are being used for longer period, their application and updating processes are largely facilitated Since ISA are being used for longer period, their application and updating processes are largely facilitated

5. 5 SAAA Experience Section of auditors of SAAA is responsible for establishing formal processes and procedure trough ISA Commission Section of auditors of SAAA is responsible for establishing formal processes and procedure trough ISA Commission ISA Commission consist of 12 members ISA Commission consist of 12 members 7 members – certified public accountants 7 members – certified public accountants 2 members – SAAA employees 2 members – SAAA employees 2 members – Chamber of Acc. & Auditing Firms 2 members – Chamber of Acc. & Auditing Firms 1 member – Informational technologies sector 1 member – Informational technologies sector

6. 6 ISA Translation ISA Commission ISA publishing editor coordinator translators

7. 7 ISA Commission consists of persons with proficiency in English as well as with sound knowledge of professional terms, who are engaged in public practice. ISA Commission consists of persons with proficiency in English as well as with sound knowledge of professional terms, who are engaged in public practice. Commission members review translation and forward their comments to the coordinator. They specially take account on understandability of the translation for users who do not have proficiency in English. Commission members review translation and forward their comments to the coordinator. They specially take account on understandability of the translation for users who do not have proficiency in English. If after review there is no more unresolved issues, translation draft is considered final and ready for adoption. If after review there is no more unresolved issues, translation draft is considered final and ready for adoption.

8. 8 Coordinator Coordinator submits report to the ISA Commission on Draft proposals, as well as on amendments and new standards in ISA editions for current year. submits report to the ISA Commission on Draft proposals, as well as on amendments and new standards in ISA editions for current year. organizes translation process, communication among process participants and other necessary activities. organizes translation process, communication among process participants and other necessary activities. ISA Commission adopts final version of the translation. ISA Commission adopts final version of the translation.

9. 9 Translators are persons, authorized translators of English language who have necessary experience in translating professional texts. Translators are persons, authorized translators of English language who have necessary experience in translating professional texts. It is recommendable to engage regular group of translators, as for persons who are familiar with accounting and audit terminology. It is recommendable to engage regular group of translators, as for persons who are familiar with accounting and audit terminology. All translators receive the list of translated key terms, approved by the ISA Commission. All translators receive the list of translated key terms, approved by the ISA Commission.

10. 10 Several factors, out of which the most important include: IFAC support IFAC support Government support Government support Recommendations

11. 11 Word documents (track changes option) are of immeasurable assistance in updating Standards – and it is recommended for them to be used for drafts proposals of the new or amended standards. Word documents (track changes option) are of immeasurable assistance in updating Standards – and it is recommended for them to be used for drafts proposals of the new or amended standards. Establishing department which can be contacted for the purpose of technical explanation of certain notions. Establishing department which can be contacted for the purpose of technical explanation of certain notions. Technical Support of IFAC

12. 12 Cooperation with national professional organization Cooperation with national professional organization Prevention of conflict of interests Prevention of conflict of interests Establishment of clear and applicable legal framework trough transparent process Establishment of clear and applicable legal framework trough transparent process Compulsory audit scope Compulsory audit scope Quality control system Quality control system Code of ethics Code of ethics Government Support

13. 13 IFRS Translation Process Official IFRS text is published in English Official IFRS text is published in English Translating IFRS into the national language enables wider accessibility of Standards, as well as the possibility of discussions and exchange of concepts on IFRS, among multitude of users Translating IFRS into the national language enables wider accessibility of Standards, as well as the possibility of discussions and exchange of concepts on IFRS, among multitude of users

14. 14 Prerequisites for high-quality translation of IFRS Sole and unified official translation text Sole and unified official translation text High-quality translation High-quality translation Feedback information Feedback information

15. 15 Sole official translation text The basic objective is high-quality translation The basic objective is high-quality translation The primary translation should/must be constantly improved The primary translation should/must be constantly improved In case of more then one translation users can be confused In case of more then one translation users can be confused

16. 16 IASCF predicts “approved” or “official” translation text IASCF predicts “approved” or “official” translation text Translating IFRS by the government – useful or wasteful? Translating IFRS by the government – useful or wasteful? What are the “numbered”/ “bare” standards? What are the “numbered”/ “bare” standards?

17. 17 SAAA Experience Coexistence of several translations proved to be extremely onerous for correct understanding and application of standards. Coexistence of several translations proved to be extremely onerous for correct understanding and application of standards. Translation of “numbered”/ “bare” standards are not enough for correct understanding and application of standards. Translation of “numbered”/ “bare” standards are not enough for correct understanding and application of standards.

18. 18 Translation Process Establishing formal processes and procedure Establishing formal processes and procedure IASCF guidance regarding translation process IASCF guidance regarding translation process

19. 19 SAAA Practice SAAA Accounting Board is a supreme body for enacting and adopting professional regulation. SAAA Accounting Board is a supreme body for enacting and adopting professional regulation. Accounting Board consists of 25 members: Accounting Board consists of 25 members: 10 members – University professors 10 members – University professors 4 members – Accounting firms 4 members – Accounting firms 3 members – Banking sector 3 members – Banking sector 3 members – SAAA 3 members – SAAA 1 member – National Bank 1 member – National Bank 1 member – Securities Commission 1 member – Securities Commission 1 member – Tax Sector 1 member – Tax Sector 1 member – Insurance Sector 1 member – Insurance Sector 1 member – Informational Technologies Sector 1 member – Informational Technologies Sector

20. 20 Accounting Board has established standing IFRS Committee which is responsible for translating IFRS. Accounting Board has established standing IFRS Committee which is responsible for translating IFRS. IFRS Committee has adopted the translation process recommended by the IASCF IFRS Committee has adopted the translation process recommended by the IASCF

21. 21 Translation Process IFRS Committee Editor for IFRS publishing Coordinator Review commission Translators

22. 22 IFRS Committee approves appointment of coordinator, members of Review Commission and translators IFRS Committee approves appointment of coordinator, members of Review Commission and translators IFRS Committee adopts the list of translated key terms. IFRS Committee adopts the list of translated key terms. If needed, IFRS Committee resolves other issues that are not adjusted within translation process If needed, IFRS Committee resolves other issues that are not adjusted within translation process IFRS Committee approves final version of translation. IFRS Committee approves final version of translation.

23. 23 Coordinator: Coordinator: organizes translation process, Review Commission work, communication between participants in the process and other necessary activities. organizes translation process, Review Commission work, communication between participants in the process and other necessary activities. determines the list of questions and problems that are to be resolved during regular Commission meetings. determines the list of questions and problems that are to be resolved during regular Commission meetings. submits IFRS Committee final version of translation for adoption. submits IFRS Committee final version of translation for adoption.

24. 24 Review Commission consists of persons with proficiency in English as well as with sound knowledge of technical terms, who are engaged with accountancy practice in the domain of industry, banking and insurance. Review Commission consists of persons with proficiency in English as well as with sound knowledge of technical terms, who are engaged with accountancy practice in the domain of industry, banking and insurance. Commission members perform review of translations and forward their comments to the coordinator. Issues that can't be resolved in such a manner, are discussed at the regular Commission meetings or submitted to the IFRS Committee. Commission members perform review of translations and forward their comments to the coordinator. Issues that can't be resolved in such a manner, are discussed at the regular Commission meetings or submitted to the IFRS Committee. Prior to finalization, translations are submitted for final review by the Commission members who do not speak English. If there are no unresolved issues after this review, translation draft is considered final and submitted to the Committee for adoption. In such a way quality of translations is controlled on behalf of users who don't speak English. Prior to finalization, translations are submitted for final review by the Commission members who do not speak English. If there are no unresolved issues after this review, translation draft is considered final and submitted to the Committee for adoption. In such a way quality of translations is controlled on behalf of users who don't speak English.

25. 25 Translators are persons, authorized translators of English language and have necessary experience in translating professional texts. Translators are persons, authorized translators of English language and have necessary experience in translating professional texts. It is recommendable to engage regular group of translators, as for persons who are familiar with accounting terminology. It is recommendable to engage regular group of translators, as for persons who are familiar with accounting terminology. All translators receive the list of translated key terms, approved by the IFRS Commission. All translators receive the list of translated key terms, approved by the IFRS Commission.

26. 26 SAAA Experience It is useful to include in the Review Commission persons who are professionals and experienced in the accounting profession but do not necessarily speak English. It is useful to include in the Review Commission persons who are professionals and experienced in the accounting profession but do not necessarily speak English. It is not recommendable to allow direct contact between Review Commission members and translators. It is not recommendable to allow direct contact between Review Commission members and translators. All changes in the list of translated key terms should be highlighted and timely circulated to all the participants in the translation. All changes in the list of translated key terms should be highlighted and timely circulated to all the participants in the translation.

27. 27 After the edition is published, the coordinator has to collect feedback information on the translation quality. After the edition is published, the coordinator has to collect feedback information on the translation quality. In preparing translation for a new edition, the coordinator submits report on received feedback information and corrections proposals. In preparing translation for a new edition, the coordinator submits report on received feedback information and corrections proposals.

28. 28 Recommendations Several factors, out of which the most important include: IASB/IASCF support IASB/IASCF support Government support Government support

29. 29 IASB and IASCF Support Standards Standards Technical support Technical support Clear attitude on official translation Clear attitude on official translation Clear attitude on cost reimbursement Clear attitude on cost reimbursement

30. 30 Standards Using simpler, shorter and clearer sentences in the Standards Using simpler, shorter and clearer sentences in the Standards Using distinctive terms, that can not be misunderstood Using distinctive terms, that can not be misunderstood In case of using terms that are new or specific, provision of adequate explanation in the form of definitions or examples In case of using terms that are new or specific, provision of adequate explanation in the form of definitions or examples More examples illustrating standards application More examples illustrating standards application

31. 31 Word documents (track changes) are of immeasurable assistance in IFRS updating – and it is recommended for them to be used for drafts proposals of the new or amended standards. Word documents (track changes) are of immeasurable assistance in IFRS updating – and it is recommended for them to be used for drafts proposals of the new or amended standards. Establishing department which can be contacted for the purpose of technical explanation of certain notions. Establishing department which can be contacted for the purpose of technical explanation of certain notions. Technical Support

32. 32 Sole official translation Sole official translation If there is an official translation, avoiding additional publishing of “numbered” / “bared” standards If there is an official translation, avoiding additional publishing of “numbered” / “bared” standards Copyright Copyright Official Translation

33. 33 Translating process causes large costs, that can hardly be reimbursed in a short term. Translating process causes large costs, that can hardly be reimbursed in a short term. SAAA experience indicates that additional publishing of “numbered” / “bared” standards additionally jeopardizes economic sustainability of the translation process. SAAA experience indicates that additional publishing of “numbered” / “bared” standards additionally jeopardizes economic sustainability of the translation process. Costs and Compensation

34. 34 A professional organization publishes IFRS translation – causes large costs A professional organization publishes IFRS translation – causes large costs The government publishes translation without any costs The government publishes translation without any costs Commercial enterprises take over translations and publish them at no cost Commercial enterprises take over translations and publish them at no cost Economic sustainability??? Economic sustainability???

35. 35 IASCF states: “If an IASCF approved translation in the national language exist, the Foundation waives its copyright on the translation within the country and receives reimbursement for the translation costs.” IASCF states: “If an IASCF approved translation in the national language exist, the Foundation waives its copyright on the translation within the country and receives reimbursement for the translation costs.” Is the same principle applied in case when IASCF has not directly translated Standards? Is the same principle applied in case when IASCF has not directly translated Standards?

36. 36 Government Support Cooperation with national professional organization Cooperation with national professional organization Prevention of conflicts of interest Prevention of conflicts of interest Transparent establishment of clear and applicable legal framework regarding IFRS implementation Transparent establishment of clear and applicable legal framework regarding IFRS implementation