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Introduction of reliable financial reporting in Serbia

 

On the path to EU accession, Serbia needed to improve its investment climate and transparency of public finance. 

 

PwC trained more than 2,000 professionals to effectively manage their finances and public entities to plan and report their finances in a transparent and cost-effective way. 

 

 

Client:

Serbian Ministry of Finance and the World bank Group 

 

Our role:

Contract implementor 

 

Country:

Serbia

 

Setting the scene

The Government of the Republic of Serbia wanted to gain the trust of potential foreign investors and provide their citizens with more transparent public finance. The Ministry of Finance defined a very ambitious reform agenda for overall Public Finance Management (PFM) reform. 

But the reform process lacked ways to improve credible financial reporting in both the private and public sectors. Public and private enterprises and institutions had minimal knowledge and understanding of International Financial Reporting Standards (IFRS), International Financial Reporting Standards for SMEs (IFRS for SMEs) and International Auditing Standards (ISAs). Since the application of accounting standards is crucial for quality financial statements and internal control, the Ministry of Finance needed to address the gaps. 

Serbian stakeholders also lacked a sustainable platform to improve financial reporting and audit skills. So there was no ownership, exchange of knowledge, or development of IFRS and ISA expertise. Organisations had no internal capacity to develop educational and training schemes on these topics created a skills gap in Serbia. 

 

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How we helped

To address the skills gap, the Ministry of Finance created a corporate financial reporting training programme called “You can count on our support.” The training targeted finance departments, accountants, auditors and financial consultants from both local and international companies, and public and private sectors. It was conducted in four regional centres in Serbia: Belgrade, Novi Sad, Kragujevac and Nis.

PwC supported the Republic of Serbia in developing and delivering the training throughout 2018 and 2019. The Project was administered by the World Bank, financed by SECO, and implemented by PwC Serbia, Singidunum University Belgrade, PwC Hungary, and AARC Ltd.

PwC Academy conducted a training needs analysis to provide concrete evidence on what the training should look like. Inputs were collected from various sources, including information from the Ministry of Finance of Republic of Serbia and individual interviews and questionnaires with the target audience. To make the project sustainable, PwC developed additional modules for future trainers. The goal of this effort was to increase the presentation and educational skills of a certain number of people so the knowledge continues to be transferred within their organisations and local communities. 

Based on the results of the training needs analysis, several forms and streams of training were developed:

  • E-learnings on IFRS and ISA basics including recorded webex sessions

  • IFRS course, duration of 6 days

  • IFRS Train the Trainer course, duration of 7 days

  • ISA course, duration of 6 days

  • ISA Train the Trainer course,duration of 7 days

  • Short workshops and seminars on specific IFRS and ISA standards

To recruit participants, PwC supported the Ministry with a wider awareness campaign. Through live presentations, launch events in selected cities and targeted online e-mailing and social media, the campaign reached a wide but specific audience. Based on the gathered data, the campaign reached 205,000 individuals in Serbia.

 

We are proud to see that the consortium appointed to conduct these mass trainings has leveraged technology and made a real impact among a broad range of audiences, as attested by the level of satisfaction indicated by participants.

Alfred Borgonovo, Program Manager, Centre for Financial Reporting Reform, World Bank

 

Impact and potential

As a result of the awareness campaign and training programme, 2,108 finance professionals are better equipped to implement a unified approach to IFRS and ISA standards. These new skills in finance and accounting will provide more accurate, reliable and transparent financial reports for both the private and public sector. 

The number of participants exceeded the target of 1,790. The participants represented 417 different organisations, including 31% from the Serbian State Audit Institution, 5% from the Tax Administration, and 4% from the National Banks of Serbia. Representing the public sector, there were 844 participants (40%).

Knowledge of IFRS, ISA and associated reporting standards are essential for high quality financial statements, and higher quality of audit professionals. Looking at the bigger picture, good quality financial reporting enables small and medium enterprises to expand their businesses, and the economy to be competitive on the European Union market. In order to improve the business and investment climate in Serbia, it is important to provide reliable financial information as well as to have well educated accounting and auditing professionals .

Our end-of-training survey showed high levels of participation satisfaction. Feedback from IFRS, ISA, and lectures and workshops indicated an overall improvement in the knowledge and skills gained by participants.

The Ministry of Finance has taken great steps to fill an educational void. This programme also creates a strong network between the participants, who can exchange experiences and opinions to continue to foster a financial reporting community. 

 

Biljana Bogovac

Biljana Bogovac

Partner, PwC Serbia

Marijana Trifunovic-Stefanovic

Marijana Trifunovic-Stefanovic

Director, Public Sector, PwC Serbia

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