International Trade in Services.pdf - DSpace at Khazar University

Accounting Services 277
Box 8.6: Reports on the Observance of Standards and Codes
Reports on the Observance of Standards and Codes (ROSC) is a joint International
Monetary Fund–World Bank initiative that helps member countries strengthen their
financial systems by improving compliance with internationally recognized standards
and codes. The initiative was developed in the wake of the financial crises of the late
1990s as part of a series of measures to strengthen the international financial architecture.
The global financial community considered that the implementation of internationally
recognized standards and codes would provide a framework to strengthen
domestic institutions, identify potential vulnerabilities, and improve transparency.
Ultimately, the ROSC aims to enhance the resilience of countries to shocks, support
risk assessments in these countries more effectively, and strengthen important pillars
of the market economic system.
The focus of the initiative is 12 key areas, as follows:
• Accounting, with recognized international standards and codes
• Auditing, with recognized international standards and codes
• Anti–money laundering and countering the financing of terrorism
• Banking supervision
• Corporate governance
• Data distribution
• Fiscal transparency
• Insolvency and creditor rights
• Insurance supervision
• Monetary and financial policy transparency
• Payment systems
• Securities regulation
Reports summarizing findings of the exercises in the 12 areas are prepared and published
at the request of the member countries. The World Bank ROSC accounting and
auditing Web page makes available the published ROSC accounting and auditing
reports and additional information (see the source below). The ROSC accounting and
auditing review evaluates a country’s accounting and auditing standards and practices,
using the IFRSs and international standards on auditing as benchmarks. The review also
analyzes the strengths and weaknesses of the institutional framework that underpins
the accounting and auditing practices in the country. The review uses a diagnostic template
developed by the World Bank to facilitate data collection, complemented by the
findings of in-country due-diligence exercises conducted by the World Bank ROSC
team. Following the completion of a ROSC accounting and auditing review, the country
stakeholders, assisted by World Bank staff, develop a country action plan that forms
the basis for accounting reform and development. The main objective of ROSC
accounting and auditing reviews is therefore capacity building to strengthen the institutional
underpinnings of corporate financial reporting in countries.
Source: http://www.worldbank.org/ifa/rosc_aa.html.
distinguishes the accounting profession from the legal profession, for instance,
in which most of the legal corpus largely remains specific to each country. The
more diffuse the international standards in the domestic accounting system
(for example, for all listed companies or for all listed and unlisted companies),