Are there national accounting standards in Georgia? What is the place of IFRS in the Georgian financial reporting system?
G.T.: There are no national standards for accounting and audit in Georgia and IFRS Standards as the only standard has been adopted. We have assigned the 1st, 2nd, 3rd and 4th categories to entities in Georgia based on size and in addition to that, we also defined some entities as a Public Interest Entities. Accordingly, different accounting, reporting and audit requirements for these different categories are set by the Law of Georgian on Accounting, Auditing and Reporting. The full IFRS is adopted and thus is mandatory for 1st category and public interest entities.
Is IFRS for SME popular in Georgia?
G.T.: The IFRS for SMEs is mandatory for 2nd and 3rd category entities. Statistics for already submitted reports by SMEs in 2019, show that higher number of entities (more than 90%) are in compliance with legislation requirements than in previous year and the quality of reports also has improved.
During the year 2019, up to 1000 people were trained within the frames of the program “IFRS for SMEs training”. The program was carried out with the support of international donors (the World Bank and EBRD), professional organizations, banking and academic sectors.
The training was held within the USAID’s G4G project, initiated by Service for Accounting, Reporting and Auditing Supervision (SARAS) under the Ministry of Finance of Georgia. Trainers, trained with the support of the World Bank, carried out the training using the Training Material developed under the license agreement with IFRS Foundation.
The program aimed to enhance the qualification of accountants, financiers of the small and medium-sized business sector and other interested parties. According to the feedback of participants, as well as the quality of financial statements, IFRS for SMEs training program can be considered as successful.
How do you assess the quality of the translation of IFRS texts into Georgian? Do official translations keep pace with changes in international standards?
G.T.: Georgia is one of the most advanced countries in terms of timeliness of translation of IFRS standards and ISA. SARAS is obliged by the Law on Accounting, Reporting and Auditing to translate standards and make them available to public within 6 months upon its release by the relevant bodies (IASB and IFAC). Quality of translation is a complex issue and SARAS tries to improve it permanently, including using such tool as recently released online dictionary https://www.saras.gov.ge/translate which involves crowdsourcing mechanism.
What professional certifications are preferred by Georgian accountants?
G.T.: The Law considers status of certified accountant which can be obtained through certification program of the professional accountants’ organization (PAO) recognized by SARAS. In Georgia it’s adopted ACCA program held by GFPAA. The Law also recognizes IFAC/OECD/EU PAOs certifications and ACCA is the most popular one. More statistics are available at GFPAA.
Georgia is constantly leading in world ratings of simplicity and freedom of doing business. What, in your opinion, is the role of the accounting profession in this?
G.T.: From my point of view, comprehensive economic reforms carried out in Georgia during recent years, including the reforms in accounting and reporting enabled Georgia’s high ranking in ease of doing business rating. Availability of the financial statements through Reportal.ge and transparency of certain information disclosed there has supported Georgia’s high rating too.
The activities of the National Reform Support Foundation (RSF) received the highest ratings from the European Union and the World Bank. What is the secret to the effectiveness of the Foundation?
G.T.: The National Reform Support Foundation for Accounting, Reporting and Auditing of Georgia was established at the beginning of 2019 and despite relatively short period of time managed to conduct several important meetings and events. The Foundation is still at formation stage regardless its impressive results for 2019 that was result of good cooperation with all stakeholders and support from donor organizations. We are trying to support the reform and profession development through open dialogue between all interested parties and providing appropriate platform for introducing higher standards and best international practices of quality control, governance and transparency.
How does the award of RSF for the best financial reporting affect the business reputation of Georgian enterprises?
G.T.: It was the first ever award in Georgia for the best financial reporting and It should be also noted that we managed to gather really high caliber international and local experts in jury. Based on significant interest from mass media and business sector, we can say for sure that the award has been regarded from businesses as one of the most prestigious awards since it serves also as one more additional proof of transparency, good governance and credibility for investors.