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Serbian Association of Serbian Association of Accountants and Auditors Accountants and Auditors

(SAAA)(SAAA)

IFRS and ISA

TRANSLATION

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ISAISA andand IFRSIFRS in Serbiain Serbia

Compulsory ISACompulsory ISA applicationapplication for auditing for auditing financial reports sincefinancial reports since 19961996..

CompulsoryCompulsory IFRSIFRS application in financial application in financial reporting since December reporting since December 3131st,st, 2003 2003 for banksfor banks, , financial organizationsfinancial organizations and insurance and insurance companies, from Decembercompanies, from December 31 31stst, , 2004 2004 for all for all legal entities.legal entities.

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Prerequisites forPrerequisites for ISAISA andand IFRS IFRS ImplementationImplementation

Transparent and applicable Transparent and applicable legal frameworklegal framework Existence of Existence of high-quality translation of ISAhigh-quality translation of ISA

andand IFRSIFRS ISAISA andand IFRS implementation controlIFRS implementation control Cooperation of all interested partiesCooperation of all interested parties

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ISA Translation ProcessISA Translation Process

Narrower circle of users in comparison withNarrower circle of users in comparison with IFRSIFRS

Since ISA are being used for longer period, Since ISA are being used for longer period, their application and updating processes are their application and updating processes are largely facilitatedlargely facilitated

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SAAA ExperienceSAAA Experience

Section of auditors of SAAA is Section of auditors of SAAA is responsible for establishing formal responsible for establishing formal processes and procedure trough ISA processes and procedure trough ISA CommissionCommission

ISAISA Commission consist ofCommission consist of 12 12 membersmembers 7 7 membersmembers – – certified public accountantscertified public accountants 2 2 membersmembers – – SAAA employeesSAAA employees 2 2 membersmembers – – Chamber of Acc. & Auditing FirmsChamber of Acc. & Auditing Firms 1 1 membermember – – Informational technologies sectorInformational technologies sector

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ISA TranslationISA Translation

ISA CommissionISA Commission

ISA publishing editorISA publishing editor

coordinatorcoordinator

translatorstranslators

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ISA Commission consists of persons with proficiency ISA Commission consists of persons with proficiency in English as well as with sound knowledge of in English as well as with sound knowledge of professional terms, who are engaged in public professional terms, who are engaged in public practice.practice.

Commission members review translation and forward Commission members review translation and forward their comments to the coordinator. They specially their comments to the coordinator. They specially take account on understandability of take account on understandability of the translation the translation for users who do not have proficiency in English.for users who do not have proficiency in English.

If after review there is no more unresolved issues, If after review there is no more unresolved issues, translation draft is considered final and ready for translation draft is considered final and ready for adoption.adoption.

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Coordinator Coordinator submits report to the ISA Commissionsubmits report to the ISA Commission on Draft on Draft

proposals, as well as on amendments and new proposals, as well as on amendments and new standards in ISA editions for current year.standards in ISA editions for current year.

organizes translation process, communication organizes translation process, communication among process participantsamong process participants and other necessary and other necessary activitiesactivities..

ISAISA Commission adopts final version of the Commission adopts final version of the translationtranslation..

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Translators are persons, authorized translators of Translators are persons, authorized translators of English language who have necessary experience in English language who have necessary experience in translating professional texts.translating professional texts.

It is recommendable to engage regular group of It is recommendable to engage regular group of translators, as for persons who are familiar with translators, as for persons who are familiar with accounting and audit terminologyaccounting and audit terminology..

All translators receive the list of translatedAll translators receive the list of translated key terms, key terms, approved by the ISA Commission.approved by the ISA Commission.

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Several factors, out of which the most Several factors, out of which the most important include:important include:

IFAC supportIFAC support Government supportGovernment support

RecommendationsRecommendations

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Word documents (track changes option) Word documents (track changes option) are of immeasurable assistance in are of immeasurable assistance in updating Standards – and it is updating Standards – and it is recommended for them to be used for recommended for them to be used for drafts proposals of the new or amended drafts proposals of the new or amended standards. standards.

Establishing department which can be Establishing department which can be contacted for the purpose of technical contacted for the purpose of technical explanation of certain notions.explanation of certain notions.

Technical Support ofTechnical Support of IFACIFAC

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Cooperation with national professional Cooperation with national professional organizationorganization

Prevention of conflict of interestsPrevention of conflict of interests Establishment of clear and applicable legal Establishment of clear and applicable legal

framework trough transparent processframework trough transparent process Compulsory audit scopeCompulsory audit scope Quality control systemQuality control system Code of ethicsCode of ethics

Government SupportGovernment Support

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IFRSIFRS Translation Process Translation Process

OfficialOfficial IFRSIFRS text is published in English text is published in English

TranslatingTranslating IFRS IFRS into the national language into the national language enables wider accessibility of Standards, as enables wider accessibility of Standards, as well as the possibility of discussions and well as the possibility of discussions and exchange of concepts on IFRS, among exchange of concepts on IFRS, among multitude of usersmultitude of users

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Prerequisites for high-quality Prerequisites for high-quality translation oftranslation of IFRSIFRS

Sole and unified official translation textSole and unified official translation text High-quality translationHigh-quality translation Feedback informationFeedback information

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Sole official translation textSole official translation text

The basic objective is high-quality translationThe basic objective is high-quality translation The primary translation should/must be The primary translation should/must be

constantly improvedconstantly improved In case of more then one translation users can In case of more then one translation users can

be confusedbe confused

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IASCFIASCF predictspredicts “approved”“approved” oror “official”“official” translation texttranslation text

TranslatingTranslating IFRSIFRS by the governmentby the government – – useful or wasteful?useful or wasteful?

What are theWhat are the “numbered”“numbered”// “bare” “bare” standards?standards?

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SAAA ExperienceSAAA Experience

Coexistence of several translations proved to Coexistence of several translations proved to be extremely be extremely onerous for correct onerous for correct understanding and application of standards. understanding and application of standards.

Translation of “numbered”/ “bare” standards Translation of “numbered”/ “bare” standards are not enough for correct understanding and are not enough for correct understanding and application of standards.application of standards.

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Translation ProcessTranslation Process

Establishing formal processes and Establishing formal processes and procedureprocedure

IASCFIASCF guidance regarding translation guidance regarding translation processprocess

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SAAA PracticeSAAA Practice SAAA Accounting BoardSAAA Accounting Board is a supreme body is a supreme body

for enacting and adopting professional for enacting and adopting professional regulation.regulation.

Accounting Board consists ofAccounting Board consists of 25 25 members:members: 10 10 membersmembers – – University professorsUniversity professors 4 4 membersmembers – – Accounting firms Accounting firms 3 3 membersmembers – – Banking sectorBanking sector 3 3 membersmembers – – SAAASAAA 1 1 membermember – – National BankNational Bank 1 1 membermember – – Securities CommissionSecurities Commission 1 1 membermember – – Tax SectorTax Sector 1 1 membermember – – Insurance SectorInsurance Sector 1 1 membermember – – Informational Technologies SectorInformational Technologies Sector

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Accounting Board has established Accounting Board has established standing IFRS Committee which is standing IFRS Committee which is responsible for translating IFRS.responsible for translating IFRS.

IFRSIFRS Committee has adopted the Committee has adopted the translation process recommended by the translation process recommended by the IASCFIASCF

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Translation ProcessTranslation Process

IFRS CommitteeIFRS Committee

Editor forEditor for IFRS publishingIFRS publishing

CoordinatorCoordinator

Review commissionReview commission Translators Translators

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IFRSIFRS Committee approves appointment of Committee approves appointment of coordinator, members of Review Commission coordinator, members of Review Commission and translatorsand translators

IFRSIFRS Committee adopts the list of translated Committee adopts the list of translated key terms.key terms.

If needed, IFRS Committee resolves other If needed, IFRS Committee resolves other issues that are not adjusted within translation issues that are not adjusted within translation processprocess

IFRSIFRS Committee approves final version of Committee approves final version of translation.translation.

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Coordinator: Coordinator: organizes translation process, Review organizes translation process, Review

Commission work, communication between Commission work, communication between participants in the process and other necessary participants in the process and other necessary activities.activities.

determines the list of questions and problems determines the list of questions and problems that are to be resolved during regular that are to be resolved during regular Commission meetings.Commission meetings.

submits IFRS Committee final version of submits IFRS Committee final version of translation for adoption.translation for adoption.

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Review Commission consists of persons with proficiency in Review Commission consists of persons with proficiency in English as well as with sound knowledge of technical terms, English as well as with sound knowledge of technical terms, who are engaged with accountancy practice in the domain of who are engaged with accountancy practice in the domain of industry, banking and insurance.industry, banking and insurance.

Commission members perform review of translations and Commission members perform review of translations and forward their comments to the coordinator.forward their comments to the coordinator. Issues that can't be Issues that can't be resolved in such a manner, are resolved in such a manner, are discussed at the regular discussed at the regular Commission meetings orCommission meetings or submitted to thesubmitted to the IFRS CommitteeIFRS Committee..

Prior to finalization, translations are submitted for final review Prior to finalization, translations are submitted for final review by the Commission members who do not speak English.by the Commission members who do not speak English. If If there are no unresolved issues after this review, translation there are no unresolved issues after this review, translation draft is considered final and submitted to the Committee for draft is considered final and submitted to the Committee for adoption. In such a way quality of translations is controlled on adoption. In such a way quality of translations is controlled on behalf of users who don't speak English.behalf of users who don't speak English.

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Translators are persons, authorized translators of Translators are persons, authorized translators of English language and have necessary experience in English language and have necessary experience in translating professional texts.translating professional texts.

It is recommendable to engage regular group of It is recommendable to engage regular group of translators, as for persons who are familiar with translators, as for persons who are familiar with accounting terminologyaccounting terminology..

All translators receive the list of translatedAll translators receive the list of translated key terms, key terms, approved by the IFRS Commission.approved by the IFRS Commission.

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SAAA ExperienceSAAA Experience

It is useful to include in the Review Commission It is useful to include in the Review Commission persons who are professionals and experienced in the persons who are professionals and experienced in the accounting profession but do not necessarily speak accounting profession but do not necessarily speak English.English.

It is not recommendable to allow direct contact It is not recommendable to allow direct contact between Review Commission membersbetween Review Commission members and and translators.translators.

All changes in the list of translated key terms should All changes in the list of translated key terms should be highlighted and timely circulated to all the be highlighted and timely circulated to all the participants in the translation.participants in the translation.

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After the edition is published, the After the edition is published, the coordinator has to collect feedback coordinator has to collect feedback information on the translation quality.information on the translation quality.

In preparing translation for a new edition, In preparing translation for a new edition, the coordinator submits report on the coordinator submits report on received feedback information and received feedback information and corrections proposals.corrections proposals.

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RecommendationsRecommendations

Several factors, out of which the most Several factors, out of which the most important include:important include:

IASB/IASCF supportIASB/IASCF support Government supportGovernment support

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IASBIASB andand IASCF SupportIASCF Support

StandardsStandards Technical supportTechnical support Clear attitude onClear attitude on official translationofficial translation Clear attitude on cost reimbursementClear attitude on cost reimbursement

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StandardsStandards Using simpler, shorter and clearer sentences in Using simpler, shorter and clearer sentences in

the Standardsthe Standards Using distinctive terms, that can not be Using distinctive terms, that can not be

misunderstoodmisunderstood In case of using terms that are new or specific, In case of using terms that are new or specific,

provision of adequate explanation provision of adequate explanation in the form in the form of definitions or examplesof definitions or examples

More examples illustrating standards More examples illustrating standards applicationapplication

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Word documents (track changes) are of Word documents (track changes) are of immeasurable assistance in IFRS immeasurable assistance in IFRS updating – and it is recommended for updating – and it is recommended for them to be used for drafts proposals of them to be used for drafts proposals of the new or amended standards. the new or amended standards.

Establishing department which can be Establishing department which can be contacted for the purpose of technical contacted for the purpose of technical explanation of certain notions.explanation of certain notions.

Technical SupportTechnical Support

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Sole official translationSole official translation If there isIf there is an official translation, avoiding an official translation, avoiding

additional publishing of “numbered”additional publishing of “numbered” / / “bared”“bared” standardsstandards

CopyrightCopyright

Official TranslationOfficial Translation

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Translating process causes large costs, Translating process causes large costs, that can hardly be reimbursed in a short that can hardly be reimbursed in a short term.term.

SAAA experience indicates thatSAAA experience indicates that additional publishing of “numbered”additional publishing of “numbered” / / “bared”“bared” standards additionally standards additionally jeopardizes economic sustainability of the jeopardizes economic sustainability of the translation process.translation process.

Costs and CompensationCosts and Compensation

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A professional organization publishes A professional organization publishes IFRS translation – causes large costsIFRS translation – causes large costs

The government publishes translation The government publishes translation without any costswithout any costs

Commercial enterprises take over Commercial enterprises take over translations and publish them at no costtranslations and publish them at no cost

Economic sustainability???Economic sustainability???

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IASCFIASCF states:states: “If an IASCF approved “If an IASCF approved translation in the national language exist, translation in the national language exist, the Foundation waives its copyright on the Foundation waives its copyright on the translation within the country and the translation within the country and receives reimbursement for the receives reimbursement for the translation costs.”translation costs.”

Is the same principle applied in case Is the same principle applied in case when IASCF has not directly translated when IASCF has not directly translated Standards?Standards?

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Government SupportGovernment Support

Cooperation with national professional Cooperation with national professional organizationorganization

Prevention of conflicts of interestPrevention of conflicts of interest Transparent establishment of clear and Transparent establishment of clear and

applicable legal framework regardingapplicable legal framework regarding IFRSIFRS implementation implementation