59601 November 2010 Number 163 www.worldbank.org/enbreve A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region. THE WORLD BANK Expanding Financial Reporting and Auditing Knowledge in Latin America and the Caribbean: CReCER and the Community of Practice By David Martínez Spanish Fund For Latin America and the Caribbean The World Bank, What began as the annual organization of the regional the Inter-American CReCER Conference has, through the leadership and Development Bank guidance of its stakeholders, developed and expanded (IDB), the International into a multi-dimensional initiative encompassing (a) Federation of Accountants (IFAC), and the six global audit the production of studies and reports such as the networks (GPPC) partnered together to start the CReCER "Accounting for Growth in Latin America and the (Spanish acronym of Accounting and Accountability for Caribbean" publication; (b) knowledge sharing in the Regional Economic Growth) initiative in 2007. form of conferences and communities of practice (the CReCER CoP); (c) technical assistance and support Objectives and Summary for accountancy reform through the World Bank, the FIRST Initiative, the UK's Department for International The main objective of CReCER is to create greater Development (DFID), and the SFLAC; and (d) collaborative awareness of the importance of sound financial relationships and networks throughout the region. reporting and auditing for the development of a well- functioning market economy and of an efficient public sector, which in turn are the cornerstone for equitable and sustainable economic development, and to promote the adoption of international standards for Analytical Products corporate financial reporting and auditing. CReCER is relevant to the work and interests of policymakers, senior civil servants, financial sector Technical Knowledge regulators, standard-setters, academics, accountants Assistance Sharing and auditors, private sector stakeholders, and regional and international organizations, including the donor community. The Spanish Fund for Latin America and the Caribbean (SFLAC) has funded Partnerships the creation of the CReCER Community of Practice & Networking (CoP) that brings these achievements together (see www.creceramericas.ning.com). 1 CReCER Activities the tightening of financial regulation and a more responsible banking supervision, which helped them To date, the following activities are attributed to be much better prepared to face the challenging CReCER: (i) the organization and delivery of four times. She also underscored that the issues related to regional conferences; (ii) the development of the transparency and accountability discussed at CReCER aforementioned Community of Practice; (iii) the will play an important role during the global economic publication of Spanish language translations of the recovery, and that sound financial management in training modules created by the International Financial both the private and public sectors will be central Reporting Standards (IFRS) for Small and Medium- in putting LAC economies on a positive growth sized Entities (SMEs); (iv) the collaboration of regional trajectory. professional associations and enterprises; (v) technical assistance projects in El Salvador, Honduras, Peru, Chile, and Haiti. The SFLAC has funded items ii and iii. CReCER Conferences Since 2007, four global conferences (Mexico, El Salvador, Brazil and Panama) have been held providing a channel for dialogue and for countries to share experiences and best practices. They have helped to generate and sustain interest in the development of the accountancy profession, promotion of international standards for corporate financial reporting, and improvement of public financial management in Latin America and the Caribbean Region (LAC). The web sites www.creceramericas.ning.com and www.crecerliderazgo.org have more information on these events. For the fourth CReCER conference, which took place in The first conference took place in Mexico City, June Panama on October 5, 2010, the organizers opted for a 13-15, 2007, followed by a conference in San Salvador, new approach. Participation in the CReCER Leadership June 11-13, 2008. and Commitment Regional Event was by invitation only, targeted at LAC's top financial management The third conference took place in São Paulo, decision-makers. September 23-25, 2009. Speaking to over 1,000 participants from Instead of the large plenary or break-out sessions which 32 countries, Pamela characterized previous years' CReCER conferences, Cox, the World Bank's this format utilized more intimate, smaller group, Vice President for LAC, roundtable discussions to allow for an exchange of noted that the region's ideas and greater participant interaction. The positive countries were able feedback received by all counterparts made this fourth to avert a domestic edition a great success. financial crisis, in large part, thanks The success of the CReCER conferences demonstrates to improvements in that the issues discussed are very relevant for the 2 region. It also shows that regional policymakers By webcasting presentations from leaders in the and practitioners in the fields of public financial profession, including researchers and practitioners management and corporate financial reporting, truly with knowledge and skills on key topics of accountancy value this type of initiatives where they can exchange that are particularly relevant to the region, knowledge their experience and identify opportunities for sharing is furthered at a very low cost to participants. cooperation. Building on the success of the CReCER This helps to encourage regional collaboration as well conferences, additional activities have been added to as education, and even some aspects of assistance. the agenda. Two sessions have already taken place. On June 21, Community of Practice Paul Pacter, Member of IASB, and Mike Wells, Director of the IFRS Foundation Education Initiative, broadly The World Bank and the CReCER Partners created the explained the Standard of IFRS for SMEs and eligibility Community of Practice (CoP), funded by the SFLAC, as criteria, with examples, to 90 participants distributed an informal group of individuals who share a common in the GDLN Centers across the region. interest in promoting improved financial reporting practices in the public and corporate sectors in LAC. On August 31, Henri Fortin, Sr Financial Management Its purpose is to encourage an informed dialogue and Specialist of the World Bank, and Jorge Gil, Director of disseminate good practices among CoP members the Standard-Setter Body in Argentina, respectively through a number of activities, such as the Regional presented the recently published book "Accounting Dialogue Series (explained below), the CReCER for Growth in Latin America and the Caribbean", and Knowledge Portal with publications about the topics the experience of IFRS adoption in Argentina. relevant to CReCER, and the gathering of materials derived from technical assistance activities like the On December 7, the CReCER team will have the third First Regional Spanish-language Train-the-Trainers Regional Dialogue Series on accounting education Workshop on IFRS for and certification. More information is available at SMEs organized in www.creceramericas.ning.com/groups. Panama on October 11-14, 2010. The CoP Technical Assistance provides an online platform for continued From October 11 to 14, the World Bank co-organized collaboration and with the IFRS Foundation, the First Spanish-language dissemination of good Train-the-Trainers Workshop on IFRS for SMEs practices and success in Latin America and the Caribbean Region (more stories. details at http://www.ifrs.org/IFRS+for+SMEs/ SME+Workshops.htm and www.creceramericas. CReCER Regional Dialogue Series ning.com). The CReCER Regional Dialogue Series comprises The local accounting body in Panama City (Colegio de videoconference-based seminars, utilizing the Global Contadores Públicos Autorizados de Panamá) hosted Development Learning Network (GDLN) platform. the event. The speakers/instructors were Haydeé de Seventeen countries from LAC will be connected Chau, Partner at KPMG Panama, and Michael Wells, throughout the series (up to six at a time) with Director of the IFRS Foundation Education Initiative. leading international experts from within the region, Haydeé spoke in Spanish, and Michael in English, with as well as from the United States and Europe, to simultaneous interpretation throughout. discuss pertinent accounting and auditing issues. These seminars will also be webstreamed on the The Workshop and the translation of most of the IFRS CReCER Community of Practice web site. for SMEs training modules used were funded, in part, 3 Standard, each followed by active Q&A sessions. The Workshop was moderated by David Martínez Muñoz, Operations Officer at the World Bank. In particular, the event provided an opportunity for participants to improve their understanding of which entities were eligible to apply the IFRS for SMEs in their own jurisdictions. The PowerPoint templates for the presentations used in the three-day Train-the-Trainers Workshop on IFRS for SMEs are now freely available in English at the by the SFLAC which has, as one of its main goals, to IFRS Foundation web site (http://www.ifrs.org/ assist client countries to develop a stronger private IFRS+for+SMEs/SME+Workshops.htm). sector through provision of technical assistance and advisory services. The presentations in Spanish are available at the CReCER CoP web site (http://creceramericas.ning.com/group/ The objective of this Workshop was to develop the replicatallerniifpymepanamoctubre2010). capacity of local Financial Reporting Trainers to train others in the application of the IFRS for SMEs. The Workshop was planned as an interactive learning course wherein participants shared experiences, guided and prompted by the speakers who acted as facilitators. One hundred and fourteen participants from 16 countries in LAC, representing ministries of finance, professional accounting bodies, academics, and private accounting and auditing firms, attended the event. Over the three-day Workshop, Michael Wells and Haydeé de Chau covered the 35 sections of the About the Author David Martínez is an Operations Officer in the Latin America and the Caribbean Financial Management Unit (LCSFM) of the World Bank. Disclaimer: The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development / The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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