Small businesses are an economic cornerstone in the Western Balkans*. They represent a main source of economic growth and employment in the region, and support to SMEs is a key factor to achieve economic recovery at the local, national, and regional levels.
At the heart of providing support is corporate financial reporting which helps provide transparent and reliable financial information. This is critical in building trust in the private sector and has been shown to expand access to credit at reduced cost – a vital component in helping small companies develop and grow. If businesses are able to access affordable credit and receive competent advice and high-quality services from well trained professionals including accountants, they are better placed to grow and prosper - providing jobs and contributing to the public purse through taxes.
Since 2009, the Vienna based World Bank Centre for Financial Reporting Reform (CFRR) has worked with counterparts and stakeholders throughout the region to strengthen the corporate financial reporting frameworks. Initiatives such as the Road to Europe: Program of Accounting Reform and Institutional Strengthening (REPARIS) support countries to adopt good international practices as well as closer alignment with European Union (EU) requirements. Particularly the latter is an important pillar in the countries' ambitions to better integrate with the EU and participate in the larger European economic market.
Recognizing that the creation of such an environment is a longer-term process, CFRR is now working to build on this progress through the introduction of a successor program, EU-REPARIS. This program, financed by the European Union (EU) and part of the EU-led Western Balkans Enterprise Development and Innovation Facility Western Balkans Enterprise Development and Innovation Facility (WB EDIF), will engage with businesses, accountants, and the wider public to increase knowledge around the importance of corporate financial reporting and help countries complete the alignment process with EU requirements.
SMEs are the core of this new program, which emphasizes the importance of financial reporting in gaining access to finance. Activities implemented during this phase will focus on reform implementation - wider engagement with stakeholders, and building the skills and knowledge of the accountancy profession, including improving modern accountancy education and training.
“We know what to expect and understand the advantages of financial reporting,” noted one stakeholder during the recent launch of the program in Vienna, “but there is not yet enough awareness of those benefits.”
As a regional program, EU-REPARIS allows participants from different countries to share and benefit from each other’s knowledge and experience as their enterprises strive to produce meaningful and comparable financial information, which investors and creditors can then use to make informed decisions.
Collectively, these participants are working to strengthen corporate financial reporting by implementing effective legal frameworks and by broadcasting the message that these reforms support businesses in becoming more transparent, and, more generally, create an environment conducive to investment and growth.
Further information on the launch of the program and program background information can be found here.
* Albania, Bosnia and Herzegovina, Kosovo, the Former Yugoslav Republic (FYR) of Macedonia, Montenegro, and Serbia