Transcript RUSSIAN CORPORATE GOVERNANCE ROUNDTABLE MEETING SESSION 4: HOW SHOULD IFRS BE ENFORCED? THE EXPERIENCE OF TURKEY November 11, 2004-Moscow Dr.

RUSSIAN CORPORATE GOVERNANCE
ROUNDTABLE MEETING
SESSION 4: HOW SHOULD IFRS BE ENFORCED?
THE EXPERIENCE OF TURKEY
November 11, 2004-Moscow
Dr. A.R. Zafer SAYAR
Head of Accounting and Auditing Standards Department
Capital Markets Board of Turkey
Vice Chairman
Turkish Accounting Standards Board
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CAPITAL MARKETS
BOARD
OF TURKEY

Regulatory and supervisory authority in the capital markets.

Capital Markets Law (CML) enacted in 1981.

MISSION STATEMENT:
“to take the necessary measures for fostering the
development of capital markets, and hence to contribute to
the efficient allocation of financial resources in the country
while ensuring investor protection”

Establishment of accounting and auditing standards in capital
markets in harmonization with international standards

Membership to the IOSCO the relationships with the relevant
groups in the OECD and EC are continued.
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IMPROVEMENTS IN TURKISH
CAPITAL MARKETS
 European Commission
ACCOUNTING
(IFRS)
 IMF and WorldBank
 Inflationary Accouting
 IFRS
 Turkish Accounting
Standards Board
 Consolidated Financial
Statements
AUDITING
(SARBANES-OXLEY)
CORPORATE
GOVERNANCE
 Ethical Standards
 Corporate Responsibility
 Independence of Auditors
 Restored Confidence in
Capital Markets
 Corporate Governance
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NEW ACCOUNTING
STANDARDS

Moved Closer to Anglo-Saxon Model (IFRS)

An important step on the road to ensuring fair
presentation of financial statements (2003);

“Inflation-adjusted consolidated financial statements”

“Inflation-adjusted financial statements”
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WHAT ABOUT IFRS IN TURKEY?

All EU companies listed on a regulated market to use IFRS from
2005 onwards and allowed Member States to extend this
requirement to all companies.

Existing regulations have been made harmonious with IFRS.




Consists 33 IFRS.Newly issued IFRS will be adopted immediately.
Required for all listed companies by the year 2005
Until then, IFRS may be applied.
Today, we have many listed companies applying IFRS (%75 of
market capitalization in Istanbul Stock Exchange)
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TURKISH GAAP
A
single robust general-purpose system in
compliance with IFRS.
 Turkish




Accounting Standards Board (1999)
Sets uniform national accounting standards
compatible with IFRS.
Has its own public legal entity and administrative
and financial autonomy,
CMB supports TASB.
Formal relationship with IASB.
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ENFORCEMENT OF IFRS
 Making
regulations would mean nothing unless
effective implementation and enforcement exist
in the market.

Enforcement of standards is vital for global capital
markets

We need convergence in;



Accounting
Auditing
Disclosure-Corporate Governance
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AUDITING AND CORPORATE
GOVERNANVE PRINCIPLES IN
TURKEY
Existing regulations have been revised in accordance with SarbanesOxley Act:

A project: the full revision of existing auditing standards compatibly with
International Standards on Auditing.

CMB
Corporate Governance Code has been promoted (OECD
principles)
Rating
agencies can rate the level of corporate governance of companies
under “Corporate Governance Practices” of Capital Markets Board of
Turkey.
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ROLE OF NATIONAL
STANDARD SETTER

We need to work to continue
to enhance cooperation and consistency in regulatory review and
enforcement, and


to improve training and interpretive mechanisms as well.
We
have to work to develop processes that would encourage consultation
amongst regulators, thereby reducing the chances for multiple
interpretations.
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