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Incompetent Members will Make Audit Commission Useless Body

The process of formation of bookkeeping, accountability and audit commission is underway. The commission will unite 7 bodies, including 4 ones from state structures and three ones from professional organizations, business associations and academic circles.

If the commission is staffed with incompetent persons, the body will go useless, Zurab Lalazashvili, the BDO managing partner told the Business Contact. This commission must be independent from the Government to make it more reliable and trustworthy, he said.

“Instead of self-regulation, the auditors’ sector has started regulation of a public state body that will examine quality control system of auditor companies.

The law will concern the field of corporate management of companies and additional chains will be created – the body that will supervise the field of auditor and financial reports must be independent from the authorities and must be managed by a board. The Board shall carry out full monitoring and control of this office.

At this stage the professionals and experts are discussing which candidacy to propose, because it is of crucial importance to staff the board with people who knows international standards for financial reporting  and auditing.

If this board is staffed with less-competent persons, we will receive very bad results and an useless body. Therefore, we plan to supervise this process scrupulously to select appropriate persons and heal the financial reporting in the country”, Lalazashvili said. The board members are approved by the Finance Ministry and their term of office lasts for several years.

The law will strengthen and develop Georgian auditor companies, because Georgian companies are facing certain difficulties with establishing operations on the domestic auditor market, Lalazashvili said.

“This field was not regulated for many years. Consequently, ugly practice and inappropriate services were dominating and only international companies were strengthening  on the market.

This will be very good for Georgian companies. A joint registry will be created and the companies included in it will be reliable companies. Consequently, Georgian companies will grow and strengthen.

Regretfully, we have not developed financial reporting culture. In 99% of cases, when a company has not prepared a financial reporting valuably, its founder does not know real indicator of profits. Therefore, companies will receive real benefits from developing financial reporting system”, Lalazashvili said.