This reform is aimed to harmonise the national accounting and audit laws with the European Union’s legislation to increase the transparency and reliability of business and public sector entities financial statements used in the management decision-making process, in particular, in public finance management, and thereby promote investment and business climate in Ukraine.
In the period from 2018 to 2020, measures were taken to update the accounting and financial reporting system in the public sector, in particular, a single public sector chart of accounts was introduced, public sector entities switched to financial reporting using a complete set of national public sector accounting regulations (standards), the general consolidated financial statements of public sector entities were prepared for collecting data on the general property status and performance of public sector entities and budgets.
Certain provisions of Law of Ukraine “On Accounting and Financial Reporting in Ukraine” were amended for the purpose of adjusting the regulatory framework for accounting and financial reporting in accordance with EU legislation and enhancing the transparency and comparability of financial statements of enterprises; the Financial Statement Submission Process was updated together with simplified financial statement forms and procedures for micro- and small enterprises; the guidelines for accounting some assets and liabilities were brought in line with the international financial reporting standards.
Law of Ukraine “On Auditing Financial Statements and Audit Activities” was adopted, entered into force on 07 February 2018 and was enacted on 01 October 2018 to harmonise national audit laws with the EU legislation Pursuant to this Law of Ukraine, the following steps were taken in the period from 2018 to 2020:
- the Government established the bodies forming the system of non-governmental oversight of audit activities, state-owned institution “Non-governmental Body for Audit Activities Oversight”, the Audit Oversight Board, the nomination committee and the Certification Commission, and adopted their policies;
- the Government approved the ranked-choice voting processes for electing the representatives of professional auditor and accountant organisations to the nomination committee and the Certification Commission; the ranked-choice voting processes for electing the representatives of professional auditor and accountant organisations from among the members of the International Federation of Accountants to the nomination committee and the Certification Commission; the guidelines for keeping the Register of Auditors and Audit Entities; the guidelines for appointment of an independent audit entity for the audit of annual financial statements of the Non-governmental Body for Audit Activities Oversight; the policy for disclosure of the amount and use of technical assistance provided to the Non-governmental Body for Audit Activities Oversight by foreign governments, agencies and institutions and by international financial organisations; the guidelines for assessment of audit services quality, and the fee paid by audit entities to the Non-governmental Body for Audit Activities Oversight.
Ukraine’s cooperation with international organisations and financial institutions, its activities in foreign exchange stock and investment markets, and the Government’s commitment to harmonise the national laws with the EU legislation and international standards require further reform of the accounting and audit system to ensure open and transparent information on the financial situation of Ukrainian businesses.
The Government seeks to expand the accounting and audit reforms relating to harmonisation of the national laws with the EU legislation and international standards to promote the country’s competitiveness and attract foreign investment into the national economy.
Accurate information on the performance of public sector entities can be obtained after the development of a unified methodology of accounting and budget execution reporting for budget-funded entities and adaptation of such methodology to the provisions of the International Public Sector Accounting Standards (IPSAS). This will ensure both the utility and comparability of financial information and a common understanding of economic indicators.
Further development of an efficient audit regulation system will be focused on promoting and enhancing the positive investment climate in Ukraine, e.g. by building trust in auditors, reducing the risk of poor audit services and encouraging transparency and accuracy of financial statements of issuers, banks, insurance companies, other public companies, including state-owned enterprises.
The Government will continue to reform the accounting and audit system by:
updating the accounting and financial reporting system in the public sector;
improving the national accounting policies (standards) in accordance with the accepted international financial reporting standards and any amendments thereto;
setting the process for issuing audit authorisations to auditors and the guidelines for ongoing professional training of auditors.
The accounting and audit reforms are being implemented by the Ministry of Finance of Ukraine in cooperation with state-owned institution “Non-governmental Body for Audit Activities Oversight”, the Certification Commission, the Accounting Methodology Board at the Ministry of Finance of Ukraine, and the International Financial Reporting Standards Board at the Ministry of Finance of Ukraine, with the support of international partners, including:
- the European Union / EU for Stronger Public Finance Systems of Local Governments project (EU4LOGICA);
To find out more about the regulatory documentation related to accounting and audit please visit the official website of the Ministry of Finance of Ukraine at:
- introduction of the international financial reporting standards;