Accountants as Catalysts for Growth in the Western Balkans : Initial Assessment of SME's Financial Management and Financial Governance
Good financial management and financial governance is not only an imperative for the largest companies; smaller privately-owned businesses dominate economies in the Western Balkans providing most of jobs and contributing most of the value added to...
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| Format: | Report |
| Language: | English |
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World Bank, Vienna
2019
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| Online Access: | http://documents.worldbank.org/curated/en/854361557396385425/Accountants-as-Catalysts-for-Growth-A4G-in-the-Western-Balkans-Initial-Assessment-of-SMEs-Financial-Management-and-Financial-Governance http://hdl.handle.net/10986/31836 |
| Summary: | Good financial management and financial
governance is not only an imperative for the largest
companies; smaller privately-owned businesses dominate
economies in the Western Balkans providing most of jobs and
contributing most of the value added to the economy, and so
it is essential that smaller businesses with high growth
potential are not constrained by poor financial management
practices. The World Bank’s Center for Financial Reporting
Reform (CFRR) has developed a landscape assessment approach”
that aims to identify the state of financial management and
financial governance practices of Micro, Small and Medium
Sized Entities (MSMEs) in the Western Balkans and
opportunities for improvement, building on the Report on the
Observance of Standards and Codes (ROSCs) performed in the
region. The landscape assessment approach has been developed
by the CFRR under the Accountants as Catalysts for Growth
(A4G) initiative which aims to leverage the accounting
profession to support improvements in the management of the
financial health of MSMEs. This work compliments the Reports
on Observance of Standards and Codes (ROSCs) that have been
completed by looking at non-standard aspects of financial
management. Preliminary landscape assessments have been
performed in Serbia and Albania; however, this work has not
yet been formally reported. These preliminary assessments
have been performed to test the assessment approach before a
broader roll-out under the future EU-REPARIS program work as
well as identify the key financial management and financial
governance practices of MSMEs that need improvement, based
on stakeholder observation, and consider factors that may be
giving rise to such practices and possible approaches to
address them. Reports for Serbia and Albania will be
completed once the assessment is finalized which may include
further work in both countries resulting from refinements to
the assessment approach. Stakeholder observations obtained
from preliminary assessment work were used to identify
financial management deficiencies in MSMEs, possible causal
factors, and approaches to improvement. Stakeholders
identified some fundamental deficiencies in financial
management and financial governance of MSMEs in Serbia and
Albania that appear to be systemic and may constrain the
MSME Sector’s development overall.is important to note that
these are not expressed as actionable recommendations; they
are offered as key themes that should be discussed by the
main stakeholders to coordinate and identify agreed actions
with these themes and others. A key issue identified at this
initial stage of work is that approaches to address
shortcomings in financial management and financial
governance of MSMEs are constrained by market conditions and
institutional capacity. Future work under the A4G
initiative, including completing assessments in all Western
Balkans countries, and developing activities to support
improvements in MSME financial management and financial
governance, will need to take account of the results of this
preliminary assessment work. |
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