World Bank Document

E. 
Enforcing Accounting and Auditing Standards
Enforcing Accounting and Financial Reporting Standards 
 
60. The LOA gives the MoF broad powers to set the standards that regulate Uzbek 
accounting and financial reporting for commercial entities. The MoF does not, however, have 
the mandate to ensure enforcement of the application of financial reporting standards. Regulation 
of bank accounting and financial reporting in banks and other financial institutions has been 
assigned to the CBU.
  
61. The statutory audit function has limited effect in ensuring compliance with financial 
reporting requirements, particularly as the level of assurance provided by audits is limited. 
There are two reasons for this: because some entities don’t have enough in-house skills for 
preparing financial statements, their auditors possibly help them with that process. It may be that 
auditors then audit the statements they have helped prepare, raising the question of auditor 
independence. Moreover, as noted below, audit quality varies greatly in the Republic of 
Uzbekistan. 
62.  Similar to peer countries, the question arises about the importance of the vast SME 
sector’s compliance with NAS. While reliable financial information is a fundamental 
requirement for calculating tax, the extent of reporting required from the SME sector may deserve 
reconsideration. Heavy reporting requirements could constrain their growth. 
Enforcing Auditing Standards 

63. Enforcement of auditing standards is the responsibility of the MoF Licensing 
Authority. The unit employs seven inspectors who look at the work of licensed auditors. A 
coordination committee approves the list of audit firms to be reviewed each year, and each firm is 
to be reviewed every three years. This committee also processes complaints about audit work. 
The Licensing Authority does not have the authority to withdraw a license on the basis of a 
complaint; the license withdrawal can be done only through the court. Prior to 2008 there were 
few court cases that did end with license revocation.
64. The profession has made various efforts to participate in the quality assurance