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Round table on the subject “The role of financial statements for the development of the Bulgarian stock market”

"Global Audit Services" took part in the round table set up by DNEVNIK and the professional accounting site The forum took place on 10.10.2008 in "Radisson Sas" hotel.

The round table was attended by prominent members of the investment and accounting societies. Ofelia Boronsuzova, the managing partner in "Global Audit Services", was invited to represent the Company on the meeting.

The main purpose of the forum was through an open discussion between the two groups to reveal new opportunities for enhancing the trust in the financial statements and the auditors' reports, as well as possibilities for overcoming the financial crisis. The following opportunities for reassuring the trust in public companies and "revitalizing" the Bulgarian stock exchange were summarized:

  •  Increasing the importance of the internal audit for the public companies. The availability of reliable controls and independent internal audit are of primary importance for regaining the investors' trust in Bulgarian companies. In order to harmonize the Bulgarian legislation with the EU legal system, in June 2008 and important normative change was adopted, requiring creation of audit committees in all public-interest companies. As proved practices from the developed countries show, the level of development of the internal audit reflects on the proper management of the business processes and the control of the risks which each company is exposed to. One of the ways to attract foreign investors to the Bulgarian financial markets and regain the trust of national investors is the development of modern internal audit using a risk - oriented approach that will increase the business value and will lead to favorable for the business changes.
  • Possible changes of the models for defining the fair value of assets and liabilities and in particular for evaluating the financial instruments were discussed at the meeting, as the plummeting prices of financial instruments cause considerable losses from revaluation that give a false idea of the companies' actual performance. There were several propositions for consideration of evaluation methodology developed by the Bulgarian Association of the Managing Companies.
  •  In order to obtain information of higher quality about the financial position of the companies and achieve comparability with the information released by enterprises participating on international stock exchanges, there was a discussion for the adoption of possible changes in the requirements of the Financial Supervision Commission for the presentation of financial information. Another possibility that was taken into consideration is the development of unified rules for the different industries about the preparation of financial statements.
  • The participants assessed also the significance the public supervisory control and the supervision on the quality of the independent financial audit, especially in public - interest companies have for increasing the value of the information in the financial statements and the trust in the auditors' reports. The investors unanimously stated that the "transparency" of the public companies is of foremost importance for their trustworthiness as well as for attracting of new investors.
  • Last but not least, it was emphasized that the managers play of the public companies for releasing and presentation of sufficient and reliable information the financial statements in accordance with the national legislation, considering both the projected information in the managers' reports and in the financial statements.
This discussion has not been brought to an end and will be resumed at a following meeting between the investors and the representatives of the accounting profession.