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Professional Support and Auditor Control in Hungary's Financial Reporting Landscape

This article explores the role of the Chamber of Hungarian Auditors in overseeing financial reporting and auditing practices in Hungary. It highlights key topics including the institution's statistics, the state of enterprises, accounting regulations, and the advisory services available. Challenges such as currency exchange issues, tax management, and compliance with EU standards are discussed, along with the need for enhanced auditor support in an evolving regulatory environment. The article concludes with insights on expected changes and the growing demand for IFRS-qualified experts.

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Professional Support and Auditor Control in Hungary's Financial Reporting Landscape

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Presentation Transcript

  1. Professional support and auditor’scontrol in case of differentfinancialreports in Hungary- Chamber of HungarianAuditors

  2. Topics 1) Chamber in numbers2) Enterprises in Hungary3) Accounting rules4) Actonthe Chamber, services of the Chamber5) Advisoryservices – opportunities and restrictions

  3. Chamber in numbers

  4. Chamber in numbers

  5. Revenue

  6. Number and distribution of audit reports

  7. Enterprises in Hungary 1 • Relativelylargenumber of SEs –sizecategoriesaredifferentfromEU • Long-termsubmissiondeadline, accounting tasksconcentratingatthe end • EU environment – obligationtoadapttoEUregulations • Needtomanagetaxproblems

  8. Enterprises in Hungary 2 • Hungary is not a eurozonemember, alot of currencyexchangeproblems • Enterprisesnotalwaysemploypreparedfinancial-accountingexperts • A lot of (more and more) firmsarenotobligedto audit – lack of auditor’ssupport • Less taxcontrol – no control

  9. Accounting rules 1 • Regulationbylaws – continental accounting practice • Manyareexemptedfromdetailedreportingobligation • IFRS areneededonly in case of consolidatedaccountsofregisteredfirms • A lot of changesin regulation, a lot of consequences in accounting – hardtomanage

  10. Accounting rules 2 • Standard settingbodieshavebeenestablished, but no approved standard in effectyet • Singleinterpretation of accounting issues is notyetontrack – interpretive body doesnotoperate • Standard onmicroentities is ready, butnotindependent, it has notbeenincorporatedintothe accounting act

  11. Actonthe Chamber, servicesbytheChamber • Capacity of manyauditors is notused • Regulationallowsforbook-keepingservices (preparation of report) • Problem: rulesforconflicts of interests, ethicsissues • Difficulttocontrol and prove

  12. Advisoryservices – possibilities and restrictions1 • Biggerfirms: advisory service: separate business activity • Smaller audit entities – continuouspresence, pre-investigations, consultations • Consequences – compliancewithstandards – ethics, conflict of interests – controlbythe Chamber, qualitycontrol

  13. Advisoryservices – possibilitiesand restrictions 2 • Consolidatedreports – expectedtoremainthe market of thebigfirms • Individualannualreports – bigfirms in case of IFRS implementation, opencompetition in othercases • Simplified, microentitiesreports (without audit) – possibilityforsmallerentities, individualauditors

  14. Expected (hoped) changes • Enlargethegroup of expertspreparing IFRS reports – growingdemandforexperts, auditors • Increase of thenumberof IFRS trainings, exams, qualifications – more preparedexpertgroup • Supporttopreparereportsat a higherlevel

  15. Thankyouforyourattention

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