Republic of Tajikistan : Accounting and Auditing

This report describes the results of a ROSC assessment of the accounting, financial reporting and auditing requirements and practices of the Republic of Tajikistan's enterprise and financial sectors. The report assesses the quality of the Tajik financial reporting framework and makes policy recommendations for improvement. With a gross national income per capita of US$430, Tajikistan remains the poorest country in the former Soviet Union. Despite various reforms over the past several years, the business climate still lags behind other transition countries. Many of the country's problems stem from the 1992-1997 civil war, which so damaged the country's economic infrastructure that it precipitated a sharp decline in industrial and agricultural production. Although there has been moderate domestic growth since 1997, real output is currently just over 50 percent of the 1989 level. The Republic of Tajikistan's small financial system is dominated by a few banks. The level of financial activity is among the lowest in the world, with Tajik lending amounting to merely 7.1 percent of GDP in 2007. More than 80 percent of the country s small- to medium-sized enterprises do not use the banking sector. The Republic of Tajikistan needs to improve and strengthen its corporate financial reporting system to ensure that public interest entities, such as banks and state-owned entities, become more accountable and transparent. The country needs enhanced accounting, disclosure and auditing regulations, more power for regulators and professional bodies to enforce accounting and auditing regulations and more extensive, practical and continuing professional education. All of this should be done without adding excessive regulatory burdens on medium-sized, small and micro entities.