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February 27, 2015

EU Accounting Directive implementation sparks power struggle in Bulgaria

By Isabella Grotto

Amendments to accounting rules proposed by Bulgaria’s Institute of Certified Public Accountants (ICPA) have been met with alarm by the country’s Association of the Professional Accounting Companies (APAC).

In the lead up to the implementation of the EU Accounting Directive, implementation proposals submitted to the Ministry of Finance by ICPA have led to the institution being accused of attempting to seize control of the country’s profession.

The legislative proposal includes the creation of a new, state-funded national accounting council under the guardianship of the institute.

If passed, the law will come into effect from 1 January 2016 and critics have voiced concern that Bulgaria’s Ministry of Finance will issue the draft bill at the last moment, denying the country’s industry time to react.

An APAC response document obtained by The Accountant criticised ICPA’s proposal as conflicting with "basic challenges" in budgeting and spending affecting the government, currently facing a "large ‘hole’ in the budget and frightening levels of public debt."

The response reads: "the provisions of the accountancy draft bill provide extremely wide powers to this [ICPA] council and its president."

Further, according to APAC, ICPA’s omission of micro-entities from the proposed bill contravenes the Directive’s spirit of "think small first" and could prove damaging to the economic development plan set out by the Bulgarian government, centred on the promotion of small and medium-sized businesses.

"In practice, in this way a lot of the small undertakings would be subject to mandatory audit by a member of ICPA," notes ACPA’s response.

Speaking to The Accountant, Katya Krancheva, managing partner of national firm K&K Accounting and author of ACPA’s response, described the move by ICPA as one among "numerous attempts" by different industry stakeholders to control the Bulgaria’s industry.

The full report is available on The Accountant here: http://www.theaccountant-online.com/news/eu-accounting-directive-implementation-bulgarian-smes-revolt-against-auditors-bid-to-control-the-profession-4521295

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