It is 25 years since communism collapsed in Central and Eastern Europe – time enough for a new generation of dynamic finance professionals to emerge in the region. One of them is Katarína Kaszasová, among other things director general at the Slovak Ministry of Finance and an ACCA Achievement Award Winner 2014 – the first woman from Slovakia to gain the prestigious award.
Were it not for the 1989 revolutions in Central and Eastern Europe, Kaszasová might never have chosen a career in auditing. Finance was not her first choice – that was chemical engineering. ‘I started university in 1988, during communism, when other opportunities were limited,’ she recalls. ‘Because both of my parents graduated in chemistry, the decision was natural. But during university and later on, many dramatic changes took place in Slovakia, and in 1989 the Velvet Revolution ended the communist regime.’
These changes, while exciting and welcome, also brought huge uncertainty, which grew even greater when Slovakia and the Czech Republic went their separate ways on 1 January 1993. The chemical industry and other sectors in Slovakia suffered sharp decline for over a decade as a result of the transitions, rapid privatisation and political turbulence.
But the geopolitical transformation also led to a surge in demand from businesses for qualified financial professionals. Kaszasová finished her chemical engineering degree in 1993. ‘I decided to complement my diploma from the Technical University of Bratislava with a qualification from the University of Economics Bratislava, where I specialised in accounting and auditing,’ she explains.
She was still a student when she joined global audit firm KPMG in 1994 as an audit assistant, later rising to managerial level. Her work involved financial audits of financial statements prepared in accordance with national and international financial reporting standards. She also audited chemical, pharmaceutical and food companies, and performed due diligence work.
Despite the career switch, Kaszasová argues that a chemical engineering background has proved very useful in her career thanks to similarities between the two disciplines. She puts it this way: ‘Most important is the logic of any processes that I run in my current work: I know what the inputs are, I know how to use them, and I know what kind of output is expected or intended. But likewise in chemical engineering, changing any parameter, even an apparently non-essential one, can change the output. It can also result in intended as well as unintended by-products and involve more or less energy than originally required.’
After leaving KPMG in 2003, she joined the Slovak Ministry of Finance as director general of the state reporting section, attracted by the chance to use the accounting knowledge she’d gained in the private sector. She arrived at a significant time for the Slovak accounting sector and was involved in a number of key assignments.
But while her position enabled her to apply some of the skills she had used in the corporate sector, there were limitations. ‘Despite positive changes over the years, the Slovak Ministry of Finance, as with every state budgetary organisation, has been facing rigid limits on headcounts and expenses, and bureaucratic administration still involves signatures and stamps,‘ she says.
Strategic audit reforms
There was plenty to be done when she joined the ministry. ‘At that time, Slovakia was introducing a series of structural strategic reforms, including public finance management reform and a move from cash-based to accrual-based public sector accounting and reporting,’ she explains.
She and her team introduced accounting and reporting standards that were based on International Public Sector Accounting Standards, established a new consolidation system, trained thousands of public sector accountants in the new accrual-based methodology, and prepared the first set of whole of government accounts.
The project officially wound up in 2011, becoming an integral part of the ministry’s day-to-day work, while Kaszasová remains the ministry’s most senior civil servant. ‘Besides state reporting, my remit includes the development and maintenance of information systems for public finance management, loans from international financial institutions, state guarantees and bilateral investment treaties and disputes,’ she says. She adds that the ‘quality, timeliness, accuracy, credibility and comprehensibility of financial information increased when prepared in line with internationally accepted accounting standards’.
EU audit reform
As vice-chairwoman of the board of the Slovak Audit Oversight Authority, Kaszasová has been following the impact of audit reform in the EU. She is particularly interested in EU Regulation 537/2014 and Directive 2014/56. They introduce new rules for audit services, such as more detailed and informative auditors’ reports, mandatory rotation of auditors for public interest entities, and prohibition of certain non-audit services. ‘All of these are intended to raise quality standards in audit services, as well as increasing transparency,’ she says. ‘EU member states have two years to incorporate the rules of the directive into national laws.’
The ministry has been working on drafts of necessary amendments to Slovak audit law and discussing new rules with the Slovak Chamber of Auditors and the Slovak Audit Oversight Authority. ‘It is very important for each auditor and auditing company to be closely informed about these new requirements, and to assess the implications of these changes for their future work,’ says Kaszasová.
She says that not just in Slovakia but everywhere ‘quality and compliance with internationally accepted standards is a must. Otherwise, a lack of reliance on audit services could undermine the profession’s credit and even result in the downfall of the profession. This in turn would undermine the confidence of investors in the economy.’
As well as her responsibilities in Slovakia, Kaszasová has been increasingly busy as a board member of several organisations, including international institutions.
In 2005, the Slovak Ministry of Finance appointed her to the board of directors of the European Investment Bank (EIB), the EU’s bank, which provides finance and expertise for sustainable investment projects. ‘I am currently the second longest serving board member, and this continuity has given me a uniquely detailed overview of the bank’s activities and performance in both good (pre-crisis) and bad (crisis and post-crisis) times,’ she says. Eight years later, the EIB appointed her to the board of the European Investment Fund (EIF), which provides SME risk finance.
In 2012 she also became a member of the board of auditors of the European Stability Mechanism (ESM), which is a permanent crisis resolution mechanism for the eurozone. ‘My appointment to the ESM’s Board of Auditors was based on my qualification, not on the nationality quota,’ she says. The Board of Auditors, an independent body made up of five members appointed by the ESM’s governors, carries out independent audits, inspects the ESM’s accounts and audits regularity, compliance, performance and risk management.
Although the EIB, EIF and ESM hold board meetings on working days in Luxembourg, Kaszasová usually has no time for preparation during office hours in Bratislava. ‘I spend evenings and weekends reading and assessing the board papers. However, those positions are very interesting and challenging. Such highly professional cooperation is beneficial for all stakeholders – for the institutions and the Slovak Ministry of Finance as well as for me.’
As well as balancing various work roles, the work-life issue is a constant challenge. Kaszasová spent eight years at KPMG and left before being promoted to partner so she could spend time looking after her daughter. ‘I was unable to combine a very demanding audit career and raising my daughter. It took me several years to understand that there is a need to balance my private and professional life, and that I cannot be perfect in both.’
Kaszasová feels it is easier for women to balance life and work in Slovakia now, but warns: ‘Even though women now do have real career opportunities, it is not always easy to become a leader. A change in the overall culture of accepting a woman’s right to a career is still needed, and the existence of other means of supporting women in business and work – eg flexible working time and nurseries – is not guaranteed nor fully available.’
ACCA Achievement Award
Last year Kaszasová received an ACCA Achievement Award after being nominated by her local ACCA office for her involvement in ACCA and the work she carries out locally and internationally. She has won recognition for several key projects such as the World Bank’s accounting and auditing reform, and the transition of public sector accounting and reporting in Slovakia from a cash to an accruals basis. ‘There has been no direct impact on my career so far, but I hope that it will be a positive factor if I return to the accounting and auditing profession,’ she says.
In the next five to 10 years, she feels that her role at the ministry will be over. She would like to work at an international finance institution, perhaps in the regulatory/oversight sector, or back in the private sector ‘where I could use the experience I gained in finance and corporate governance during my career in both advisory services and in the public sector’.
David Creighton, journalist.