RESTRICTED  
  
WT/L/1113  
14 July 2021  
(21-5529) Page: 1/10 
General Council  
27-28 July 2021  Original:  French  
 
  
WTO PENSION PLAN  
REPORT OF THE INDEPENDENT EXTERNAL AUDITOR  
ON THE AUDIT OF THE FINANCIAL STATEMENTS OF THE  
WORLD TRADE ORGANIZATION PENSION PLAN  
FOR THE YEAR ENDED  31 D ECEMBE R 2020  
The Report of the Independent External Auditor on the Audit of the Financial Statements of the 
WTO Pension Plan for 20 20 is attache d. 
 
_______________  
 
 
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AUDIT EXTERNE DU  
REGIME  DES PENSIONS DE 
L’ORGANISATION MONDIALE 
DU COMMERCE  
 
RAPPORT D’AUDIT  
 
ÉTATS FINANCIERS DU REGIME DES 
PENSIONS DE L’ORGANISATION 
MONDIALE DU COMMERCE  
POUR L’EXERCICE CLOS LE  
RÉFÉRENCE COUR DES COMPTES: OMC 2021 -2 
 
EXTERNAL AUDIT OF  
THE WORLD TRADE 
ORGANI ZATION’S PENSION PLAN  
 
AUDIT REPORT  
 
 FINANCIAL STATEMENTS OF THE WORLD TRADE 
ORGANI ZATION’S PENSION PLAN  
FOR THE YEAR ENDED  
31 DECEMBER 2020  
 
 
REFERENCE COUR DES COMP TES: OMC 2021 -2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COURT OF AUDITORS REFERENCE: CoE 2021 -2 
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BLANK PAGE   
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  TABLE OF CONTENTS  
 
I. OBJECTIVES AND SCOPE OF THE AUDIT  ................................ ................................ .. 5 
II. LIST OF RECOMMENDATIONS  ................................ ................................ ..................  6 
III. AUDIT OBSERVATIONS  ................................ ................................ ............................  7 
1. Accounting standard applicable to the presentation of the accounts of the Plan  ..........  7 
2. Other audit observations  ................................ ................................ ...................  9 
IV. ACKNOWLEDGEMENTS  ................................ ................................ ..............................  10 
 
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I. OBJECTIVES AND SCOPE OF THE AUDIT  
1. In accordance with the conditions of our undertaking and our notification letter dated  
12 January  2021, a team of five auditors carried out, from 26 April to 14 May 2021, the final audit 
mission of the financial statements of the World Trade Organi zation (WTO) and its pension plan 
(WTOPP) for the financial year ended 31 December 2020.  
2. The audit of the financial statements took place in accordance with the provisions of the 
Organization' s financial and administrative regulation for the Pension Plan, International Standards 
on Auditing (ISA) and International St andards of Supreme Audit Institutions (ISSAI1) on financial 
auditing.  
3. The financial statements for the year ended 31 December 2020 were sent to the external 
Auditor on 23 April 2021.  
4. Due to the health situation and travel and contact restrictions re lated to the C OVID -19 
pandemic, interim and final audit work of the financial statements could not be carried out at the 
headquarters of the World Trade Organi zation and were therefore carried out exclusively remotely. 
Even though the WTO provided computer  equipment to auditors to perform this remote work in 
accordance with the Organi zation's security rules, these circumstances have nevertheless made it 
more difficult to access the resources (data and justifications) required to document the statements 
under review as well as contacts with the persons responsible for administrative and financial 
services. However, this did not significantly affect the efficiency and scope of the due diligence 
performed or the assurance given by our opinion.  
5. The observatio ns and recommendations were discussed with the relevant managers of the 
WTO and the Pension Plan, who received a provisional report on 4 June 2021. Their comments 
(factual and/or formal) and written responses were, where applicable, fully taken into accoun t in the 
final version of this report.  
6. The external Auditor issued an opinion , on the financial statements of the Pension Plan for 
the year ended 31 December 2020, without reserve and with an observation  relating to the 
limits on the use of financial st atements presented in accordance with a specific accounting 
framework.  
  
 
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  II. LIST OF RECOMMENDATIONS  
7. The recommendations made are assigned a priority level, decided by the external Auditor:  
• Priority 1:  fundamental point requiring special attention of the governing bodies and 
immediate action of the general management,  
 
• Priority 2:  point which must be implemented but the implementation may be delayed 
depending on the circumstances,  
 
• Priority 3 : point of improvement of controls, financial reporting or management, 
brought to the attention of the general management.  
8. The external Auditor formulated a sin gle recommendation in support of his audit of the 
financial statements of WTO 's Pension Plan. This recommendation is assigned "Priority 1 " as it 
involves a fundamental point requiring the special attention of the governing bodies of the WTO and 
the Pension  Plan, and immediate action by the administrative managers of the Plan.  
Domain  Priority  Recommendation  
 1 1. The External Auditor recommends (i ) submitting the 
Pension Plan accounting standard, applied as per use, for a 
formal approval of the Management Board along with the 
approval of the 2020 financial statements ; (ii) also 
submitting the option of adopting an appropriate existing 
accounting standard and, where applicable, deviations to 
this standard justified by the information of stakeholders of 
the Plan for presenting the 2021 accounts to the 
Management Board  
 
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  III. AUDIT OBSERVATIONS  
1. Accounting standard applicable to the presentation of the accounts of the Plan  
8. The Pension Plan of the World Trade Organi zation is not a separate legal entity but a  
component of the WTO.  
9. Article 5(d) of the Plan 's regulation (in its amended version updated as of 26 July 2017) 
provides that its Management Board shall present a report to WTO 's General Council every year 
comprising various elements of information and including (i) an account of the financial transact ions 
carried out during the financial year, (ii) the balance sheet, […] (vi) all decisions taken in relation 
with the Plan’s administration.  
10. The financial statements presented by the Pension Plan and submitted to the 
External  Auditor specifically meet the obligations provided for in this article. According the principles 
and definitions of international audit standards, they constitute special purpose financial statements.  
11. Article 5(e) of the Pension regulation provides that its accounts are audited by the External 
Auditor [of WTO] under the conditions approved by mutual agreement with the Management Board . 
Since no agreement relating to the external audit of the Pension Plan accounts had been signed, its 
accounts were audited in accordance with the internat ional audit standard ISA 800.  
12. The question regarding the accounting framework applicable to the Pension Plan has arisen 
since WTO 's adoption of the international public sector accounting standards (IPSAS2) applicable as 
of the financial year 2017. Article  C1 of the rules of procedure of the Management Board  stipulates 
in fact that "the provisions of chapter XI ( "External audit of accounts ") […] of the Financial regulation 
of the WTO are applicable mutatis mutandis to the audit of the accounts of the Plan". 
13. After the WTO 's Financial Regulation was revised following the adoption of the 
IPSAS  Standard, Chapter XI now concerns financial information and not the external auditing of 
accounts. Article 32 of chapter XI stipulates "The financial statements of the Organi zation are drawn 
up in accordance with the international public sector accounting standards (IPSAS) applicable to the 
accounting year concerned. Any deviation from the use of the prescribed standards must be set out 
in the notes to the financial statements " – Since reference to chapter XI is maintained in Article C1 
mentioned above, there is an ambiguity in the interpretation of this article.  
14. Since the Rules of Procedure  of the Pension Plan were revised in July 2017, it could be 
assumed that the n ew version of this regulation has taken into account WTO 's adoption of the IPSAS 
standard decided previously, and that it is the mention "external audit " rather than the reference to 
"chapter XI " that must be considered incorrect; in this case, mutatis mut andis, the IPSAS standard 
should, by application of chapter XI of WTO 's Financial Regulation, be adopted by the Pension Plan. 
Since the accounting framework and methods of presenting the accounts of the Plan were never 
clearly mentioned and explicitly asso ciated with the accounts produced, today it is impossible to 
decide on it.  
15. The IPSAS standards did not exists in 1999, when the Pension Plan was created; this justified 
the definition of a sui generis (article 5(d)) framework for presenting the accounts in  the regulation 
of the Plan. The preparation of the special purpose financial statements can always be set in an 
equally specific accounting framework (under the control of the External Auditor in terms of its 
consistency and acceptable nature with respect  to the objectives pursued for the stakeholders ' 
information – ISA 800 §8 and ISA 210 §A5 -A8). But this room for manoeuvre would exist no longer 
if the internal regulatory provisions stated otherwise.  
 
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  16. A clarification of the accounting framework applicable  to the presentation of 
WTO 's Pension Plan accounts as well as a revision of the internal regulation of the Plan to 
lift any ambiguity are therefore required . Pursuant to Article A8 of the Rules of Procedure  of the 
Pension  Plan, "the Management board  is responsible […] for the financial controls and maintenance 
of accounts ". If the Management Board  is responsible for the preparation of the financial reports of 
Article 5(d) and if these reports must include a detailed description of  the accounting principles and 
methods adopted by the Plan, it is important that this clarification is subject of an explicit decision 
of the Management Board . 
17. Assuming that the IPSAS standard is not applicable de jure to the Pension Plan, the 
clarificatio n recommended would benefit from an as close a reconciliation of an existing structured, 
accounting standard as possible, with the sui generis provisions of Article 5(d) of the Rules of 
Procedure continuing to be extremely inaccurate.  
18. As of date, no IPSAS standard specifically deals with Pension Plans (the production of a 
specific IPSAS 26 standard is registered in the working plan of the IPSAS Board3, but would be 
finalized only by end of 2022. However, the Organi zation voluntarily refer to the conceptually proven 
provisions of the IPSAS 3 standard, which calls for "making use of the judgement to develop and 
apply an appropriate accounting method ", and considering "(a) the most recent official positions of 
other acc ounting standards bodies, and (b) the accepted practices of the public or private sector 
[…]", including the positions of the IASB (International Accounting Standards Board), the IFRS 
(International Financial Reporting standards), etc. In such a legal and normative framework, the 
Organi zation shall remain free to adopt deviations for the specific needs of users of the Pension Plan 
account.  
19. To supervise his audit procedures, in accordance with the requirements of the international 
standard ISA 800, the Exter nal Auditor first sought to obtain the description of the accounting 
principles and methods applied to the production of their accounts from the Plan managers. It 
appeared that in fact, these resulted from practices that were partly customary, partly presc ribed in 
scattered documents and for some old ones, the official character of which could not be assured in 
all cases.  
20. Section 15 of the aforementioned standard ISA 700, which continues to apply in the 
formulation of the opinion on the accounts, prescribed  to the External Auditor "for assessing, whether 
the financial statements fell adequately within an accounting framework or describe the one that is 
applied ". Failure to be able to refer to any explicit accounting framework, even if only to direct the 
audit of the accounts and base the formulation of his opinion, the External Auditor would have had 
to resolve to issue a disclaimer on the accounts of the Pension Plan, submitted to him.  
21. The External Auditor is pleased to recognise the spirit of cooperation o f the Plan managers 
and the efforts deployed by their collaborators to bring about a solution to the problem raised. Albeit 
late, a document was prepared comprehensively mentioning and providing details of all, previously 
disseminated accounting principles  and methods, underlying the establishment of the Plan 's financial 
statements. Although this document is not official in nature and was not incorporated in the signed 
and approved financial statements, submitted to the External Auditor, the compliance of t hese 
statements to the principles and methods adopted in previous years could therefore be established, 
at the cost of additional audits.  
22. Despite the formal inadequacy of the aforementioned document, the External Auditor, 
concerned about giving preference to substance over form, ultimately formulated an opinion, without 
reservation on the Pension Plan accounts submitted to him for review.  
 
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  23. However, pursuant to the provisions of the standard ISA 800 §14, this opinion has a formal 
observation (emphasis of matt er) attached to it "warning the users [i.e the beneficiaries of the plan] 
about the fact that these financial statements are prepared in accordance with a specific purpose 
standard and that consequently, it is possible that they cannot be used for any othe r purpose. " 
Recommendation No. 1. The External Auditor recommends (i) submitting the Pension 
Plan accounting standard, applied as per use, for a formal approval of the Management 
Board  along with the approval of the 2020 financial statements, (ii) also submitting the 
option of adopting an appropriate existing accounting standard and, where applicable, 
deviations to this standard justified by the information of stakeholders of the Plan fo r 
presenting the 2021 accounts to the Management Board . 
2. Other audit observations  
24. The External Auditor 's other observations relating to the valuation of net assets and Pension 
commitments and the basic implementation and actuarial assumptions can be found in the audit 
report of WTO’s financial statements to which the reader may refer.  
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  IV. ACKNOWLEDGEMENTS  
25. The external Auditor sincerely thanks all the World Trade Organi zation's Pension Plan teams 
for their availability and the quality of information provided during the audit, given that the 
circumstances caused by the health crisis weighed heavily on the conduct of this mission.  
 
 
End of audit observations.  
 
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