Auditing Currency Operations under International Standards: Evidence from Uzbekistan's Transition Economy

Abstract

The quality of currency operations is essential for financial stability and international economic integration, but needs to be examined less in transition economies. The aim of this study is to examine the country of rapid foreign exchange liberalisation Uzbekistan in the context of the current practices, institutional structure and the practical challenges of auditing currency transactions. This research is a qualitative case study that examines the legal documents, regulatory reports, expert interviews and secondary audit evidence. The results indicate that there are extensive deviations from local practice regarding the International Standards on Auditing (ISA 315, 330 and 500): disjoined oversight, inadequate coordination between the Central Bank and audit firms, manual or sample-based procedures and often irregularities like misclassifying currency gains, making unauthorised transfers or reporting delays. Some of the problems are related to the conflict between national and international laws, the lack of specialised auditor competence and technological problems. In the light of these findings, the authors propose a four-pillar reform framework: capacity building, legal harmonisation, optimisation of the audit process (data analytics, AI, etc.) and coordination of stakeholders. The study provides empirical evidence and practical conclusions that can be relevant in the context of a Central Asian transition economy, and provide regulators, auditors and policy makers with ideas for action.