HomeBusiness DigestAccountants agree to tighten rules

Accountants agree to tighten rules

Own Correspondent

REPRESENTATIVES of accountancy bodies from around the world agreed in London last week that the international accountancy profession should strengthen accountancy in developing nations and

clarify the profession’s responsibilities.

They also agreed that the profession should address issues of responsibility in financial reporting, clarify the role of accountants in corporate governance, provide support and guidance for professional accountants in business and focus on supporting small and medium enterprises and accounting firms.

The International Federation of Accountants (IFAC) convened the meeting with chief executives of 30 of its member-bodies and regional accountancy organisations. Representatives of the World Bank and the United Nations Conference on Trade and Development (Unctad) also attended the meeting.

IFAC is the global organisation for the accounting profession. It represents 163 accountancy organisations worldwide that together have more than 2,5 million accountants working in public practice, education, government service and industry and commerce.

The Institute of Chartered Accountants of Zimbabwe (ICAZ) is among the accounting organisations that belong to IFAC.

A statement issued by IFAC said the meeting had discussed a global agenda for enhancing the accountancy profession’s contribution to economic growth and development.

Institute of Chartered Accountants of Zimbabwe chief executive Tony Antoniades said that ICAZ supported the development of such an agenda, although it had not participated in last week’s meeting.

“We fully support the recommendations made at this meeting, not only as a member of IFAC but because a global agenda of enhancing the accountancy profession’s contributions to economic growth and development fits in well with our own national commitment, as ICAZ, to contributing to the economic growth and development of our country, Zimbabwe,” he said.

“As a member of the Eastern Central and Southern African Federation of Accountants, we are also committed to enhancing the profession’s contribution to economic growth and development within the region.”

The IFAC statement quoted IFAC president Graham Ward as emphasising the unique role the accountancy profession could play in building stronger economies.

“The international accountancy profession has a unique, critical and practical role to play in building stronger and more stable economies around the globe,” he said.

“Our discussions focused on how IFAC can best leverage its resources with member bodies and regional accountancy organisations and how we can partner with outside agencies to make real and measurable progress in this area.”

The meeting unanimously agreed that there was need to support more rapid development of narrative reporting to achieve greater transparency and integrity in corporate reporting.

It also agreed that an international forum to address audit quality should be established with investors, regulators and others.

Participants agreed that there was need to reinforce the role of professional accountants with respect to corporate governance, building on the work of the Organisation for Economic Cooperation and Development (OECD) and the Task Force on Rebuilding Public Confidence in Financial Reporting.

The taskforce on rebuilding public confidence in financial reporting was commissioned by IFAC to conduct an international study on the causes of loss of credibility in financial reporting and recommend courses of action to restore this credibility.

The taskforce, chaired by former Bank of Canada governor John Crow, issued its final report in August 2003. The report included recommendations on principles of best practices in the areas of financial reporting, corporate governance, corporate disclosure and auditor performance.

There was also agreement at last week’s meeting in London on the need to clarify, communicate and promote the roles of professional accountants in business and provide these accountants with practical guidance.

Participants agreed too that there should be a long-term commitment to the development of the profession, focusing on the education of professional accountants, promotion of international standards and the development of financial and management skills, all of which they considered necessary for a high quality profession that can effectively serve the public interest and meet investor needs.

IFAC received support during the meeting for several initiatives that are already underway.

These include an international consultative conference, to be held next month (March), designed to better identify the needs of small and medium enterprises and practices and the needs of developing nations.

Implementation of IFAC’s newMember Body Compliance Pro-gramme, which encourages convergence of and adherence to high quality professional standards by national accountancy institutes, also received support, as did efforts to clarify the language of international standards to facilitate convergence.

The roles in international standard-setting processes of IFAC’s Developing Nations Permanent Task Force and Small and Medium Practices Permanent Task Force were supported too.

“Achieving convergence to international standards is,” Ward said, “one of IFAC’s most fundamental goals and is central to our mission of protecting the public interest. A lack of convergence creates confusion, encourages errors and facilitates fraud.”

Member bodies and regional accountancy organisations indicated their commitment to achieving convergence to international standards on accounting and auditing.

They expressed their commitment to supporting developing countries in establishing a profession based on internationally recognised competencies and standards.

The IFAC statement said IFAC is dedicated to serving the public interest by strengthening the worldwide accountancy profession and contributing to the development of strong international economies.

The organisation sets international standards of ethics, auditing and assurance, education and public sector accounting. It issues benchmark guidance and studies to encourage high quality performance by professional accountants in business.

Recent Posts

Stories you will enjoy

Recommended reading

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

NewsDay Zimbabwe will use the information you provide on this form to be in touch with you and to provide updates and marketing.