August 1999

INTERNATIONAL FORUM ON ACCOUNTANCY DEVELOPMENT LAUNCHED

Transparent financial reporting in both the public and private sectors, held to high standards by a strong accounting and auditing profession, was the primary topic of discussion at the International Forum on Accountancy Development. The forum was sponsored by the International Federation of Accountants (IFAC) on June 15 in New York City.

"In partnership with the international financial institutions and major development agencies, the accountancy profession proposes to expand its contribution to the development of the global financial architecture through the building of the accounting and auditing capacity of the developing countries and transitional economies," said Frank Harding, IFAC president. "Between them, they have various roles which will enhance the quality of reporting and of accountability leading to increased investment in and improvement to their economics."

Achieving this will require a clear framework of corporate governance and regulation. The profession will seek to harmonize national practice on the basis of globally accepted accounting, auditing, and ethical standards backed by education and training. The forum will also help harness funds and expertise to enhance accounting and auditing capability and resources.

Forum membership included international financial institutions, key international organizations, and important members of the accounting and auditing professions, all of whom have an interest in enhanced transparency through better financial reporting, more accountable control environments, and management of financial risk. The accounting and auditing profession was represented by IFAC, the International Accounting Standards Committee (IASC), IFAC's regional organizations, and representatives of the Big Five international accounting firms.

The international accounting firms presented their vision for the accounting profession, which would apply universally, both in developing and developed countries and in the public and private sectors. Such an undertaking would require a cooperative effort between the profession (including the national audit offices), the international financial institutions and development agencies, governments, regulators, capital providers, and issuers. The following key proposals were put forward by the firms:

  • The use of international accounting standards as the minimum benchmark for raising national accounting standards.
  • The raising of auditing standards and practices to a common, high level using international auditing standards as the benchmark.
  • The use of the IFAC Code of Ethics, notably its position on independence, as the basis for a worldwide code of conduct.
  • The enhancement of education and training of professional accountants.

    The forum set up a small group to develop specific implementation proposals and commissioned task forces to look at the utility of disclosure statements in enhancing transparency and the role of the accounting and auditing profession in the global financial architecture. The forum's next meeting will take place October 21­22 in Paris.

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