IFAC G20 Accountancy Summit issues renewed mandate for ADOPTION OF GLOBAL STANDARDS

IFAC G20 Accountancy Summit issues renewed mandate for ADOPTION OF GLOBAL STANDARDS

(New York/July 24, 2009) – Governments and regulators need to step up initiatives to promote convergence to global accountancy and auditing standards—and they need to do so quickly—according to over 60 leaders of the accountancy profession who attended the International Federation of Accountants’ (IFAC’s) G20 Accountancy Summit on July 23 and 24 in London. The summit was organized to achieve consensus by the profession on a series of recommendations to be made to the G20 leaders prior to their meeting in September on issues related to the financial crisis.

            Participants unanimously agreed that the public interest would best be served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public interest entities.

             “It is critical that national standard-setting bodies establish roadmaps to move toward adoption of International Financial Reporting Standards and International Standards on Auditing,” emphasized Robert Bunting, IFAC President.

            The group stressed the importance of having balanced views in the standard-setting process and ensuring that there is no undue influence from any one stakeholder group. They also emphasized the need for the International Accounting Standards Board to have a robust governance structure that will ensure its effectiveness and independence.

            In addition, summit participants called upon governments to follow the same high standards of financial reporting as their private sector counterparts and to adopt International Public Sector Accounting Standards.

            “The group expressed strong concerns about the liabilities and contingencies being assumed by governments in many countries as a result of the financial crisis,” explained IFAC Chief Executive Officer Ian Ball. “IFAC will continue to emphasize to the G20 the need for governments to provide clear and transparent reporting to their taxpayers and to capital markets.”

             World Bank Chief Financial Management Officer Tony Hegarty addressed the group, highlighting the urgent need to develop and strengthen the profession in developing and emerging economies as a key step in achieving financial stability. He announced that the World Bank and IFAC will work together to develop a new initiative to deepen cooperation in this area. Summit participants supported this initiative and recommended that G20 governments should partner with the World Bank and IFAC to establish a framework for building sustainable capacity for the accountancy profession.

Other key recommendations from the group included the following:

·         The needs of small and medium enterprises (SMEs) should be considered in the development of standards, as well as in any re-regulation. “SMEs are the economic engine of global growth and we need to ensure that they are not faced with any unnecessary or unintended compliance or other burdens,” stated IFAC President Robert Bunting. 

·         The G20 should continue to make strengthening corporate governance a priority. Focus should be placed on examining the role of independent directors, CFOs, and audit committees, as well as improving the linkage of remuneration schemes with performance.

·         There is a need for a more robust financial reporting model that includes, among other things, reporting on sustainability and environmental issues. 

These and other recommendations from the summit participants, who represented accountancy organizations in 17 of the G20 countries (see below), will be included in a communiqué sent to the G20 within the next two weeks.

About IFAC

IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

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IFAC Members Participating in the G20 Accountancy Summit

Argentina          Federación Argentina de Consejos Profesionales de Ciencias Económicas

Australia           CPA Australia

Australia           The Institute of Chartered Accountants in Australia

Australia           National Institute of Accountants in Australia                  

Brazil                Instituto dos Auditores Independentes do Brasil

Canada             The Canadian Institute of Chartered Accountants

Canada             Certified General Accountants' Association of Canada

Canada             CMA Canada

France              Compagnie Nationale des Commissaires aux Comptes

France              Conseil Supérieur de l'Ordre des Experts-Comptables

Germany           Institut der Wirtschaftsprüfer in Deutschland e.V.

Germany           Wirtschaftsprüferkammer

India                 The Institute of Chartered Accountants of India

Indonesia          Indonesian Institute of Accountants

Italy                  Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili

Japan               The Japanese Institute of Certified Public Accountants

Korea               Korean Institute of Certified Public Accountants

Mexico             Instituto Mexicano de Contadores Públicos, A.C. 

Saudi Arabia     Saudi Organization for Certified Public Accountants

South Africa      The South African Institute of Professional Accountants

South Africa      The South African Institute of Chartered Accountants

Turkey               Expert Accountants' Association of Turkey

Turkey               Union of Chambers of Certified Public Accountants of Turkey

UK                    The Association of Chartered Certified Accountants

UK                    The Chartered Institute of Public Finance and Accountancy

UK                    The Institute of Chartered Accountants of Scotland

UK                    The Chartered Institute of Management Accountants

UK                    The Institute of Chartered Accountants in England & Wales

United States    American Institute of Certified Public Accountants

United States    National Association of State Boards of Accountancy