Perspective
Sharing Solutions
I recently had the opportunity to attend the 17th World Congress of Accountants in Istanbul, Turkey. Every four years delegates from the world’s professional accounting bodies gather for this major international conference to explore and debate the central ideas and important issues affecting our profession and, in turn, the global economy.
What are the main preoccupations of today’s professional accountants around the world? They follow two key themes: the central concerns of developed economies, and the driving issues for the developing world. They are different, yet profoundly connected.
The central theme affecting the world’s industrialized nations continues to be the drive to enhance the clarity and effectiveness of financial reporting while fostering continuing confidence in capital markets. In a post-Enron world, the questions of greater regulation of capital markets, effective accounting practices, and continued oversight of the profession continue to be a backdrop to more specific technical issues.
The accounting scandals of recent years have left their mark, and, as a result, the profession is forever changed. A subtext to this broad issue is the slow but steady adoption of international financial reporting standards (IFRS) across western economies, and the various standards adaptations required for alignment with IFRS in domestic settings.
On the other side of the coin is a slightly different focus within the world’s emerging economies; the driving themes are building professional capacity, the need to support emerging economic sectors with better financial reporting, and the best way to meet the financial reporting needs of SMEs (small and medium enterprises).
Yet there’s an interesting convergence between these two sets of issues which comes down to this: how can the profession better support macro enterprises while continuing to feed and nourish the essential micro entities as well?
This challenge crosses all boundaries. What assistance can large economies give the smaller ones in the evolution of IFRS? Is there truly a one-size-fits-all solution when it comes to financial reporting standards? How can we share expertise and knowledge across international boundaries? Because ultimately, when smaller economies thrive, so do the large ones.
Yet the issues related to SME needs are not exclusive to smaller economies. Recently, the Association of Chartered Certified Accountants (ACCA) and CGA-Canada collaborated on a Transatlantic Dialogue on Small Business. This innovative research project was reflective of the larger challenges addressed at the World Congress. Our Dialogue project looked at how the SME sectors in the U.K. and Canada responded to the requirements of regulation and stakeholder financial reporting. The results? In both countries there is a problem with over-regulation.
In developed economies is there too much regulation? In smaller economies is there not enough? In both realms there is undoubtedly the need to support large multinational entities and small enterprises, as well as everything in between.
These are challenging times indeed for the accounting profession. Yet I am happy to report that CGA-Canada is there, ready to contribute to the dialogue and to implement practical, effective solutions.
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