Leaders say profession to focus on reputation in 2008

Fermín del Valle

The first IFAC Global Survey for World Accountancy Week highlights finance professionals’ contribution to the global economy and the need for more accounting talent. By Tim Cooper, editor, email newsletters, CIMA.

Maintaining the accountancy profession’s reputation will be a key focus for professional bodies in 2008, according to a survey.

The International Federation of Accountants published its first annual Global Leadership Survey results in recognition of World Accountancy Week. These highlight issues the profession will address in the coming year, national and regional perspectives on economic growth, and the profession’s role in contributing to that growth.

According to leaders of worldwide accountancy professional bodies, a strong accountancy profession plays an important role in economic development globally and nationally. These leaders will focus on attracting new accounting talent to their ranks, particularly in regions such as sub-Saharan Africa, the Middle East, North Africa, and North America, where the most pressing staff shortages exist.

Investor confidence vital

'Maintaining a strong reputation is critical to attracting and retaining talented accountancy professionals,' said IFAC president Fermín del Valle. 'Investor confidence in the profession is vital for it to be able to contribute to the optimal functioning of capital markets and economic development.'

The survey found that:

• Convergence to a single set of international accounting and international auditing standards is very important to a country’s economic growth and development.
• The limited supply of qualified accounting professionals is having a negative effect on the growth of some national economies.
• Applying new accounting standards is the most important issue faced by professional accountants working in business, followed by adopting good practice in internal control and risk management.
• Auditor liability remains a significant national issue.
• Effectively supporting small and medium entities (SMEs) is an important issue for the global profession and will have an impact on economic development.

The survey also asked about public sector issues. Leaders of accountancy bodies in countries that are not applying International Public Sector Accounting Standards (IPSASs) resoundingly believe that if their governments did adopt these standards, it would increase their countries’ economic growth and development. They also think that applying IPSASs would enhance public sector accountability in their jurisdictions.

Optimistic outlook

'It is important that governments be held to the same high standards as entities in the private sector,' said IFAC chief executive officer Ian Ball. 'Governments that demonstrate a commitment to sound and transparent financial management and financial reporting will build confidence among their citizens that they are effectively managing resources.'

Despite the subprime loan crisis, most leaders expressed optimism for their national economies in 2008. This was attributed to the availability of human capital, the growth of SMEs, and the availability of financial capital. Potential threats to economic growth included a lack of investor confidence in capital markets, corruption, and high energy costs.

Survey participants

143 presidents and chief executives of 115 IFAC member bodies and associates in 91 countries, as well as six regional accountancy bodies, participated in the survey. It was conducted between October and November 2007.

Charles Tilley, chief executive at CIMA also took part. He said: 'This survey offers valuable insight from international leaders who are very involved not only in the daily workings of the accountancy profession in their countries, but also in their respective regional and national economic infrastructures. The results reflect how essential accountants are to a nation’s potential for economic growth and development.'

World Accountancy Week, which was organised as part of IFAC’s 30th anniversary activities, ran from 2 to 8 December 2007. CIMA has supported the initiative (see the press release) and launched its Islamic Finance Certificate, in conjunction with the WAW.

See the IFAC website.

December 2007

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