12 December - ISAR Experts mark 25th anniversary session

Hundreds of experts from around the world gathered last month in Geneva to participate in the 25th anniversary session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). The meeting featured sessions on IFRS implementation, ESG disclosure, and Financial Stability.

This special anniversary session of ISAR marked a quarter century of work by this unique forum in the United Nations system.

Since its creation by ECOSOC in 1982, ISAR has provided the United Nations´ unique contribution to ongoing global debates on corporate accounting and reporting. For more than two decades this Group of Experts has recognized that transparent and comparable corporate financial and non-financial reporting plays an important role in fostering investor confidence, promoting economic stability and mobilizing domestic and international investment for development.

In the wake of the financial turmoil that began unfolding in 2008, the critical importance of transparent financial reporting systems and corporate governance mechanisms becomes readily apparent.

The 25th session of ISAR covered a number of key topics, including:

• High Level Segment on the unfolding financial turmoil
• IFRS implementation
• Capacity building efforts in developing countries
• Accounting by small and medium-sized enterprises
• Corporate governance disclosure and corporate responsibility reporting

• Documents
• Programme Timetable
• Photo Gallery

High Level Segment

H.E. Wang Jun, Vice-Minister, Ministry of Finance, China and Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD during the High Level Segment

The high level segment of the 25th session provided an important opportunity to reflect on the critical role that accounting and reporting play in the financial stability and economic development of member States.

The discussion could hardly have come at a more appropriate time. The turbulence that hit financial markets in 2008 is a clear indication of the interconnectedness of financial systems around the world, and a strong reminder of the need to provide transparent financial and non-financial reports that can help investors to better assess risks when making investment decisions.

The high level segment featured the following speakers and discussants:

• Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD
• H.E. Wang Jun, Vice-Minister, Ministry of Finance, China
• H.E. Ibrahim Ashmawy, Deputy Minister of Investment, Egypt
• H.E. Ngy Tayi, Under Secretary of State, Ministry of Economy and Finance, Kingdom of Cambodia
• H.E. Kwabena Baah-Duodu, Ambassador, Permanent Representative of Ghana to the UN in Geneva
• Robert Garnett, Board Member, IASB
• Jim Sylph, Executive Director, IFAC

Review of practical implementation issues of International Financial Reporting Standards (IFRS)

The need for a global set of high-quality financial reporting standards has been apparent since the early 1970s. The existence of a global benchmark enables direct comparison of corporate financial reports between jurisdictions. Such high-quality standards enhance investor´s confidence by allowing economic transactions of a similar nature to be treated and reflected in the same manner around the globe.

What was only a vision three decades ago has become a reality in 2005 with over 100 countries adopting the use of international financial reporting standards (IFRS) for preparation of financial statements by enterprises.

The full benefits of such a global benchmark will be realized only when it is implemented around the world in a consistent manner. However, many developing countries lack the accounting infrastructure and professional institutions required to meet the challenges of moving to a common set of global standards - standards that are formulated with developed markets in mind and which have been becoming increasingly sophisticated.

Following a review of various country case studies, UNCTAD prepared a publication synthesising the lessons learned and the practical challenges that arise in the implementation of IFRS.

Capacity Building

The 25th session of ISAR also included a discussion of practical capacity building efforts in developing countries. In this respect the role of ISAR is significant. UNCTAD - alongside development partners - aims to assist developing countries in building the technical capacity and institutions needed to implement international best practices in corporate accounting and reporting. Experts heard about a number of capacity building efforts, including the SME accounting work of Empretec and the corporate transparency efforts of the Egyptian Institute of Directors.

A special Donors Luncheon, sponsored by Ernst & Young of Amsterdam, was also convened on this subject. The event featured high-level participation by the UNCTAD Secretary General, several Vice-Ministers from around the world, as well as representatives of key donor states.

The participants expressed a renewed appreciation for the practical need for accounting and corporate transparency capacity building as a critical facilitating component of economic development.

Accounting by small and medium-sized enterprises

Small enterprises make a large contribution to developing countries, providing jobs and reducing poverty for millions of people around the world. Yet many small enterprises face challenges in formalizing their activities, accessing bank loans and capital markets, and assuring trade partners that they are financially strong enough to be credit worthy. Producing simple, yet high quality financial reports for these enterprises can be a stepping stone for their future growth.

To meet the needs of smaller enterprises, ISAR has developed a single set of guidelines - known as ´Level 3´ guidance for the smallest enterprises. Experts at the 25th session of ISAR welcomed a newly revised and updated version of this guidance.

Corporate governance disclosure and corporate responsibility reporting

Today, investors and other stakeholders increasingly speak of environmental, social and governance issues as a distinct and interrelated area of reporting. For many years, ISAR has been dealing with these critically important non-financial corporate reporting issues.

At the 25th session, experts reviewed the findings of UNCTAD´s latest review of corporate governance disclosure, which examined the reporting practices of 100 large enterprises from 10 large emerging market countries. The Group of Experts also examined the findings of two UNCTAD reports on the subject of corporate responsibility reporting: a review of corporate responsibility reporting among 100 large enterprises from 10 emerging markets, and a more in-depth analysis of the corporate responsibility performance of 40 large enterprises from 10 emerging markets.

Experts at the 25th session also welcomed the announcement of a Memorandum of Understanding between UNCTAD and the Global Reporting Initiative which furthers to the two organizations´ cooperation in the promotion of sustainability reporting.

• 2008 Review of the Implementation Status of Corporate Governance Disclosure
• 2008 Review of the reporting status of corporate responsibility indicators
• 2008 Review of the corporate responsibility performance of large emerging market enterprises

In addition to its substantive sessions, the 25th session of ISAR also featured a number of networking events and a Gala Dinner. These events were made possible by the following donors:

Gala Dinner Donors:

• Association of Chartered Certified Accountants (ACCA)
• Ernst & Young of Amsterdam (E&Y)

Networking Coffee Break Donors:

• KPMG Switzerland (KPMG)
• PricewaterhouseCoopers Switzerland
(PWC)

The UNCTAD secretariat appreciates the support of these donors.