"Accountants could make a useful contribution to the proposals for the new financial architecture by suggesting ways and means to improve compliance with international standards", Ms Lynn Mytelka, Director of UNCTAD’s Division on Investment, Technology and Enterprise Development, stated this morning, in an address to accounting experts from over 60 countries . Together with some 15 professional associations in Geneva, the experts are gathered for the annual session (17-19 February) of the UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). ISAR discusses emerging accounting issues and promulgates best practices.
At its current session, ISAR will focus on the development of a global benchmark for national qualifications requirements for professional accountants. This could help make globalization more equitable by setting down fair, transparent, and objective ground rules whereby accountants in developing countries and economies in transition could participate in the global economy.
In her opening address, Ms Mytelka made reference to the pressing need for an overhaul of the existing financial architecture. "Given the predominance of economists in designing the new financial architecture, what will be the role of the accountant? Will the lessons learned regarding the line between financial transparency and financial market stability be lost?", she asked.
Turning to the main topic on the agenda, Ms Mytelka stressed the importance of concluding ISAR’s work on developing a benchmark for the qualification of accountants. She stated that, "As there are calls for international standards on accounting and auditing, which will regulate how the service is provided, so too is it necessary to have global rules for the service providers".
The intergovernmental discussion at UNCTAD is timely. The World Trade Organization (WTO) has just issued draft disciplines on domestic regulation for the accountancy sector. These disciplines contain provisions on the administration of licensing requirements and qualifications requirements and procedures. However, they do not specify or set out in detail the exact technical standards which are to be followed for professional qualifications. Guidelines on professional qualifications would fill this gap.
A "guideline for a global accounting curriculum and other qualification requirements" (TD/B/COM.2/ISAR/5) has, in fact, already been prepared by the UNCTAD secretariat. Its purpose is to establish a benchmark for national qualifications and to assist holders of those qualifications to function in a global economy. The secretariat has also developed a model "Global curriculum for the professional education of professional accountants" (TD/B/COM.2/ISAR/6), which provides the international community with a description of the technical subject areas that a student must master to become a professional accountant.
If accepted, the ISAR guidelines will promote the global harmonization of professional qualification requirements. Such harmonization could eventually close the gaps in national education systems, cut the costs of mutual recognition agreements and thereby increase trans-border trade in accountancy services.
Ms Mytelka drew the attention of meeting participants to UNCTAD X, to be held in Bangkok (Thailand) in February 2000, which will focus on the differing impacts of globalization. UNCTAD must examine how to spread the benefits of globalization, how to facilitate greater access to the global market place, as well as how to deal with future challenges of globalization in the form of increasingly rapid advances in information technology will change the way business is done, she said. Ms Mytelka reminded the experts that many of the solutions to global problems lay within the domain of their collective expertise, she pointed to their indispensable role in increasing financial disclosure rules, better corporate governance and public sector accounting, developing a meaningful definition of corporate social responsibility, and security verification for electronic commerce.
The experts elected as chairperson of their meeting Professor Alicja A Jaruga, Head of the Accountancy Department at the University of Lodz and Higher School of Management in Lodz, Poland. Ms. Jaruga is also head of the Accounting Standards Committee in Poland.
ISAR, established in 1982, is the only intergovernmental working group devoted to accounting and auditing at the corporate level. It is mandated to promote the harmonization of national accounting standards for enterprises. As a result of harmonization, the financial statements of enterprises will contain more reliable, comparable and transparent financial information, necessary for the efficient functioning of the stock markets, banks and investment.
