One Set of International Standards Important for Economic Growth: World Accountancy Leaders
CPA Letter | January 1, 2008
Convergence to a single set of international standards is a key to economic development, according to a survey of worldwide leaders of the accounting profession conducted by the International Federation of Accountants (IFAC). AICPA Chairman of the Board Randy Fletchall and AICPA President and CEO Barry Melancon were among the respondents.
Of the 143 leaders from 91 countries who responded, a large majority (90%) indicated convergence to international financial reporting standards was “very important” or “important” for economic growth in their countries. Nine percent said it was “somewhat important,” and only 1% said it was not important.
“The sentiments expressed in the IFAC survey clearly show convergence is not only desirable, but essential in an economy that is quickly dissolving borders,” Melancon said.
The majority of respondents (80%) expressed optimism about the prospects for economic growth and development in their countries in 2008. Major factors in economic expansion next year are likely to be the growth of small and medium entities and access to financial capital.
Most respondents cited staffing shortages as an issue for the profession, though in varying degrees of severity according to geography. Respondents in North America and the Asia-Pacific region reported significant challenges filling accountancy jobs, while those in Europe said the challenge was less extreme. In fact, the North American respondents ranked recruitment and retention as their prime issue for the coming year.
“In the next 15 years, 75% of the AICPA’s membership will reach or approach retirement age,” said Melancon. “Filling the pipeline of new accountants will be a strategic priority of the U.S. profession for years to come.”
When asked about issues facing accountants in business, respondents ranked application of new accounting standards as number one, followed by adopting good practices in internal controls and risk management. Other issues cited were the increasing complexity of financial reporting and quality of corporate governance.
For a summary of the survey findings, along with responses to the full survey, visit www.ifac.org/globalsurvey. IFAC conducted the survey in connection with its 30th anniversary celebration, which culminated with World Accountancy Week, December 2 – 8, 2007.
Melancon Discusses Need for New Financial Reporting Model at IFAC Council
AICPA President and CEO Barry Melancon recently addressed the need for a new financial reporting model at a meeting of the IFAC’s Council in November 2007. He noted that control is shifting from providers to users and that today’s financial reporting world requires four critical elements: heightened communications between investors and a company; more and varied information than is currently available; giving investors the answers they want; and reduced complexity and heightened transparency. Melancon described the Institute’s Enhanced Business Reporting (www.ebr360.org) and eXtensible Business Reporting Language (www.xbrl-us.org) efforts as what financial information consumers need in a fast-moving global marketplace.
