ON THE WALL: IS THE GLOBAL ACCOUNTANCY PROFESSION
REALLY MAKING STRIDES?
By: Fermín del Valle
President, International Federation of Accountants
Institute of Chartered Accountants of the Caribbean
26th Annual Conference of Accountants
Port-of-Spain, Trinidad and Tobago – June 26, 2008
Mr. Prime Minister of the Republic of Trinidad and Tobago, Mr. Patrick Manning,
distinguished guests, ladies and gentlemen, dear friends.
It is a pleasure to be here with you for this 26th Annual Conference of Accountants in the
Caribbean.
I would like to thank the President of the Institute of Chartered Accountants of the Caribbean
(ICAC), Angela Lee Loy, and the President of the Institute of Chartered Accountants of
Trinidad and Tobago (ICATT), Sean Ramirez, for the invitation to speak to you today.
Let me start with a question.
Is it worth being an accountant? This is not a minor question to face for those of us who made
this decision a long time ago. But it is even more important for the thousands of students who
are making this decision now, and trying to determine what path they will follow. Of course,
this question is also crucial for the future of our profession, because in order to have a future,
our profession must be attractive to new generations. Hence, it is vital that we communicate
the key role that professional accountants play in society to potential members and the wider
world.
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IFAC sees the accountancy profession and all professional accountants as effective agents for
development in our societies. This places the accountancy profession in its true dimension,
and makes the relevance and sustainability of our profession a matter of public interest.
It is very important that we not lose sight of this dimension when we think of our profession.
It is also important that we do not fall into theoretical abstractions when we speak about
development and poverty reduction. We only need two numbers to understand how real it is:
Today, twelve hundred million people find themselves in extreme poverty, living on less than
one dollar per day, and thirty thousand children die every day from avoidable causes related
to poverty. That is why development and reduction of poverty must be a priority. It is
essential that we do not lose sight of what we are working for and that we know how to
communicate it with conviction.
The fact of the matter is that it is not possible to conceive of any economic activity in the
world today that can be conducted without professional accountants. Even more, there is a
clear relationship between our profession and the common good. Professional accountants
contribute to the efficient allocation and management of resources, both in the public sector
and in the private sector. They also contribute to the proper operation of capital and financial
markets and, through this, to the production of goods and services. Moreover, professional
accountants, through their different specializations, play a key role in many other matters
related to development, such as the efficient functioning of tax systems, insolvency systems,
and corporate social responsibility, among others. Through their diverse roles, professional
accountants are in a position to make a meaningful contribution to economic growth and
development, and to the reduction of poverty both nationally and globally.
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Corruption is the worst enemy of development, and it is an enemy that many of you are also
working to defeat.
When confronted with corruption, the IFAC Code of Ethics requires that we act decisively in
the best interests of the public. We should recognize, however, that the perception in some
minds is that accountants do not do enough to fight corruption. To counter this misperception,
we must never compromise our values. And we must never compromise our character by
even appearing to be associated with a corrupt activity, on any level, in any way.
The profession should foster an environment in which corruption cannot exist. This
leadership role, however, must extend to other elements of government and civil society. The
accountancy profession is but one of many elements that must participate in the fight against
corruption. Nevertheless, if the profession can demonstrate its own commitment, it can very
effectively demand participation by other groups, whether they are other professions,
governments, regulators, or other private sector organizations.
So, is the accountancy profession really making strides? Yes, we are. But, at the end of the
day, we should not forget the final aimed outcomes and the real indicators to measure our
success.
This morning, I would like to speak to you about the strides that we have made, and which
we continue making, in building a strong profession – both nationally and globally – and
where continued alignment, communication and collaboration are needed. Specifically, I will
address:
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
the importance of convergence of international standards and the effective
implementation of those standards; and

the need to provide an answer to the demands of the market in all sectors and all
specializations of the accountancy profession.
Let me begin with convergence.
Convergence is an area that I believe truly exemplifies the significant progress that our
profession has made over the past few years.
IFAC has promoted convergence since the beginning, long before convergence became a
commonly accepted objective. And the truth is that we are not far from achieving this
objective.
IFAC has always thought that convergence to a common set of high quality accounting and
auditing standards was essential to assuring the quality of the profession’s services and to our
continued success in meeting the needs of the marketplace.
I am pleased to report that developments regarding convergence are happening all the time,
and that the pace towards global convergence is accelerating.
Late last year, for example, the United States Securities and Exchange Commission (SEC)
took a significant step towards implementing International Financial Reporting Standards
(IFRSs) by removing the requirement that foreign private issuers that report using IFRSs
reconcile their reports with U.S. GAAP. Furthermore, we cannot rule out the possibility that,
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in a near future, the SEC will allow American companies to choose to use IFRSs instead of
U.S. GAAP.
Many other developed countries, from the European Union to Australia, Canada and New
Zealand, have also undertaken convergence initiatives in recent years.
We are also seeing increasing convergence activities in emerging and fast growing
economies. Last month, IFAC hosted a forum in New York with the so-called “BRIC”
countries – Brazil, Russia, India, and China. At that forum, each of these countries expressed
a strong commitment to supporting global convergence.
Here in the Caribbean region, the need to collaborate across borders and reduce barriers to
trade has long been understood. The economy of this region has benefited from the ease with
which people and investments can cross borders. That is why I am convinced that this region
will be a pioneer in the achievement of total convergence.
Particularly today, I would like to highlight the importance of convergence regarding the
International Standards on Auditing (ISAs).
One of the key areas of focus over the past two years for the International Auditing and
Assurance Standards Board (IAASB), which sets ISAs, has been improving the clarity of its
international standards to make them easier to translate and to implement. The IAASB has
made good progress in the redrafting of ISAs, and it is on target to complete the redrafting of
all 35 ISAs as final standards by the end of 2008. These standards will be effective for
financial periods beginning on or after December 15, 2009.
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I trust that the countries of this region will make their best efforts to adopt the ISAs, revised
and redrafted in accordance with the clarity project, by the recommended date.
Although the decision to adopt the international standards is important, it isn’t enough. It is
necessary to effectively implement the standards that are being adopted. Adoption without
implementation is a job half done.
We at IFAC recognize that implementing a new set of standards presents challenges. The first
one is training.
I know that the ICAC is now in discussions with the Inter-American Development Bank
regarding funding a regional project to support implementation of international standards.
This program’s initial success here in Trinidad and Tobago and in Jamaica is a clear sign that
it should be expanded to encompass the entire region. I wish you much success in this
initiative, which will help to enhance the business environment by further improving the
transparency and reliability of financial reporting in the region.
A special area of focus in supporting implementation is the needs of small and medium
enterprises (SMEs).
To support small and medium accounting practices (SMPs) and others in applying ISAs to
the audit of SMEs, last December IFAC released new implementation guidance entitled
Guide to Using ISAs in the Audit of Small- and Medium-sized Entities. The guide, developed
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by the Canadian Institute of Chartered Accountants on IFAC’s behalf, is an example of
collaboration at its best.
This new guide, which is available free from our website, provides an analysis of all ISAs
issued as of December 31, 2006, and their requirements in the context of an SME audit. In
just the first six months since the guide was issued, more than 11,000 copies were
downloaded from our website, showing the clear interest in and need for such guidance.
IFAC is already planning an update to the guide once the IAASB’s Clarity Project has been
completed to include the newly redrafted ISAs.
Following on the release of the ISA Guide, IFAC’s SMP Committee is currently developing a
Guide to Quality Control for Use by Small and Medium Practices. This guide, which is
planned for release by the end of this year, will provide practical assistance for SMPs to
enhance the quality of assurance engagements and related services in accordance with
international standards on quality control at the firm and engagement levels.
The quality control guide is being developed by our member body, CGA Canada, on IFAC’s
behalf, and it represents a further sign of how collaboration can produce tangible results.
Quality assurance is an important topic for an implementation guide because it goes to the
core of what we do as a profession. I understand that the establishment of an effective quality
assurance review system on a regional basis has been one of the key objectives of the ICAC
and that you are working in cooperation with the ACCA on signing practice monitoring
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agreements with individual institutes. I am sure this will represent a positive impact on the
quality of the services rendered by professionals of the region.
As I said at the beginning, when we talk about the accountancy profession, we have to bear in
mind the breadth of its field of action.
Professional accountants operate in three major sectors: as independent professional
accountants in practice at large professional firms, as independent professional accountants in
small and medium firms or as sole practitioners, and as professional accountants working
within organizations, both in the public and the private sector. In addition, when one speaks
of the practice of a professional accountant, one has to consider a wide range of
specializations: audit, tax consulting, information systems, and insolvency issues, among
others. In all these areas, the key issue is to maintain relevance, meaning that professional
accountants must be able to continually address the demands of the market.
To help support professional accountants in business in delivering quality performance and
value to their organizations, IFAC’s Professional Accountants in Business (PAIB) Committee
has begun developing principles-based international good practice guidance on financial and
management accounting topics.
IFAC is also undertaking a project related to the importance of having professional
accountants be responsible for the preparation of financial information. It is a globally
acknowledged principle that the auditor should be a professional accountant. However, there
are very few jurisdictions where there are clear rules setting out the competency requirements
for those that prepare the information that will later be audited. IFAC believes that it is very
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important that similar education and ethics requirements be required of those who prepare
financial information as those who audit them. Both activities are equally important to
achieving the objective of producing high quality information.
Looking to the future, we can identify two areas that we should work on with similar
decisiveness and commitment. Firstly, we must continue to work on strengthening public
confidence in the profession and in IFAC. Secondly, we must encourage innovation and
flexibility so that our profession can readily respond to the future demands that society will
place on it.
The profession can and must move ahead in new areas in order to build a better future. It
should keep looking to the markets it serves, both within organizations and from public
practice. We should identify and design more efficient ways to deliver our services and we
must generate new services that better respond to the changing demands of the market. We
also need to be prepared to provide relevant services within the new technology environment.
For example, we should take a leadership role in the preparation and assurance of nonfinancial information. Another area in which professional accountants can take a lead role is
the area of corporate social responsibility, which includes environmental sustainability as
well as social economic performance. I firmly believe that sustainability will be increasingly
important to long-term business performance in the future and that professional accountants
will play an even greater role in sustainability and corporate social responsibility,
particularly, in preparing and in auditing reports.
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We should continue to be players, not spectators, in the development of this profession. We
should continue to take the initiative.
As we look toward the future, I believe that the accountancy profession here in the
Caribbean, and globally, will remain strong if we continue to work together to make the most
of our successes and to address the challenges that remain.
It will take all of us – member bodies, accountancy groupings like the ICAC, and IFAC, as
well as government and business leaders – to continue making progress on convergence,
advancing in education, improving quality of the services provided and, what is even more
important, contributing to the development of our nations.
As you participate in this conference over the next days, I hope that you will be enriched by
the discussions and the sharing of ideas and perspectives. I hope that you will take home with
you something meaningful that will help you to contribute to both the organization in which
you work and also the society in which you live.
Thank you very much for your attention.
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