ADDRESS TO IFAC COUNCIL
By Robert Bunting
International Federation of Accountants
Rome, Italy - November 13, 2008
Congratulations to Fermín del Valle on his successful and productive term as IFAC
President.
He had an eventful term of office and, under his leadership, IFAC accomplished many of
its goals. In fact, he has been so energetic and committed to fulfilling the goals of IFAC
that at times I wondered if he would leave anything for me to do. However, as inevitably
happens, some of his initiatives will pass to me for further pursuit or implementation.
I’m pleased to carry on and complete his good work, including advancing the process for
delivering quality translations of IFAC standards, further examining how to enhance
business reporting needs, and supporting initiatives addressing the needs of professional
accountants in business and small and medium enterprises, to name only a few.
I would also like to express my congratulations to Göran Tidström on his election as
Deputy President. We have already developed a strong working relationship and I look
forward to a close association over the next two years.
People often ask me about my goals as IFAC President. First and foremost, my goals are
the goals laid out in the IFAC strategic plan with a clear focus on our public interest
responsibilities.
For the past two years I have had the privilege of leading the IFAC Planning and Finance
Committee, so I feel that the plan substantially reflects what I consider to be my priorities
as President. You heard those goals laid out yesterday and approved both the strategic
plan and the operating plan that supports it, so I will not repeat any of that material here
today, except to say that the four strategic themes of IFAC will be foremost in my mind
and efforts over the next two years.
Having said that, for every president there have been areas of emphasis where they have
been more involved than in others. This will be true of me as well.
Some of these areas of emphasis arise from my personal background and interests but
others are dictated by circumstances over which we have no direct control. In this latter
category, of course, is the global financial crisis. There can be no question that this global
pandemic and the accountancy profession’s responses to it will occupy much of our time
over the next two years.
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The Financial Crisis
Two years ago when I became Deputy President I did not expect to be leading IFAC in a
time of financial crisis. I hoped that there would be interesting and challenging issues to
address but the ones we face are more challenging than those I was thinking about at that
time.
Today is a time of global uncertainty, and economic instability. Recession seems to be a
certainty in most of the developed economies. The question is not “if” but “how severe
and how prolonged.”
Questions are being raised about how to control the damage in this economic cycle and
how to prevent similar problems in the future. Governments, regulators, standards setters,
market makers, financial institutions, rating agencies, and service providers to name but a
few, are being forced to defend their role in the financial meltdown and offer changes to
prevent any reoccurrence of the current problems.
The accounting and auditing profession and their regulators and standard setters have
been and will continue to be called upon to explain how the crisis came about, what could
have been done to prevent it and what, if any, changes must occur to prevent future
problems. We must not wait to be called upon, we must be pro-active, we must be part of
the process of finding and implementing solutions.
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EU Commission President Jose Manuel Barroso said that in order to restore stability in
the markets, we must not only “inject liquidity,” we must also “inject credibility.” It is in
this latter area where our profession can play a role.
And so my first area of emphasis as IFAC President is to undertake initiatives to help
combat the fear, frustration, and overall lack of confidence in the markets. This is not
something we can do alone; it is an area in which we can and should be among the
leaders in finding solutions and advocating appropriate and considered actions.
At the same time, the economic slowdown and our limited access to resources challenges
us all to conserve resources and deploy them effectively to address the “must do’s” of the
current day while not failing to prepare for the “must do’s” of the coming years.
“A must do” of today and tomorrow is increased activity in IFAC officer outreach to
regulators, governments, investor groups and other stakeholders. It is critical that IFAC
and the global accountancy profession visibly demonstrate that we are part of the global
solution to the credit crisis. This involves thought leadership, problem solving, rigorous
self assessment, collaboration and a willingness to change where change is needed
The rapid expansion of the credit crisis from the US to Europe to Asia and the rest of the
world has demonstrated conclusively just how integrated the world’s financial structures
are. This, I believe, demonstrates the relevance and importance of our strategic themes
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and fortifies our arguments for one set of global standards for auditing, ethics, education
and financial reporting.
In addition to addressing the financial crisis, a second area of special emphasis for me
will be to seek ways to better organize the SMP and SME community within IFAC so
that its voice is heard and duly considered in the standards-setting process and in efforts
to regulate the markets.
The SMP/SME community had very little to do with the current financial crisis, but they
will be very much affected by it. Regulators, governments and standard setters will be
under increased pressure to develop new approaches to developing standards, regulating,
and oversight of the capital markets. For the SMP/SME community these changes could
very well be burdensome and out of proportion to any gains unless their needs and
interests are addressed in the process of change.
The health and effectiveness of the SME market, especially, is critical to the reemergence of economic growth, innovation and employment. This is not an idle claim.
They are leaders in job creation, leaders in innovation as evidenced by patents that
actually result in products and they generate 50% or more of commercial GDP in most
parts of the world.
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Despite the importance of this sector to the world economy in total, it suffers from lack of
a common voice, lack of organization and is often an afterthought in policy and
regulatory decisions.
Some member bodies have taken a lead in addressing SMP/SME issues; we want to
better leverage this work and give SMPs a stronger global voice. I applaud the work of
the SMP Committee, Developing Nations Committee, the Professsional Accountants in
Business Committee, especially how well they leverage their resources to create value,
but we need to think deeper about the overlaps between these committees and the
member bodies and how to work and collaborate more effectively. I will spend time on
this.
A third area of emphasis is focusing on how we can maximize the use of our resources. In
particular, I will spend time on the issue of the IFAC funding model.
We have accomplished amazing things with a staff of 50 paid professionals and the
volunteer efforts of another 200 or so people supported by the firms and member bodies.
We must continue to assess what we can do well and not seek to be all things to all
people.
We must build on our collaborative model in new ways. We must make hard decisions
about existing initiatives and proposed new ones. We must be sure that we have the
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means to achieve our mission and strategic themes, or we must find ways to change our
focus. Failure to achieve what we set out to do is not an option.
I will stay engaged with IFAC’s CEO, Ian Ball, and deputy president Göran Tidström,
the Planning and Finance Committee and the Board in this process.
The times ahead will be eventful and challenging, perhaps even more so than the past two
years which have also been challenging in different ways. I’m eager to take on those
challenges and I believe that IFAC has the essential ingredients in place to succeed both
in our mission and any unplanned events that we encounter along the way.
Those ingredients include: a dedicated and talented group of full time IFAC employees
and management; an energetic and talented group of volunteers supported by the member
bodies and the major firms and member bodies and regional accountancy organizations,
which join us in pursuing common causes; the success to date of the IFAC reforms and
the increased public confidence in IFAC’s standard setting processes; the momentum we
have achieved in convergence to our own standards and have helped achieve towards
IFRS; a compliance program that is globally recognized for its role in advancing
convergence and contributing to quality, and coordinated outreach to the developing
world focused on building strong accountancy organizations.
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I would like to conclude by thanking you for allowing me to serve as President of IFAC
for the next two years. I promise to do my utmost to justify your trust and achieve the
IFAC mission.
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