LATIN AMERICAN CORPORATE
GOVERNANCE ROUNDTABLE
28 APRIL 2000
DISCLOSURE AND TRANSPARENCY
AN INTERNATIONAL VIEW
Mary Keegan
pwc
WHAT IS CORPORATE
GOVERNANCE ABOUT?
• Accountability
protecting investors’ interests
• Assisting the communication process
• Importance recognised by the market
PricewaterhouseCoopers
ACCOUNTABILITY MEANS…..
• Better governance structures
eg independent directors, Audit Committees
• Better explanations of corporate performance
MDA, annual reports, interim reports
• Better accounting!
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ACCOUNTING HARMONISATION
• A movement towards international “norms” driven by:
markets, cross-border activity, IPOS
technology
peer pressure
• Do local rules disadvantage Latin American companies?
• Need to understand how local practices compare with
international “norms”
PricewaterhouseCoopers
“GAAP 2000” - ACCOUNTING
BENCHMARKING
• 2 primary objectives
useful to have a summary of GAAP differences
how far are we from IAS?
• Why IAS?
the only international framework
high quality, due process
interpretations, translations, practice aids
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“GAAP 2000” - ACCOUNTING
BENCHMARKING
• About 50 countries
• Self-assessment, by country groups
• Methodology
diagnostic questions
limited to 60 “most important” issues
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“GAAP 2000” - ACCOUNTING
BENCHMARKING
The process
• initial country meetings by end-April
• further local discussion
• country summaries only available, by December
• Some interesting early findings…..
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“GAAP 2000” - PRIORITIES FOR
IMPROVEMENT?
• Some differences
business combinations
segment reporting
cash flows
employee benefits
• …..and many exciting projects in the region to improve
reporting
• The profession driving change
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AUDITING STANDARDS
• We can compare local standards with ISAs
• But we need to understand why differences in practice exist
-
environmental/cultural factors
audit’s place in the reporting framework
corporate governance
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INTERNATIONAL FORUM ON
ACCOUNTANCY DEVELOPMENT - THE
“VISION”
• Raising standards worldwide…..
financial reporting
auditing
corporate governance
company law and regulation
• …..has clear benefits (market perception, cost of capital)
• But requires all parties to work together
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