World Bank: Framing the Future of Accountancy

by CFI | December 18, 2014 10:22 am

• The main objective of Accountancy Development for Results (ADR) is to raise awareness among leaders of the accountancy profession of their significant role in advancing the World Bank’s twin goals of eradicating extreme poverty and promoting shared prosperity.
• Accountants and auditors play a central role in building an environment of transparency and trust that allows businesses to flourish, and supports a public sector that is efficient and accountable to its citizens.
• The Governance Global Practice is committed to move forward with the ideas brought forward at the ADR conference aimed at supporting capacity development, and continuing to share and transfer knowledge globally.

On November 10, more than 160 leaders of accountancy profession from over 60 countries gathered in Rome on the occasion of the World Congress of Accountants[1]. The goal of the event was to provide a forum for a forward-looking, solutions-focused discussion among participants, with a view to shaping the World Bank[2]’s engagement with professional accountancy organizations in the years to come.

The second Accountancy Development for Results (ADR) conference—Accountancy: Framing the Future[3]—was held in cooperation with the International Federation of Accountants (IFAC). This event represented an important element of the World Bank’s engagement with the global accountancy profession in support of partner countries.

“Acting at the global level is at the heart of the vision of the World Bank today,” said Samia Msadek, director in the World Bank Governance Global Practice Group[4].

Over the course of the day, participants focused on four themes of global relevance.

Public oversight plays an important role in fostering public trust in the accounting profession. However, implementing an effective public oversight system is challenging and requires resources and expertise. The experiences of other countries can offer valuable guidance, help avoid pitfalls, and provide solutions for capacity enhancement. The conference discussed several examples of strategic partnerships that are being successfully developed, such as in Dubai.

“Acting at the global level is at the heart of the vision of the World Bank today.”

– Samia Msadek, Director in the World Bank Governance Global Practice Group

There is sometimes a mismatch between the skills businesses and the public sector require, and those that accounting professionals are able to offer. Several suggestions were discussed for addressing the skills gap, including the development of qualification frameworks, strengthening regional organizations, and the professionalization of accounting technicians, an approach being taken in New Zealand and South Africa.

The range of information technology options for accountants is vast and rich. However, the array of options can be confusing, expensive and even threatening. Professional Accounting Organizations (PAOs) have been instrumental in assisting members in navigating IT options for adapting their practices, increasing the value of their services, and gaining efficiency. One area in which PAOs have added significant value is in using their bargaining power to work with IT companies to develop and adapt software to the needs of their members, particularly small accounting firms. Some smaller PAOs have partnered to achieve even greater economies of scale, such as in Latvia and Estonia. Taking full advantage of the opportunities IT offers for education and training will be vital going forward. In this regard, the World Bank has pioneered the development of educational software; for example software is being developed to teach International Standards on Auditing (ISA) through simulated audits, and will be piloted in Poland beginning in 2015.

According to Warren Allen, IFAC President, “public sector financial management reform is the ultimate public interest issue for the accountancy profession.” Citing examples of recent global civil unrest he said “the public, and particularly the younger generation, have had enough of the inappropriate way in which many public sector entities are run.” Modernizing public financial management (PFM) is essential to achieving the World Bank’s twin goals of eradicating extreme poverty and promoting shared prosperity, and accountants play a vital role in this process.

Overall, Accountancy: Framing the Future, was an opportunity for the World Bank to receive valuable feedback from the profession in our partner countries. World Bank is committed to move forward with the ideas discussed in Rome aimed at supporting capacity development, and continuing to share and transfer knowledge globally, particularly with regard to:

• Facilitating engagement among partner countries, including through technical assistance and peer exchange, in order to build and enhance sustainable systems of quality assurance for the audit profession.
• Strengthening the professional skills of accounting practitioners at all levels.
• Driving reform: while regulation has had a significant role in the profession’s evolution, advances in technology should be explored and disseminated.
• Developing practical tools to support PAOs: the ongoing development and broad availability of relevant software is essential, and can serve as an equalizer among firms and countries.
• Promoting information that is clear and simple in government financial reports: while transparency is essential, citizens must also be able to understand and derive meaningful information from these reports.

Source URL: https://cfi.co/europe/2014/12/world-bank-framing-the-future-of-accountancy/

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