29th annual ISAR meeting focuses on 'accounting infrastructure'

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05 Nov 2012

The twenty-ninth session of the United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) was held in Geneva on 31 October-2 November 2012. The meeting focused on the institutional, regulatory and human resource requirements necessary for developing countries to fully converge with global accounting and reporting systems and saw the roll out of an 'accounting development toolkit' designed to strengthen accounting infrastructure for achieving high-quality corporate reporting. The meeting also acknowledged that accounting and reporting play an important role in addressing many environmental, social and corporate governance issues and examined current practices in sustainability reporting.

ISAR was established in 1982 and is a forum dedicated to strengthening corporate reporting, especially in developing countries.  It meets annually to build on previous sessions and discuss topical issues.  This year's session saw over 300 attendees representing government authorities, regulators, standard-setters and academia.

The Deputy Secretary-General of UNCTAD, Petko Draganov, opened the meeting by noting that good reporting is a "key foundation of transparent markets and a healthy economy" and depends on "the wider infrastructure that supports, guides and facilitates" it.  The speech went on to comment on global developments: "one of the defining characteristics of the past two decades has been the proliferation of international standards and codes in accounting, auditing, professional training, and on the disclosure of environmental, social and governance information".

In response to the fact that "accounting infrastructure is a complex set of institutions and regulatory requirements",  Mr Draganov outlined the 'accounting development toolkit' as a practical response to the needs of member States.  The toolkit is designed to addresses the full range of accounting and reporting issues in a systematic way, and sets priorities for policy makers in strengthening and further developing their accounting infrastructure.

Nine countries have pilot-tested the toolkit: Brazil, China, Côte d’Ivoire, Croatia, Mexico, South Africa, the Netherlands, Russia and Vietnam, and feedback during the session was largely positive.  Feedback from the pilot programme will be use to further improve the toolkit for use by member states.

Mr Draganov also discussed the important role that accounting and reporting play in addressing many environmental, social and corporate governance issues, noting "[w]hat we measure affects what we do, and if our measurement is flawed, our decisions will be ill informed".  Mr Draganov called on member states and others to support the paragraph 47 of the outcome document from the Rio+20 United Nations Conference on Sustainable Development which encourages companies to integrate sustainability information into their reporting cycle.

Michael Prada, Chairman of the IFRS Foundation Trustees, gave a key note speech at the session, which outlined the importance of global accounting standards, provided a summary of some of the key achievements of the International Accounting Standards Board (IASB), and discussed the process of strengthening the institutional arrangements underpinning the IFRS Foundation.

Mr Prada went on to discuss the regulatory and institutional arrangements around the implementation of IFRS, noting the importance of global consistency in application to avoid "individual flavours" of IFRS but also stating that the "IASB does not have a mandate or the resources to enforce and monitor application of the standards that it creates". To his mind this is a role for governments and regulators in individual jurisdictions.

However, Mr Prada acknowledged his belief that IOSCO can "play a leading role in monitoring the implementation of global accounting standards".  He  believes this role has been enhanced through IOSCO's recent restructure, and discussed the recent moves by the IASB and IOSCO to co-operate more closely, which at a technical level may involve IOSCO's new policy committee on accounting, auditing and financial reporting.

Mr Prada also discussed the Emerging Economies Group (EEG), the objectives and use of the IFRS for SMEs, and the possible adoption of IFRS in the United States where he reiterated his comments that it was "clear from the analysis that there are no insurmountable issues that stand in the way of the US moving to IFRS".

Numerous other speakers from various organisations also participated in the conference.  The agenda, papers and other information from the conference are available on the UNCTAD website.

Click for press release (link to UNCTAD website).

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