Technology: A change driver and enabler for financial reporting

In order to keep pace with developing economic realities and to address the needs of a wider stakeholder audience, corporate reporting must adapt to the opportunities and challenges presented by emerging technologies, according to Petr Kriz, President of the Federation of European Accountants (FEE). PAOs also need to respond to changing stakeholders’ needs and help accountants develop new skill sets to remain relevant and continue to add value in the fast-moving economy.

Participants received an update on recently completed International Financial Reporting Standards (IFRS) – IFRS 9 (Financial Instruments), IFRS 15 (Revenue from Contracts with Customers) and IFRS 16 Leases) from Philippe Danjou, Member of the IASB. Mr. Danjou also provided information about the upcoming standards for Insurance Contracts, the Disclosure Initiative, and the IASB’s Conceptual Framework.

The Forum also provided an overview of IFAC’s new Member Compliance Program Strategy for 2016-2018, which reflects a shift away from information gathering and the development of action plans towards more interactive disclosure in the form of ‘dashboard reports’. These reports will indicate the status of adoption of international standards and compliance with Statements of Membership Obligations as well as an overview of the country context.

The accountancy profession: Change or be changed

A panel discussion explored ways in which accountants can contribute to economic growth and in particular, to small and medium-sized enterprises that are generating jobs by helping them to take advantage of changing economic conditions. The panel also highlighted how accountants need to adapt to changes in the services they provide, to evolving demographics, and to the aspirations of young accountants.

In today’s globalized world, there are still many countries with multiple PAOs with overlapping functions, which can sometimes result in duplication of effort. The Canadian professional bodies have demonstrated that, despite many challenges in the area of regulation and cultural differences between PAOs, they succeeded in creating one national professional organization, resulting in economies of scale and a more unified front in presenting the accounting profession to the public it serves. However, Chartered Accountants Ireland also emphasized that competition among PAOs can sometimes spur better service and innovation.

PAOs can face a number of challenges when trying to build a sustainable business model, especially in locating the resources to develop relevant and up-to-date education programs and Continuing Professional Development programs, and acquiring the necessary expertise. In two inspiring examples, participants heard first-hand accounts from the Institute of Singapore Chartered Accountants (ISCA) and Chartered Accountants Ireland. The ISCA started out in the 1960s—just as Singapore became an independent nation--with very few members and limited resources. As the the Singapore economy grew, ISCA evolved into an institute that is well respected on the world stage and serves as a role model for other PAOs in the region. In the case of Ireland – where there is competition among PAOs– Chartered Accountants Ireland managed to establish a world-class program, illustrating the importance of having a long-term vision, listening to the market, adapting to the economy and leveraging its members.

Closing the Forum – the last of the three events related to the Ministerial Conference – Samia Msadek, Practice Director, Governance Global Practice at the World Bank, stressed the importance of economic growth for the profession and urged accountants to be clear about their role and to be open to competition. “We need to prepare the profession for the future. Everybody has a choice: to be the victim or the creator. Let’s choose to be the creator. We can move the world forward with these global accounting standards if we reinvent ourselves as a profession,” she concluded.