IFAC President: Financial Crisis Demonstrates Need for Common Standards

At a meeting of the International Federation of Accountants’ (IFAC) Board and Council last week in Rome, IFAC President Robert Bunting, a past AICPA chairman, said the global financial crisis has shown the close ties international markets share. He also emphasized the need for a common set of accounting and auditing standards.

“The financial crisis has clearly demonstrated how interconnected global markets are,” Bunting said in a press release. “Convergence to a common set of high-quality accounting and auditing standards is essential to assuring the quality of the profession’s services and is vital to the effective operations of markets and to promoting cross-border trade and investment.”

Leaders of more than 100 accountancy organizations worldwide met in Rome Nov. 11–14 to address the global financial crisis, and convergence to global auditing and ethics standards.

Bunting, an IFAC Board member since 2005, assumed the IFAC presidency Friday for a two-year term ending in November 2010.

“I believe that IFAC has a key role to play in restoring confidence in the markets,” said Bunting. “We must demonstrate that our standard-setting processes are rigorous. And we must continue to promote strong corporate governance and the highest-quality practices by the world’s accountants, whether they work in public practice or in business and industry. Additionally, we need to scrutinize ourselves and look at what we can do better or differently. And lastly, we must be even more engaged with all market participants and actively collaborate with them in identifying and implementing the solutions that can prevent future crises.”            

Bunting also spoke about the importance of meeting the needs of small and medium accounting practices (SMPs) and enterprises (SMEs). “The SMP/SME community did not cause the current financial crisis,” said Bunting. “But they will be very much affected by it. We must do what we can, including ensuring that they are not subject to overly burdensome regulatory requirements, to contribute to their health and effectiveness.”

The IFAC Council approved at the Rome meeting an updated strategic plan for 2009–2012, which increases the focus on the implementation of international standards, on enhancing the relevance and sustainability of the profession, and on communicating more vigorously on regulatory, financial management, financial reporting, corporate governance, and other issues. The updated strategic plan is available here.