The accounting profession is strongly linked to national economic growth and improved living standards and is estimated to contribute $575 billion annually to the global economy, according to a new report.
[IMGCAP(1)]The study, conducted by the Centre for Economics and Business Research on behalf of the International Federation of Accountants, found that regions of the world with a higher share of accountants in total employment have a higher per capita GDP.
The correlation between the share of accountants in total employment and the U.N. Human Development Index was found to be even stronger. The index measures a number of indicators including life expectancy, years of schooling and income.
For the first time, IFAC has definitively linked a strong accountancy profession to improved living standards for citizens. The study, Nexus 2: The Accountancy Profession—A Global Value Add, was presented at the Singapore Accountancy Convention on Wednesday.
“This report highlights the scale of the profession’s importance to the global economy,” said IFAC CEO Fayez Choudhury in a statement. “It confirms a particularly exciting economic opportunity in the rapidly developing Asian and South American regions. And the findings verify the profound importance of IFAC’s mission—and that of the global profession—to help strengthen accountancy capacity in developing countries, where accountants have a significant role to play in strengthening the institutions and architecture that will improve peoples’ lives.”
The researchers calculated the gross value added, or GVA, of the accountancy sector using official datasets, or where data was poorer, by comparing average wages and then computing GVA per capita across the economy.
Members of professional accounting organizations, such as IFAC, along with people who identify their roles as accountancy or accountancy support contributes an estimated $575 billion gross value added annually to the global economy. Of this amount, IFAC professional accountancy organization, or PAO, members contribute 43 percent, according to the study.
Highly developed countries in North America and Europe dominate the GVA, while Asia’s contribution is seen as third highest. There are 640,000 members of IFAC PAOs in Asia—but with an estimated 2.6 million accountants employed in Asia in 2013, a significant opportunity exists to strengthen the profession in a unified voice.
“Professional accountants contribute to better information, reporting, measurement and decision making,” said Choudhury. “When nations have a robust system to track the flow of money in government, within businesses, and between organizations, transparency and accountability are improved, organizations are strengthened, and economies are enhanced.”
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