As president of the International Federation of Accountants, Graham Ward has set his sights not just on a better profession, but, even more ambitiously, on a better world.He comes into the job at a juncture of great potential, a moment in which IFAC has a multifarious set of boards, committees and programs and a great deal for them to do in a world of shaken confidence.
Ward's challenge: to harness them together and put them to work in a world that needs it.
"IFAC is an organization acting in the public interest to generate economic growth and stability worldwide," Ward said from his office in the United Kingdom. "My intention in the next year is to ensure that all IFAC activities - including standard-setting, support for professional accountants in business, small and medium enterprises and practices, and developing nations, as well as our new compliance initiatives - remain focused on this core objective, and that we will make real and measurable progress."
Currently a senior partner within the Global Energy and Utilities Group at PricewaterhouseCoopers in the U.K., Ward will lead the organization for a two-year term. Juan José Fermín del Valle of Argentina will serve as deputy president for the same term.
Ward has already shown strong interest in helping the accounting profession in developing nations and promoting accountability in their governments. In his inaugural address to the association, he affirmed his intention to help make the voice of developing economies more audible within the organization.
"An important IFAC objective is to contribute to the development of strong economies which will assist nations in improving the standard of living and creating better environments for their citizens," he said in his keynote. "Development is about transforming societies, improving the lives of the poor and enabling everyone to have a chance at success and access to health care and to education. We must work together, helping nations, especially developing nations, to help themselves."
IFAC has deployed a Developing Nations Permanent Task Force that is charged with identifying the issues of these countries and determining how the profession can support them. As the problems are identified, the association will develop a tool kit of advice, best practice examples, and directions toward solutions. The association will work not only with nations, but also with development agencies.
IFAC's International Auditing and Assurance Standards Board has been developing international standards for years, helping professionals and governments in nations that have been unable to construct complete standards of their own. As the board continues to issue International Standards of Auditing, it plans to work toward converging ISA with national standards. The major challenges, according to an independent report commissioned by the association, are understandability, clarity and translatability as the standards are applied to the world's disparate nations.
The goal of convergence
Pursuant to the goal of convergence, the federation and its IAASB group have been working with the Public Company Accounting Oversight Board and its Auditing Standards Board on a suite of standards on risk assessment.
Progress, Ward claimed, has been palpable. "We are making progress on convergence," he said. "ISAs are used as the basis for national auditing standards in more than 70 countries. For example, the U.K. Auditing Practices Board has adopted standards, which bring ISA into effect in 2005. The current draft of the new 8th Directive, which deals with auditing throughout the [European Union], requires use of ISA in all audits. In addition, the European Commission is currently considering a process and timetable for endorsement of ISAs."
Ward also wants to push the further development, convergence and use of International Public Sector Accounting Standards. IPSAS enhance governmental accountability, financial management and transparency. Given the size of the public sector internationally, Ward said that poor financial management imposes a huge economic cost to the world's economy, so the development and promotion of these standards is especially important.
"We are seeing progress," Ward claimed. "The European Commission has acknowledged that it needs to improve its accounting, and has announced that it will adopt accrual accounting and IPSAS by the end of 2005. In addition, the Organization for Economic Cooperation and Development, NATO and the United Nations are in the process of implementing IPSAS, and a range of governments are using or proposing to use IPSAS either as the basis of their accounting standards or as a reference point in developing standards on specific issues."
A new oversight board
One of Ward's most significant jobs will be to form a new Public Interest Oversight Board. It will be composed of "very senior people" from a variety of nations and backgrounds. Their objective will be to ensure that the standards of IFAC's board and committees are responsive to the public interest. The PIOB will oversee IFAC standard-setting activities in audit performance, independence, ethical standards for auditors, audit quality control and assurance, and education. It will also oversee IFAC's Member Body Compliance Program.
It's a lot to accomplish in a very short term of office, but Ward doesn't seem interested in looking at only the upper half of the world.
"Two years from now, I see an international profession that is strong, well respected for its role in standing up for the public interest, and better able to contribute to sound and stable economies, especially in developing nations," Ward said. "With more reliable standards that are being more efficiently and successfully implemented, IFAC will be able to contribute to a better world. We will have a better investment climate as a result of increased trust in the profession and standard-setting processes. In the public sector, we will see improved transparency and accountability of governments. All this adds up to greater prosperity as we see global financial systems share a common foundation - a commitment by all the players in that system to integrity."
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