International Federation of Accountants
April 26, 2009
Transitioning to One World in Accounting Education
Robert Bunting, IFAC President
The Higher Education Accounting Forum
Global Economic Crisis
Demonstrates depth of international interdependencies (i.e., G20 Summit)
Highlights importance of finding international solutions
Underscores need for one set of global standards across the financial system
Reinforces need for high ethical standards and stronger corporate governance
Places greater pressure on public institutions
IFAC and the Financial Crisis
Reemphasizing and restating the urgency of convergence
Expediting development of standards and guidance on key issues, i.e., going concern, fair value, financial instruments, and corporate governance
Providing global resources for implementation and compliance monitoring
Supporting OECD corporate governance principles
Speaking with a global voice to international regulators, standard setters, and others
IFAC addresses the crisis by:
What IFAC Does
Sets international standards for:
– Auditing
– Ethics
– Accounting Education
– Public Sector Financial Reporting
Supports adoption and implementation of all global standards
Speaks for the global auditing and accounting profession
Liaises with regulators & other standard setters
The IFAC Family
157 members and associates in 122 countries and jurisdictions
2.5 million accountants in all segments of the profession:
– public practice
– education
– government service
– industry and commerce
Regional accountancy bodies
Global Networks of Audit Firms (21)
Globalization
Credentials becoming a global stamp of quality
International marketing by accountancy bodies, like the AICPA
Standards are overwhelmingly global
Accelerating pace at which globalization will impact accounting and auditing in universities
Academic programs
Business offices
Shaping the Accountancy Profession
How IFAC Can Help NACUBO
Vehicle for NACUBO access/influence on international issues
Academic access to standard setting
Provides corporate governance and ethical guidance
Offers sustainability guidance
Facilitates research and information exchange among academics
Addresses risk management, public sector performance, and other relevant issues
Why International Standards Matter
GASB
FASAB
GAO “Yellow Book”
FASB
AICPA ASB
IPSASB
IASB
IAASB
INTOSAI
IPSASB
U.S. International
IFAC Standards
Who uses auditing standards (ISAs)?
Large firms
More than 100 countries
Officially the basis for ASB standards
Where ISAs are indirectly used:
Yellow Book drawn from ISAs to some degree (via INTOSAI)
PCAOB collaboration
IFAC Standards
Who uses IPSASs?
Governments
Not-for-profit entities
International organizations, such as OECD, UN, NATO, and IFAC
The World Bank also supports
International Standards
Financial reporting rules are converging, though slower in the public and non-profit sectors than in the private, public-interest entity arena
Auditing practices increasingly shaped by ISAs in all sectors of the economy
Expansion of college operations across borders necessitates increasing use of global standards
Statutory audits for local authorities
Reporting with IFRS (versions)
Operation Impact
International Standards
Academic Impact – Need to Broaden Curriculum
Teaching only U.S. GAAP handcuffs students to U.S. economy. Must incorporate ISAs IPSASs, and IFRSs in curriculum.
“Green” Challenge for Universities
Meeting the demand for growth, including facilities, materials, energy, etc.
Dealing with rapid and unprecedented rise in energy consumption as a result of technology
Recognizing the complexity of universities, educational institutions need to have a single control center to ensure that university-wide policies and procedures are implemented effectively and consistently
“Green” Solutions
Need ownership and coordination at the top
Need to identify clear green and social goals with stakeholder engagement
Need to identify broader set of measures of performance to include environmental and social issues
Start with relatively simple energy efficiency and waste minimization and better procurement initiatives
IFAC Sustainability Framework offers pointers for accountants and university business officers to sustainably manage their organizations.
What does this all mean?
Up-skilling/recruitment of staff in international accounting and auditing
– Accentuates the serious problem of shortage of accounting PhDs
Need to “internationalize” curricula and textbooks
International Education Standards can help
Means that you are “future-proofing” your students
Academic
What does this all mean?
Financial constraints are increasing
– Endowments and income declining
– Funding under pressure
Need to monitor and desirably influence the development of standards
Need for a single set of high-quality standards (US)
Competitive role in international credentialing?
Operational
The time for
study may be
passing
quickly.
Thinking
globally must
be paired with
acting
globally.
Moving Ahead