Johannesburg, Thursday, 30 July 2009 – Governments and regulators urgently need to step up initiatives to promote convergence to global accountancy and auditing standards.

This was among the conclusions reached by more than 60 leaders of the accountancy profession who attended the International Federation of Accountants’ (IFAC) G20 Accountancy Summit in London last week.

The summit, at which the South African Institute of Chartered Accountants (SAICA) was represented by Ewald Müller, SAICA’s senior executive: standards, aimed to achieve consensus by the profession on recommendations to be made to the G20 leaders prior to their meeting in September on financial crisis issues.

According to IFAC, participants unanimously agreed that the public interest would best be served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public interest entities.

“It is critical that national standard-setting bodies establish roadmaps to move toward adoption of International Financial Reporting Standards and International Standards on Auditing,” emphasised Robert Bunting, IFAC’s President.

The group stressed the importance of having balanced views in the standard-setting process and ensuring that there was no undue influence from any one stakeholder group. They pointed to the need for the International Accounting Standards Board (IASB) to have a robust governance structure to ensure its effectiveness and independence.

In addition, summit participants called upon governments to follow the same high standards of financial reporting as their private sector counterparts and to adopt International Public Sector Accounting Standards.

“The group expressed strong concerns about the liabilities and contingencies being assumed by governments in many countries as a result of the financial crisis,” explained IFAC Chief Executive Officer Ian Ball. “IFAC will continue to emphasise to the G20 the need for governments to provide clear and transparent reporting to their taxpayers and to capital markets.”

World Bank Chief Financial Management Officer Tony Hegarty highlighted the urgent need to develop and strengthen the profession in developing and emerging economies as a key step in achieving financial stability. He announced that the World Bank and IFAC would work together to develop a new initiative to deepen cooperation in this area.

Summit participants supported this initiative and recommended that G20 governments should partner with the World Bank and IFAC to establish a framework for building sustainable capacity for the accountancy profession.

Other key recommendations group included:

* The needs of small and medium enterprises (SMEs) should be considered in the development of standards, as well as in any re-regulation;
* The G20 should continue to prioritise corporate governance; and
* There is a need for a more robust financial reporting model that includes reporting on sustainability and environmental issues.

These and other recommendations from the summit participants, who represented accountancy organisations in 17 of the G20 countries, will be included in a communiqué sent to the G20 within the next fortnight.

Müller says, “SAICA is delighted with the outcomes arising from the summit and wholeheartedly support the endorsement of global adoption of principle-based standards. South Africa’s input on corporate governance and differential reporting standards were two areas that elicited positive interest from the delegates at the summit.”