| In a letter submitted this week, the International Federation of Accountants (IFAC) urged the G-20 Leaders at their June 2012 meeting in Mexico to focus on global solutions to global issues, to create sustainability and growth.
The letter, which is a follow-up to previous submissions in 2009, 2010, 2011, and earlier in 2012, recommends that the G-20 take action directed toward the priorities of the current Mexican Presidency to: achieve economic stabilization and structural reforms as foundations for growth and employment; strengthen the financial system and foster financial inclusion to promote economic growth; improve the international financial architecture in an interconnected world; and promote sustainable development, green growth, and the fight against climate change. The recommendations include:
- The adoption and implementation, across all jurisdictions, of:
- International Financial Reporting Standards (IFRS);
- International Standards on Auditing (ISAs); and
- Auditor independence requirements set out in the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (IESBA).
- That the G-20 works to support strengthened resourcing and governance arrangements of international regulatory organizations (including standard setters) that have clearly defined expectations and responsibilities. In this regard, IFAC reiterates its support for shared private sector/public sector arrangements for international standard setting for financial reporting, auditing and assurance, ethics, and accounting education.
- That the G-20 supports initiatives leading to greater transparency in the management of public resources, including improving financial reporting practices by governments, developing an international framework of governance for public sector organizations, combating money laundering and terrorist financing, and ensuring that taxation obligations are properly assessed and collected according to the law.
- That the G-20 formally signals its support for the work being undertaken by the International Integrated Reporting Council (IIRC) with respect to developing a framework for integrated reporting. The IIRC, in which IFAC participates, is an important initiative and represents a collaboration among a broad cross-section of corporate, investment, accounting, securities, regulatory, and academic leaders.
- That governments and regulators adhere to principles of high-quality regulation, especially economic impact assessment, in implementing evidence-based regulatory reform. In particular, they should recognize that regulatory reforms may affect parts of the economy differently; for example, changes targeting large and complex organizations may have unintended consequences when applied to small- and medium-sized entities.
- That G-20 nations support initiatives aimed at strengthening the accountancy profession in developing and emerging countries. In fulfilling its mission, IFAC contributes to the development of strong professional accountancy organizations and high-quality practices by professional accountants in many ways, including through its relationships with the donor community.
“Today’s global issues require global solutions, and the G-20 is uniquely positioned to support global sustainability and growth,” said IFAC Chief Executive Officer Ian Ball. “The current problems being confronted by the global community require enhanced management of public resources, improved non-financial reporting, and more sustainable organizations. The accountancy profession is well-placed to assist in finding and implementing these solutions.”
The letter to the G-20 with the full recommendations is posted on the IFAC website here.