Overview: rising to the occasion

Visitors to the World Congress
of Accountants (WCOA) held in Istanbul last week would have gained some
insight into the complexity and diversity of the
International Federation of Accountants
(IFAC), the organisation responsible for pulling together the event.

The Congress in Turkey marked the official appointment of Argentina’s Fermin
Del Valle as the new IFAC president for the next two years. Del Valle faces
significant challenges.

Not only will he have to lead the 2.5 million IFAC members, he also takes
over at a time when, the post-Enron slump over, the profession is trying to
reshape itself as a force for good in the developing world and elsewhere.

What happened?

One of the clear messages that emerged from WCOA was that the profession
needed to shift from its traditional focus of serving listed companies and
shareholders in the world’s capital markets.

The message for senior IFAC officials and government ministers was that
accountants should play a greater role in the public sector of the developing
world by promoting accountancy’s core tenets of good governance, financial
discipline and transparency.

For an industry that just four years ago was struggling to salvage its own
reputation from the wreckage of Enron and WorldCom, it is a bold step to now
promote itself as the solution to the ills of the third world. Del Valle is
going to be the man responsible for trying to make the bold new vision a
reality.

What’s going to happen?

Del Valle has been a Deloitte partner in Argentina since 1980, so his
professional credentials are well grounded. He was also professor of accounting
and auditing at the University of San Andrés. His nationality and academic
background are likely to colour how he handles the challenges of the developing
world.

IFAC’s members are located in 120 countries around the world. The obstacles
of language and geography are substantial, as it will be even more difficult to
overcome if the profession is to establish itself as a force for change in the
third world.

The gap between the standard and quality of accounting in the first world and
developing nations is vast. At the WCOA conference it was pointed out that,
while countries in Europe had already implemented IFRS, states in Africa hadn’t
even begun to make the transition, and were unsure whether they had the ability
to implement IFRS at all.

Del Valle is going to have to deal with several similar issues within the
profession’s own backyard before he can even begin thinking about grandiose
plans of introducing broader stability and transparency. A challenging term lies
ahead for the new IFAC boss.