World Bank – accounting for the future

Lucinda Kemeny has visited Washington and talked to them about how they are shaping the future of the global economy.

Lucinda Kemeny

Lucinda Kemeny reports from Washington DC

What is the World Bank?
Harnessing the skills of accountants
Accountant at the top – Jules Muis
Accountant at the top – John Hegarty

Lesotho, Southern Africa World bank project in Lesotho and World bank project in India India

What is the World Bank?

The World Bank is the world’s largest source of development assistance, providing nearly $30bn in loans annually to its client countries. It is using its might to become a major player in the accountancy profession.

It is a significant user of financial information, tracking around 2,000 projects as work-in-progress, with an additional 250 new ones coming on board every year. It can also help to disseminate best practice around the world through its project management.

World Bank World Bank headquarters in Washington DC World Bank

The projects arise from the five associations that make up the bank:

International Bank for Reconstruction and Development
International Development Association
International Finance Corporation
Multilateral Investment Guarantee Agency
International Centre for Settlement of Investment Disputes.

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Harnessing the skills of accountants

Under the presidency of James Wolfensohn the bank has become far more proactive in its use of accountants, both inside in order to check financial information, and outside when they liaise with their opposite numbers working for the bank’s clients.

But this process has been largely dependent on the work of vice-president and accountant Jules Muis who has made it his ambition to tighten up the financial controls of the world’s poorest countries.

His most recent recruit, regional financial management adviser for Europe and ex-FEE president John Hegarty will now play a significant role in continuing Muis’ work when he steps down in August 2000.

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Jules Muis

Jules Muis World Bank vice-president Jules Muis took a step into the unknown when a headhunter called him four years ago at Ernst & Young to lure him away from his role as European executive partner and invite him to join the bank.

But he got the job and now leads the fight to put accountancy at the top of the agenda both within the bank and around the world. It is not about what profit can be made or who wins in the petty fights that have threatened to come between the US and Europe over the formation of a global standards setter – this is about fighting poverty with strong financial systems.

That means getting people to talk about corruption and dealing with all the necessary parties to try to establish the poorest economies on a stable footing.

Muis knows very well that he can only achieve so much in a few years, but his track record is impressive. In his time, the bank has upped its numbers of accountants to 125, and they are now involved in regular dialogue with client auditors in recognition that qualified professionals can better understand each other and identify where things need to change.

This has been reinforced by the recommendation that clients should abide by international accounting standards when they account for World Bank loans, and the bank sets its own example by using IAS or US GAAP. He hopes this will also allow a certain amount of osmosis to encourage countries to establish their own systems.

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John Hegarty

World Bank regional financial management adviser for Europe John Hegarty’s August appointment represents yet another milestone in the bank’s support for the accountancy profession, having formally been head of European accountancy body FEE where he spent years cajoling political leaders and practitioners to develop modern practice standards.

His job combines a number of different areas such as assisting the bank in tracking how its money is spent and making sure that it is being used for the purposes for which it was lent in the first place.

He has a team of financial management officers and every time a new project is put forward, they have the job of signing them off while Hegarty acts as a ‘professional mentor’.

As a representative for Europe and Central Asia, he forms part of a matrix management structure where he is part of a team which monitors projects for ‘quality of oversight’, meaning managing issues such as procurement.

But there is constant interaction between his group and others such as financial management and the public sector reform group to ensure that there can be mutual assistance across the disciplines.

It is clear that he has arrived at just the right time in order to ensure that Muis’ good work does not get forgotten, because much like his boss, Hegarty understands the role of international accounting and auditing standards and the support that can be provided by standards setters working together.

His timing is even more astute given that many countries in Central Europe are trying to achieve the criteria necessary for their entry to the European Union.

To read an extended version of this feature, from Accountancy Age, click here.

To find out more about the world bank visit its website at

To find out more about global accounting standards, visit the International Accounting Standards Committee website at

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