PracticeConsulting…we needed a Forum of firms

...we needed a Forum of firms

The establishment of the IFAC Forum of Firms is, I believe, a major development in the international profession with significant potential to facilitate the convergence of practices.

However, it is important to recognise that this is only one part of a three part plan. In isolation the forum will be positive, but it is only if matters are tackled comprehensively that we will see its potential realised.

The major reason for variation in practices across the world continues to be the existence of national rules and regulations which require those variations.

The International Forum on Accountancy Development, in which IFAC and the large accounting firms meet with representatives of a wide range of international financial institutions, regulators, standard setters and preparers and users of accounts, has a key role in encouraging countries to analyse the differences between national practices and international standards in accounting, auditing, corporate governance and regulation and in developing and implementing country action plans to eliminate those differences.

The profession is therefore looking to the other participants in IFAD, such as the securities regulators and the development banks, to work with it to push change at country level.

The third area in which action is necessary is within, and by, the firms themselves.

One example is the decision to include references to the nationality of accounting and auditing standards in the audit reports on accounts used internationally.

Actions specific to individual firms are also being taken.

The restructuring of IASC and the European Union decision to require the use of international accounting standards in the consolidated accounts of listed companies from 2005 are positive developments moving towards convergence in accounting and reporting.

I believe the establishment of the Forum of Firms combined with the actions of the participants in IFAD and the actions of the firms themselves can have the same positive impact in the auditing area.

No-one is going ahead believing that improvements will be put in place overnight but there is a clear recognition that the globalisation of the marketplace requires change and that with the active involvement of all the relevant parties that change is now possible.

  • Karl Ernst Knorr is chairman of the Forum of Firms.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer