Thank you for giving me the privilege of serving as IFAC President and for the confidence you have placed in me. As IFAC President, over the next two years my objective will be to continue working in the same direction, advancing the course set by Past Presidents René Ricol and Graham Ward. It is a course that has enabled us to make significant progress in building public trust in our profession.
However, while I do not believe that we need to change our strategic direction, I would ask all of you here to help me to move farther and faster down the course, to come closer to achieving our ultimate goal: enhancing societies around the world by contributing to their social and economic development.
As Chairman of the Planning and Finance Committee, I have had the opportunity to work very closely and directly in the elaboration of IFAC’s strategic plan. I believe we have a good plan – a plan that is both relevant and achievable. We have to continue building upon it and designing the strategies that will allow us to meet the expectations of our constituencies and those of society in general with respect to the contribution our profession can make to the public good.
The critical thing now is to execute this strategy. The objectives are there for us to reach, and I am confident that together we are going to reach them and even supersede them.
I love this institution that I have had the chance to be a part of and contribute to over the last 9 years. I had the privilege to collaborate not only with René and Graham, but also with Presidents such as Frank Harding and Aki Fujinuma, and I had the honor of sharing the IFAC Board with exceptional colleagues.
I believe IFAC is a great organization, not because of its size or its budget, that we would wish to be higher in some areas, but fundamentally because of its mission, its objectives, its spirit, its convictions, and its seriousness as an institution.
I firmly believe in and admire the member bodies that comprise IFAC. Each one, in its environment and its specific field of action are, in many cases, model institutions in their respective societies and, in all cases, entities dedicated to their members and to the mission of IFAC.
This is your organization. It is your child that, next year, will be celebrating its 30th birthday.
This unique, global accountancy organization is, because of the unity we represent, a great force, a respected authority, and a valued institution; we should, I believe, take great pride in this and protect it.
IFAC’s potential is even greater if we align efforts and resources with and among member bodies to achieve synergy and efficiency in areas of common interest. Our commitment should be to focus ourselves on those areas in which IFAC can achieve greater value for the public.
I have complete confidence in the capacity and commitment of the members of our Board to direct this organization in fulfilling its strategic objectives. They serve as an exemplary model of good practice in corporate governance, and do much to generate enthusiasm, participation and consensus to help IFAC achieve its mission.
I want to congratulate Robert Bunting, who will be my Deputy President. IFAC should be proud to have an officer with his professional and personal qualities. I know that I will count on him and we will work as a team serving from our respective roles for this institution.
Our institution also benefits from the invaluable work of our Chief Executive, Ian Ball, with his capacity, character, expertise, and his dedication to IFAC. Together with the entire staff, all of whom I have had the opportunity to work on different tasks over these years, they make up a talented management team that is dedicated to the organization.
Looking to the future, we can identify two areas that we should work on with similar decisiveness and commitment. On one hand, we should continue to work steadfastly on strengthening public confidence in the profession and in IFAC. On the other hand, we should encourage innovation and flexibility so that our profession can readily respond to the future demands that society will place on it. We must position ourselves to remain relevant and effective, no matter how times change.
As we look ahead, I believe that public confidence in the profession and in IFAC’s work can and will be strengthened, if we remain focused on our key current initiatives:
- Standard setting;
- The Member Body Compliance Program;
- The development of the profession; and
- Being the global voice of the profession.
In the area of standard setting, the International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB), have received increasing support from international and national regulators, including the European Commission, and are being adopted in many countries around the globe. We must continue the momentum.
The revised independence standard should convert into an international benchmark and an appropriate reference to facilitate global convergence on this issue.
A new standard on whistle blowing, that will have significant implications for professional accountants in business, is anticipated as well.
Looking ahead, we should focus on ensuring that ISAs and the IFAC Code of Ethics are incorporated in the standards of the profession in every major capital market and are endorsed by those regulators and other organizations whose stature and influence can help significantly to advance the convergence process.
Over the past year, the standards of the International Public Sector Accounting Standards Board (IPSASB) also received increased recognition, especially in light of their adoption by the United Nations this year.
Governmental financial reporting is an element of vital importance to the development of countries. Clarity and transparency of public accounts is the key that can lead to necessary accountability. Broad and successful adoption and implementation of International Public Sector Accounting Standards (IPSASs) is, in part, dependent upon IFAC’s efforts to support and promote the work of the IPSASB. If IFAC does not properly promote and support IPSASs, we can jeopardize the credibility of the standards and fail to maximize the large investment in them that has been made by IFAC, external supporters and member bodies.
IFAC’s role as a standard setter and as a representative of the global accountancy profession is dependent upon the quality of the standards produced and the credibility of the organization. We should protect the standard-setting processes that we have developed and that today can be presented as examples at a global level. We should also make a commitment to ensuring that we have permanently put in place the appropriate human resources.
For the benefit of our profession and the public that we serve, we will continue to listen closely to the recommendations of the Public Interest Oversight Board (PIOB). The PIOB is already a highly regarded international body. We will work to strengthen both the processes for setting standards and the quality of those standards. I am personally committed to supporting the PIOB in all that they do, implementing the changes necessary to meet the public interest tests of good regulation. We must, I believe, build on the reform process that contributed to the renewal of public confidence in this great profession of ours. We can do so by continuing to focus on strengthening our standards and ensuring that their due processes meet the PIOB’s expectations.
We should continue to promote convergence, which I believe is an achievable goal and one that is in the best interests of the public. The more quickly we move on this, the greater the chance for success.
The policy position issued by the International Auditing and Assurance Standards Board and the guidelines that will surely be issued by the rest of the Public Interest Activity Committees will provide an orientation to the meaning and scope of convergence for each set of standards.
The IFAC Member Body Compliance Program is an essential initiative. It is an effective program to both strengthen and support the member bodies. It also represents a unique contribution to the public interest by making available information about the global profession that is not available in another single source and is difficult to collect. This demonstrates the operational capacity of our organization and its potential for activities like this that truly reflect our global position.
The Compliance Program should continue to be the engine for driving ongoing improvements in the quality and consistency of the financial management practices and auditing. We should position the Compliance Program as an effective tool to monitor and secure transparency of the financial reporting systems’ characteristics. Its implementation over the past year, and the unprecedented support it received from IFAC members, sends a loud and clear signal of your commitment to promoting high standards and quality performance by the world’s accountants. Looking ahead, we must leverage what we have learned. We have collected very rich information. Now we must consider effective ways to communicate this information. In meeting our goal of transparency, it is important for the public to know that they can easily obtain information on the financial reporting systems in the private and public sectors in countries around the globe.
Additionally, we should move from data collection to action. Under the leadership of the Compliance Advisory Panel and staff, we will begin the process of developing and monitoring action plans to help those countries whose standards were not yet of IFAC caliber.
In this process, we will align the activity with the World Bank and other multilateral credit agencies and aid organizations, trying to avoid unnecessary duplication of efforts while making the most efficient use of available resources.
Where possible, we will also try to engage the accounting firms, through the Transnational Auditors Committee or TAC, to secure their support for the Compliance Program in terms of collaboration with the member bodies in the implementation of the action plans, especially in those countries where resources of the member bodies are insufficient.
Another critical area for IFAC is working to develop the profession. The work initiated this year by the Developing Nations Committee has set the tone and the pace for the future. We have made it known that we are dedicated to helping all countries, no matter how large or small, no matter where they are located, no matter what their political climate. To be true to our mission of protecting the public interest through the development of stable economies, we must continue to be proactive in our approach to developing nations. We must offer help before we are asked for it. We must propose solutions before the questions have been formed.
Development of the profession in emerging countries is crucial for the sustainability of the profession and also for the sustainable development of those countries. Accountancy and auditing are essential for the functioning of the economy and the existence of an organized profession is essential to the functioning of accounting and auditing. We should promote the creation of professional bodies in those countries where there are none, attaining an organized accountancy profession in every country.
Another area in which we should continue to work intensely is on the development of the professional firms, whatever their size may be.
We recognize the potential strengths and influence of the TAC and its role as spokesman for how firms should and are improving audit quality. We should also encourage new firms to join the Forum of Firms.
We will also continue our work through the Small and Medium Practices Committee. There should be no doubt with respect to IFAC’s commitment to meet the needs and serve the interests of professional practices of all sizes. IFAC should continue to be the vehicle through which the SMPs can channel their collaborative efforts, trying to identify and implement solutions that help them grow and develop.
IFAC must also continue to provide resources for and support the development of professional accountants in business. These professionals play a key role in the financial reporting supply chain, contribute to a business’s economic growth and development and are often involved in the implementation of good governance. The vast number of professional accountants in business and the diversity and scope of their work are testimony to their potential influence not only on their employers, but on society in general.
IFAC’s reputation as a valid, reliable leader of the accountancy profession and its related stakeholders is dependent upon consistent, clear, high quality public messages and maintaining respect and strong relations with internal and external audiences. We should continue our proactive attitude in the relationships with firms, regulators, independent auditor oversight authorities, and investors.
As we look to the future, we should also recommit to and communicate the work of the IFAC Regulatory Liaison Group (IRLG). This group will continue to meet periodically with the Monitoring Group of regulators, and we will also plan a higher level of activity for the IRLG. Through this mechanism, we will also establish regular and open contact with the recently created International Forum of Independent Audit Regulators as well as with any new regulatory organizations that emerge.
IFAC supports the oversight mechanisms that protect the public interest. Quality is ultimately the final and principal objective, and as much a focus for our profession as for the oversight bodies. The auditor should focus on the effectiveness and efficiency of his or her specific task: to perform a quality audit. Meeting the requirements of the independent audit regulator will then be a natural consequence.
The audit regulator, for its part, should comply with its obligation in the public interest and should recognize that the measure of its success will finally be the level of quality reached by the auditors it supervises.
Without diminishing the focus on other key activities that I have just referred to, IFAC, as the globally organized profession, must continue to give attention to the future. How are we to meet the challenges that lie ahead? And how can we accomplish our mission of improving the global economy? We know the world does not stand still.
The profession should continue looking to the markets it serves – both within organizations and from public practice – and to the needs of those markets. We need to be prepared to operate in the new technology environment, to take a leadership role in the preparation and assurance of non-financial information, and to identify and design more efficient ways to deliver our services or to generate new services that respond better to the changing demands of the market.
Like the world around us, we cannot stand still. We should continue to be players. We should take the initiative.
Here we have a clear link to education. Our profession can only meet the global challenges of the 21st century if we are prepared to deal with an increasing quantity of financial reporting, governance and related audit requirements, greater complexity in business transactions, the ongoing emergence of new technology and the new demands of the market. Education provides the means to meet these challenges. If we do not see education as a priority, then we will be making a serious mistake.
As we strive to meet all these goals, we must be inclusive, encourage collaboration, and lead by example.
We must be willing to embrace each and every culture. We must recognize their strengths and understand their weaknesses. We must accept the diversity of this great profession of ours and consider how we can best benefit from it. We must be willing to receive and respect comments from every region and country. We must work to better understand their needs and those of their members. To be inclusive, we must create an environment conducive to communication and participation.
As part of our commitment to be inclusive, we must strive to overcome the language barriers that exist. I encourage member and regional bodies to continue their work on translations of our standards and guidance. I also urge you, where possible, to translate any of the speeches that we present and which are posted on the IFAC website. IFAC will continue to do its part as well. We will make sure that the availability of such translations is promoted on the IFAC website and in other materials that are distributed globally. We are translating development materials, including our developing nations toolkit, to make sure it is accessible to those most in need of it. Now we will also consider the feasibility of translating portions of the IFAC website into selected languages.
In addition to inclusiveness, we must make a strong commitment to collaboration. Collaboration is what got us here today. It is what enabled IFAC to develop new guidance and resources such as the IFAC KnowledgeNet for Professional Accountants in Business. It has enabled us to develop a stronger voice and to have that voice heard. Collaboration with all of you, as well as with others such as the World Bank, regional development banks, national standard setters, and organizations like the Financial Stability Forum, has enabled IFAC to more effectively accomplish its mission. We should promote and facilitate the collaboration between member bodies in projects where it is merited, using IFAC as the vehicle to make global projects viable and effectively add value.
Finally, let me share with you what I believe is a personal challenge for all of us. That is, the challenge to lead by example, to live our values of integrity, transparency, and expertise. We must demonstrate to our members, to investors, to regulators, and to global leaders that our values and ethics are indeed at the core of all that we do.
If we want to continue to enhance the ethical quality of our profession and to help improve the ethical quality of business and society in general, I believe we must, in all cases, do more than we are required to do. As leaders of the accountancy profession, it is our role to demonstrate how our organizations work to put the public interest first and how we inspire members to do the same. Our challenge is to lead by example.
Dear friends, the accountancy profession is standing strong and looking ahead. We have a clear vision. We are committed. We must act to give effect to that vision. Together, through IFAC, we can work to become a better, stronger and more effective profession, one that is more capable of achieving its goal of enhancing societies around the globe.
We must strive to manage the future and not allow it to manage us. Together, we can shape a future that protects the public good and that makes the world, plain and simply, a better place.
Thank you.