The report, which looks at the global status of adoption and implementation of international standards, stressed both public and private sectors around the world have a low understanding and capacity to introduce international accounting education standards.
IFAC’s Joseph Bryson, director of quality and development, told PF International that international education standards are “absolutely fundamental” for the profession, as well as economic growth.
He said that when accountants around the world are trained to the highest level, it adds credibility to the profession and the government, which in turn can help economies grow.
He said: “It improves overall trust in the system, and where there is trust there’s more investment, where there’s investment there’s more flow of capital and more economic growth.”
Bryson added that mobility is a hallmark of the profession and that education allows professionals to move around the world.
“Where countries have adopted high quality standards for competent professionals, those professionals are able to get mutual recognition in other jurisdictions and work in those as well. But they are also able to be mobile between the public and the private sector.
“It’s not only a passport around the world, it’s also a passport around the economy and the nation.”
The International Accounting Education Standards cover the areas of technical competence and professional skills, values, ethics, and attitudes.
The report also touches on the international standards for ethics and investigation and discipline, which applies to all professional accountants [public sector and private sector], IFAC said.
The federation also stressed that international accountancy standards can enable wider economic growth and improve the global economic system.
The report found that the accountancy profession has stayed independent of nationalist trends and the adoption of standards has continued to go in the ‘right direction’, including countries moving to accrual-based accounting.
The assessment of 80 jurisdictions found that 9% have adopted accrual-based international public sector accounting standards (IPSAS) for all public sector entities.
Five jurisdictions have adopted IPSAS through direct reference in law and two jurisdictions through the convergence or by incorporating the standards into their national requirements.
Bryson said that if governments are committed to moving to accrual-based accounting, they have the power to put them into law.
He said: “The benefit that the public sector has is that it often has the authority to set standards, so the decision is taken at the government level and once that decision is taken the standard is essentially law.”
He added that it may take more time to convince the governments to adopt the standards, but once they have the standards, they are also taken more seriously as they are imposed by higher regulators – an advantage over the private sector.
Out of the 46% of jurisdictions that have partially adopted IPSAS, 18% have adopted cash-based or a modified form of cash-based IPSAS, with 12 of these countries reporting plans to move to accruals.
But IFAC reported that its member organisations around the world, which are promoting IPSAS adoption and helping governments adopt the public sector standards, would benefit from greater strategic focus and concrete actions and timelines.
