Afghanistan: Joining the DotsDr. Ahmad AlmeghamesDeputy ChairmanIFAC PAO Development CommitteeAfghanistan Stakeholders’ Ro...
PAOs are Important!               Page 2 | Confidential and Proprietary Information
IFAC’s MissionTo serve the public interest by:• Contributing to the development, adoption and  implementation of high-qual...
Why are PAOs Important to the Profession?• Act in the public interest• Develop and produce competent accountancy  professi...
Why are PAOs Important to the Economy?• Attract Foreign Direct Investment (FDI)• Promote growth and development of the Sma...
Challenges to PAO Development                                1. Lack of                              Awareness of         ...
How Does IFAC Interact with PAOs?    CAP/                                     PAO  Compliance                             ...
How Does IFAC Assist PAO Development?                       PAO                    Development                     Committ...
A Focus on PAO Development    Develop the capacity of the accountancy profession    • Outreach to existing and potential I...
Key Considerations in PAO Development• Legislation: Legal recognition/structure• Regulation of the Profession: Relationshi...
PAO Development: Success Factors• Maintain dialogue/communications with government  stakeholders• Build relationships with...
PAO Development: IFAC Resources   Statements of Membership Obligations (SMOs)   •http://www.ifac.org/sites/default/files/d...
Thank You!             Page 13 | Confidential and Proprietary Information
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Afghanistan: Joining the Dots

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Presentation given by Dr. Ahmad Almeghames, Deputy Chairman of the IFAC Professional Accountancy Organization Development Committee, at the Afghanistan Stakeholders’ Roundtable hosted by the Association of Chartered Certified Accountants, March 2012, Dubai, UAE.

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  • As the Deputy Chair of the IFAC PAO Development Committee, I must stress this message. As most of you know, the Committee works to raise awareness of accountancy, bring attention to the need for a formal profession, and highlight the economic and social benefits that a formal profession can bring.An active and well established professional accountancy body is essential to developing an accountancy profession that is able to provide consistently high quality service in the public interest.Efficient and reliable credit and capital markets are a prerequisite for a nation’s economic stability and growth and to the health and welfare of its citizens. The bedrock of sound credit and capital markets is high quality and reliable financial information – information that is based on ethics and integrity, on high quality international accounting and auditing standards, and on the work and sound judgment of both internal and external professional accountants.
  • PAOs are an important part of IFAC’s overall mission and my Committee focuses onaddressing the challenges facing the development of strong PAOs in emerging and developing countries. I will tell you more about this a little later. First, I’d like to look at why we believe that strong, efficient PAOs are of such value to the profession and indeed the economy as a whole.
  • PAOscontribute to the profession. They:Protect the public interest as proponents of good corporate governance and consistent global standards.Promote and develop knowledge, skills and competence througheducation, certification and CPD programs. Produce capable professionals.Through adoption and implementation of international professional and ethical standards they set the bar for behavior and practice of accountancyprofessionals, enhancing public trust.Assistwithsound public policy guidance and advice on accountancyrelatedtopics by acting as a center of knowledge and expertise.Further the quality of financialreportingthroughreview, investigation, and discipline of professionals.
  • Looking at the bigger picture, PAOs also contribute to the economy.They Attract Foreign Direct Investment (FDI) – The development of capital markets requires credible and reliable financial information to build investor confidence, further sound economic and financial management, and increase the attractiveness of a country’s investment climate, which facilitates FDI and business development. Promote Growth and Development of the SME Sector – According to the Organisation for Economic Cooperation and Development (OECD), small- and medium-sized entities (SMEs) account for over 60% of gross domestic product (GDP) and 70% of total employment in low-income countries. These businesses require high-quality financial information to support business planning, facilitate access to credit, and expand operations; thus, enhancing their ability to thrive and grow. Enhance Transparency and Accountability in theUse of Public Funds – High-quality financial information in the public sector enables assessment of the impact of fiscal and monetary policy decisions; assists external reporting by governments to electorates, taxpayers, and investors; and aids internal management decisions in resources allocation (planning and budgeting), monitoring, and accountability. Improve the Design and Delivery of Vital Public Services – Utilizing the information provided through high-quality financial reporting, policymakers and others in positions of authority can improve the efficiency and effectiveness of government programs, better achieve the objectives of their design, and successfully deliver vital public services to those in need.  
  • There are three mutually re-inforcing challenges which face the development of PAOs worldwide: LACK OF AWARENESSIn many countries there is often a lack of awareness and understanding on the part of governments regarding the role of professional accountants and the positive impacts a strong PAO can have on the overall financial sector development and growth of an economy. This lack of awareness hinders the creation of clear legislative frameworks which support government recognition of PAOs, the legal establishment of a system for educating, certifying and continuing trainings for competent and capable professionals and effective independent oversight of the profession. PAO WEAKNESSESWhen there is a lack of awareness of the benefits and value of the accountancy profession, attracting individuals into the profession becomes more difficult. Weak (low) membership reduces the technical capacity and diversity of thought and experience of an organization resulting in a lack of ability to properly function as a resource for government departments, lawmakers and stakeholders involved in financial policymaking and regulation, inability of the PAO to govern and plan strategically and an inability to provide educational opportunities, guidance and assistance to accounting and auditing professionals. LACK OF CAPACITYWithout strong membership access to adequate technical and financial resources vital activities such as the translation of international standards and official publications, creation and provision of training and education programs, development of quality assurance and investigation and disciplinary systems becomes difficult, if not impossible, for PAOs. This only reinforces the lack of awareness of the value of accountancy and the role of PAOs in the economy.
  • IFAC interactswithPAOsdirectly in twokeyways: through the Compliance Program and through the PAO Development Committee. The Member Body Development Team holdsresponsibility for boththese areas. Its 7 technical staff holdregional portfolios coveringAfrica, Americas and Caribbean, AsiaAustralasia-Oceania, Middle East; and Europe and Central Asia. Combined, they have proficiency in six languagesincludingArabic, French, Russian and Spanish. Afghanistan fallsunder the AsiaAustralasia-Oceania portfolio, whichisoverseen by Marta Russell, Technical Manager – Member Body Development.
  • While the majority of us here know how the Compliance Program, and the SMOs specifically, are the basis for PAO development, today with our focus being on continuing to lay the foundations for the establishment of a robust accountancy profession in Afghanistan, I want to focus specifically on the work of my Committee: the PAO Development Committee.
  • Three strategic goals guide PAO Development Committee activities. These activities all serve to further develop and strengthen existing PAOs. Developing the capacity of the accountancy profession to produce high-quality financial information and sound financial management systems capable of supporting financial stability, economic growth, and social progress. The Committee produces tools and guidance and conducts technical assistance to facilitate capacity development at both the national and regional levels. In 2011, in-country advisory and technical assistance was provided to over 100 PAOs (including associates, members and potential members). In 2011 and throughout 2012, workshops focused on PAO development will be held in a number of regions including the Middle East, Europe and East Asia Pacific. These workshops bring together PAOs in each region and facilitate discussion and knowledge sharing around development issues.Increasing awareness building and knowledge sharing around adoption and implementation of international standards. The Committee works to enhance the understanding of the importance that IFAC, PAOs, regional organizations and accountancy groupings, and the donor community play in international development. It also encourages and supports the mentoring of PAOs in developing and emerging economies by regional organizations, accountancy groupings, and more developed bodies. One of the major developments has been to launch the Mentoring Program. The Program’s over-arching aims are to (a) raise awareness of mentoring in its various forms as an effective form of collaboration between PAOs to further the development of the profession; (b) increase the range of tools and guidance materials available to existing and potential mentors and mentees; and (c)create opportunities that encourage and facilitate the formation of mentoring relationships. We recently held an interactive launch workshop that brought together four Recognized Regional Organizations and Accountancy Groupings as well as IFAC Member Body representatives from countries all over the world including Australia, Canada, China, India, Kazakhstan, Nigeria and the UK. The workshop set out to recognize, and raise awareness of, the corporate social responsibility of PAOs to contribute to development of the global profession. Its innovative style promoted a candid exchange of views and experiences around a direct PAO-to-PAO method of capacity building that is increasingly visible and has the potential to deliver flexible, culturally relevant sustainable results. Engage and deepen development partnerships with the international donor community, regional organizations, and public/private sector stakeholders. The Committee shares resources, knowledge, and experience, and deliver guidance, advice, and assistance in an efficient and effective manner. The MOSAIC MOU between the donor community and IFAC is an historic agreement that underlies the goals and objectives of the PAO Development Committee and works to enhance donor support for the establishment and strengthening of PAOs around the world. MOSAIC sets forth the basis for improving cooperation and collaboration between IFAC and international donors, as well as the rest of the international development community. MOSAIC will help organizations to align activities, focus on building the capacity of professional accountancy organizations, and achieve mutually beneficial results to create stronger systems of public financial management, higher quality accountancy information, and financial reporting, which is IFAC’s vision.
  • An organized accountancy profession is a central element in any society seeking to establish and maintain a sound and stable financial infrastructure, attract domestic and foreign investment, and operate efficiently and effectively and in the best interest of its citizens. There is no doubt that in the case of Afghanistan, there is a need to form a strong legal and regulatory foundation for the empowerment of a professional body that is able to work towards this goal.So what are the key considerations in PAO development?
  • While each region, and indeed each national profession, has its own distinct challenges and success factors, there are a number of essential considerations we find are relevant in all cases.
  • …and IFAC has a wealth of resources to help!
  • Afghanistan: Joining the Dots

    1. 1. Afghanistan: Joining the DotsDr. Ahmad AlmeghamesDeputy ChairmanIFAC PAO Development CommitteeAfghanistan Stakeholders’ RoundtableMarch 14th, 2012Dubai, UAE Page 1 | Confidential and Proprietary Information
    2. 2. PAOs are Important! Page 2 | Confidential and Proprietary Information
    3. 3. IFAC’s MissionTo serve the public interest by:• Contributing to the development, adoption and implementation of high-quality international standards and guidance;• Contributing to the development of strong professional accountancy organizations (PAOs) and accounting firms, and to high-quality practices by professional accountants;• Promoting the value of professional accountants worldwide; and• Speaking out on public interest issues where the accountancy profession’s expertise is most relevant. Page 3 | Confidential and Proprietary Information
    4. 4. Why are PAOs Important to the Profession?• Act in the public interest• Develop and produce competent accountancy professionals• Promote strong professional and ethical standards• Act as a resource to government, regulators, donors, mentors, and regional and international organizations• Further the quality of financial reporting Page 4 | Confidential and Proprietary Information
    5. 5. Why are PAOs Important to the Economy?• Attract Foreign Direct Investment (FDI)• Promote growth and development of the Small- and Medium-sized entities (SME) sector• Enhance transparency and accountability in the use of public funds• Improve the design and delivery of vital public services Page 5 | Confidential and Proprietary Information
    6. 6. Challenges to PAO Development 1. Lack of Awareness of the Value of Accountancy Mutually Reinforcing Challenges 2. Professional 3. Lack of Accountancy Capacity to Organization Provide Vital (PAO) Activities Weaknesses Page 6 | Confidential and Proprietary Information
    7. 7. How Does IFAC Interact with PAOs? CAP/ PAO Compliance Development Program Committee Member Body Development Team Page 7 | Confidential and Proprietary Information
    8. 8. How Does IFAC Assist PAO Development? PAO Development Committee Page 8 | Confidential and Proprietary Information
    9. 9. A Focus on PAO Development Develop the capacity of the accountancy profession • Outreach to existing and potential IFAC Member Bodies • PAO workshops focusing on capacity building and SMOs Increase awareness building and knowledge sharing • Mentoring Program • Participation in regional events and alignment with regional bodies Engage and deepen development partnerships • MOSAIC (Memorandum of understanding to Strengthen Accountancy and Improve Collaboration) Page 9 | Confidential and Proprietary Information
    10. 10. Key Considerations in PAO Development• Legislation: Legal recognition/structure• Regulation of the Profession: Relationship with government• Governance: Organizational structure• Committees: Key areas of function/activity• Management: Professional staff• Financing: Funding operations and activities• Marketing/Promotion: Raising awareness and defining value statement Page 10 | Confidential and Proprietary Information
    11. 11. PAO Development: Success Factors• Maintain dialogue/communications with government stakeholders• Build relationships with other peer PAOs• Work with and through regional PAOs• Attend regional/international events on PAO establishment, development and strengthening• Provide communication and feedback regarding PAO development challenges/success factors to IFAC Member Body Development Staff• Work with IFAC Member Body Development Staff Page 11 | Confidential and Proprietary Information
    12. 12. PAO Development: IFAC Resources Statements of Membership Obligations (SMOs) •http://www.ifac.org/sites/default/files/downloads/Statements_of_Membership_Obligations.pdf PAO Development Committee •http://www.ifac.org/about-ifac/professional-accountancy-organization-development-committee Establishing and Developing a Professional Accountancy Body toolkit •http://www.ifac.org/publications-resources/establishing-and-developing-professional-accountancy-body Unearthing the Power of Professional Accountancy Organizations •http://www.ifac.org/publications-resources/unearthing-power-professional-accountancy-organizations Mentoring: The Path to Sustainable Development •https://www.ifac.org/publications-resources/mentoring-path-sustainable-development IFAC Member Body Development Contact •Marta Russell Technical Manager, Member Body Development – Asia-Pacific MartaRussell@ifac.org Page 12 | Confidential and Proprietary Information
    13. 13. Thank You! Page 13 | Confidential and Proprietary Information

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