Developing the Accountancy Profession in Africa


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Presentation given by Szymon Radziszewicz, IFAC Senior Technical Manager, to the African Financial Management Group of the World Bank, Feb. 2012.

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  • Global organization for the accountancy professionComprised of 167 Members and Associates in 127 countriesMembers and Associates are Professional Accountancy OrganizationsRepresents 2,5 millions accountants in public practice, business, government, and academiaOne thing we have learned – different ways to effectively organize the profession, different legislative frameworks, different stakeholder expectations and capacity Green – membersYellow – associates onlyGrey – no IFAC representationAfrica – total of 54 countries but only 23 IFAC members and associates in 22 countries…
  • Going to focus on Compliance Program and PAO Developmentspecifically
  • Framework for meaningful Professional AccountancyOrganizationsRecentrevisionproject in progress:
  • I am sure we are all familiarwith the Compliance Program…Program and Compliance Advisory Panel (CAP) launched in 2004 as part of IFAC reforms. PIOB Oversight – Observers at CAP meetings since 2007Established the 7 Statements of Membership Obligations (SMOs) which serve as the Program’s basis and provide benchmarks for PAOsEncourage continuous improvement and developmentEvaluate the extent to which members are meeting the SMO requirementsAssist members in adopting and implementing international standards and best practicesDemonstrate progress being madePromote transparency through publication of responses on the IFAC website. IFAC’s 167 members and associates are required to participate in the Compliance Program to demonstrate that they are maintaining their good standing and addressing the requirements of IFAC membership. Through the Compliance Program IFAC gathers and publishes a great deal of information relating to the work of its member bodies around the world and the developments within national professions. This information can be leveraged by donors, regional bodies, regulators and indeed mentors interested in development of the profession.
  • Whoissupportingthese efforts at IFAC? The Member Body Development team includesseventechnical staff who support both the Compliance Program and PAO DevelopmentCommittee. Theyholdregional portfolios in Africa, Americas and Caribbean, AsiaAustralasia-Oceania, Middle East and Europe and Central Asia.Combined, the staff has proficiency in six languagesincludingArabic, French and Spanish.
  • The staff holdregional portfolios covering Africa, Americas and Caribbean, AsiaAustralasia-Oceania, Middle East; and Europe and Central Asia. Combined, they have proficiency in six languagesincludingArabic, French and Spanish.
  • Somespecifictools for PAO development:Good Practice Guidance, Establishing and Developing a Professional Accountancy BodyMentoring Guidelines for Professional Accountancy OrganizationsThe Education, Training, and Development of Accounting Technicians
  • Developing the Accountancy Profession in Africa

    1. 1. Developing the Accountancyprofession in Africa Szymon Radziszewicz Senior Technical Manager, Member Body Development Team Leader African Financial Management Group, World Bank February 28, 2012 Page 1 | Confidential and Proprietary Information
    2. 2. IFAC Member Countries Page 2 | Confidential and Proprietary Information
    3. 3. What Does IFAC Do?• Serves the public interest• Establishes and promotes adherence to high quality professional standards and furthers their adoption and implementation of such standards• Supports the global development of the accountancy profession, professional accountants in business and small and medium practices• Shares in the regulation of the profession• Speaks out on public interest issues where the profession’s voice is most relevant Page 3 | Confidential and Proprietary Information
    4. 4. An Overview of IFAC IFAC Structure, Oversight, and ConsultationKEYACCOUNTABILITYOVERSIGHTCONSULTATION/ADVICE Monitoring IFAC Group COUNCIL Public Audit Nominating Interest Committee Committee Oversight Board IFAC IFAC Regulatory BOARD Liaison Group Planning and Finance Committee Forum Consultative Consultative Consultative Consultative of Firms Advisory Advisory Advisory Advisory Group Group Group Group Professional Professional Small and International International International International Transnational Accountancy Accountants Medium Compliance Auditing and Accounting Ethics Public Sector Auditors Organization in Business Practices Advisory Panel Assurance Education Standards Accounting Committee Development Committee Committee Standards Standards Board for Standards Committee Board Board Accountants Board Page 4 | Confidential and Proprietary Information
    5. 5. Ultimate ObjectiveStrong Accountancy Profession = Inclusive andSustainable Growth Inclusive and High-Quality Sustainable Growth Financial Information Accountancy Profession Page 5 | Confidential and Proprietary Information
    6. 6. 7 Statements of Membership Obligations SMO1 Quality Assurance SMO2 International Education Standards SMO3 International Standards on Auditing SMO4 International Code of Ethics SMO5 International Public Sector Accounting Standards SMO6 Investigation and Discipline SMO7 International Financial Reporting Standards Page 6 | Confidential and Proprietary Information
    7. 7. Understanding the SMO Applicability Framework Degree of responsibility for an SMO area Direct Shared No Responsibility Implement all the For the elements for Use best endeavors requirements of the which MB has direct to: SMO responsibility follow the approach for "Direct" a. Encourage those In exceptional responsible for the situations departures AND requirements to are possible if can be follow this SMO injustified from the public For the elements for implementing them; interest perspective which MB has no direct and and need to be responsibility follow the documented approach for b. Assist in the "No Responsibility " implementation where appropriate Page 7 | Confidential and Proprietary Information
    8. 8. Compliance Program Self -Assessment Overview of national Benchmarking against the 7 regulatory and standard- SMOs setting framework Action Plan Strategic document illustrating a PAOs progress toward, or continued compliance with, SMO requirements Page 8 | Confidential and Proprietary Information
    9. 9. African Landscape• Size of the continent• Large number of jurisdictions• Cultural and linguistic• Diversity of regulatory frameworks Page 9 | Confidential and Proprietary Information
    10. 10. Key Challenges• Lack of financial and technical capacity in many professional accountancy bodies call for: – Investment in the accountancy profession by national governments and donor agencies – Support of regional organizations – More advanced bodies acting as mentors – Development of guidance and tools• Abilities of bodies to clearly communicate challenges, and need for resources is crucial to obtain assistance Page 10 | Confidential and Proprietary Information
    11. 11. Key Challenges• Outdated statutory frameworks call for revision and the development of requirements related to: – The empowerment of the various institutions and the clarification of their responsibilities – The ongoing adoption and implementation of international standards – The establishment of QA review systems• Professional bodies and other relevant institutions should promote legal amendments and provide input as needed Page 11 | Confidential and Proprietary Information
    12. 12. Challenges: Quality Assurance and Quality Control• The structure of the program is not aligned with SMO1, Quality Assurance• QA system may have been established but may not have been implemented or is not sustainable• Quality control standards at the firm and engagement level have not been mandated (need to adopt ISA 220 and ISQC 1)• The scope of engagement subject to review and the timeline to develop the QA system are often inappropriate Page 12 | Confidential and Proprietary Information
    13. 13. Challenges: Education and Development• Need for both professional education and practical experience• University syllabus and final examinations not always sufficiently updated• CPD and monitoring of compliance with CPD may require enhancement• Professional bodies not always involved in final examinations• Pre-qualification education requirements do not provide sufficient foundations for professional education Page 13 | Confidential and Proprietary Information
    14. 14. Challenges: ISAs and IFRSs• Adoption vs. Implementation• Often one-time adoption and no ongoing mechanisms to keep up with the pace of standards• Lack of training, tools and guidance• Local adaptation – significant gaps• Translation challenges (West Africa)• National standard-setting bodies are sometimes inactive• Overlap of standard-setting responsibilities Page 14 | Confidential and Proprietary Information
    15. 15. Challenges: Code of Ethics and I&D• Outdated Codes of Ethics (not incorporating the threats and safeguards framework) often based on foreign codes• Lack of capacity to implement the Code requirements• Lack of power and resource to properly investigate and sanction• The public is rarely sufficiently informed about the existence and functioning of the I&D mechanisms• Sometimes confusion between I&D and Quality Assurance Page 15 | Confidential and Proprietary Information
    16. 16. Success Factors• Work with PAFA, ABWA and FIDEF to support the establishment and strengthening of PAOs in the region• Support development and modernization of financial sector framework• Support existing processes of adoption and implementation of international standards• Encourage synergies and economies of scale with regional standard-setters when they exist• Encourage the development of implementation guidance and tools Page 16 | Confidential and Proprietary Information
    17. 17. Success Factors: IFAC’s Role 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 17 | Confidential and Proprietary Information
    18. 18. Member Body Development CAP/ PAO Compliance Development Program Committee Member Body Development Team Page 18 | Confidential and Proprietary Information
    19. 19. Member Body Development Team• Russell Guthrie – Development/PAODC• Sylvia Tsen – Quality/CAP• Szymon Radziszewicz – Team Leader• Thomas Zimmerman/Darlene Nzorubara – West Europe and Africa• Joseph Bryson – Latin America and Caribbean• Daria Koukhar – North/Cent/East Europe and Central Asia• Gabriella Kusz – Southern Europe and Middle East• Marta Russell – Asia - Pacific Page 19 | Confidential and Proprietary Information
    20. 20. Tools and Resources•• organization-development-committee•••• Page 20 | Confidential and Proprietary Information
    21. 21. Thank you Page 21 | Confidential and Proprietary Information