“京交会”会计服务主论坛嘉宾发言稿（五）
CAPA执行总裁Brian Blood在“京交会”会计服务主论坛上的发言

Good morning everyone，

Let me add my own welcome to you today.

And thankyou for inviting me to speak at this Accounting Services Forum.

After a long career in public practice with large accounting firms, I took on this role as the Chief Executive of the Confederation of Asian & Pacific Accountants, CAPA, for a number of reasons. The accounting profession has been good to me and I thought I could give something back and make a difference. I’ve always had an involvement in the profession, including being appointed President and Chair of CPA Australia some 10 years ago. And my passion for the profession has remained.

This role now allows me to focus on the profession outside of Australia, and indeed regionally and globally. Our President of CAPA, Keith Wedlock, has just told you about our mission – to develop, coordinate and advance the accounting profession in the region. What he didn’t tell you was that I wrote those words. Lets take a closer look at them:

To Develop – this is our responsibility to establish an acceptable level of standard for all aspects of the accounting profession in all countries, particularly the developing and emerging nations. This will facilitate economic activity and trade amongst all countries, and in particular provides opportunities for those developing and emerging nations to grow socially and economically, often rising out of positions of poverty.

To Coordinate – this is our responsibility to bring the accounting professions in each country together, to share knowledge and help each other. This is where relationships are formed that often lead to agreements and arrangements that facilitate the easy movement of accountants across borders.

And lastly, To Advance – our responsibility, working together, to introduce legal and regulatory arrangements, frameworks and standards that lead the way and represent good ways of running governments or businesses in the public interest. We sometimes refer to this in CAPA as the Financial Infrastructure - in place in all countries, thus providing regional and global infrastructure as well.

These elements - to develop, coordinate and advance – are easy to get passionate about. If we get it right, the accounting profession has the opportunity to be a real leader in global social, economic and financial developments, and ultimately achievements.

This morning, in looking at Trade in Accounting Services, I want to focus on 3 topics that that are each part of the global infrastructure that facilitates making it easy to do business across borders. And the 3 topics I’ve chosen operate at different levels:

The first topic applies at the very broad level – the push for Global Regulatory Convergence.  

The second topic applies globally and is key for our profession – the application of high quality International Standards.

And thirdly, I want to share with you details of a recent initiative that involved countries in our region. This is the APEC Accounting Services Initiative undertaken by the countries in APEC – the Asia Pacific Economic Cooperation.

1. Global Regulatory Convergence

A Private Sector Taskforce was recently established to consider Regulatory convergence in Financial Professions and Industries. The accounting profession was very involved, via our global body, the International Federation of Accountants, or IFAC. The report from the Task Force was issued in September 2011 and was delivered to the G-20. It was the G-20 that had requested the formation of the Task Force for this purpose.

Many of the comments I make here come from the Task Force’s report.

Global regulatory convergence is seen as a critical issue for capital markets, and any gaps in global regulatory convergence need to be narrowed. A major motivating factor is to minimize the effects of systemic risk that result from inconsistent and inadequate regulatory arrangements for globally important and increasingly interconnected industries.

The report is quick to point out that “Effective, robust, appropriate, and consistent global regulation facilitates the early detection and timely mitigation of potentially serious systemic risks that readily transfer their effects across borders and are capable of creating a global crisis such as that witnessed in recent years.”

The report also notes that global regulatory convergence is generally advocated as a means by which to:

·         achieve a level playing field for international competition;

·         achieve a leveling of standards to universal “best in class” quality standards;

·         avoid unwarranted costs to industry and to users of its services and products;

·         provide transparent information to funders and users of services and products;

·         avoid international regulatory arbitrage;

·         reduce compliance and other operational risks; and

·         create greater clarity about the regulatory regime, resulting in greater certainty for market participants around the world.

Nevertheless, the Taskforce did recognize that there are instances where complete convergence of regulatory requirements might not be the best outcome. These situations may arise where national, legal, cultural, or market conditions or behavioral differences make complete uniformity of regulatory practice neither practicable nor desirable; in those cases convergence of outcomes might be a better aim.

As noted earlier, the report was aimed at the finance sector, however some of the recommendations have broader application. I just want to pick out a few of the recommendations in the report.

Recommendation 2

G-20 to discourage nations from making unilateral decisions and implementing unilateral national regulatory reforms that are inconsistent with international standards and that widen—rather than narrow—the convergence gap.

Just last month, in April 2012, the Task Force issued an update to the G-20 and it was interesting to note that the Task Force expressed a view that it is becoming increasingly apparent that a couple of its recommendations, this being one of them, will be extremely important to achieve in the complex regulatory environment that is emerging related to the global financial crisis.

This point was emphasized by highlighting examples of areas where progress towards global regulatory convergence has slowed, and where regulatory fragmentation and extraterritorial impacts of national and regional legislative actions are evident. The examples included:

•    the Dodd-Frank legislation and rules in the US

•    the Foreign Account Tax Compliance Act in the US 

•    European data protection laws

Each of these has created issues outside the immediate country or area concerned.

The proposals for regulatory reform of the audit profession by the European Commission, such as mandatory audit firm rotation and the prohibitions on the provision of non-audit services, are another example of reforms that could have far reaching consequences and adversely impact the general thrust of convergence. Many countries are introducing their own reforms in these areas, including China and my own country, Australia. However it is a valid question to ask if such reform should be better coordinated and global implications considered.

Let me just highlight a couple of other recommendations, though I will pass little comment on these. The first one focuses on the International Organisation of Securities Commissions:

Recommendation 10

G-20 to encourage IOSCO toward convergence of capital markets regulation and oversight and to promote cross-border mutual recognition agreements for such regulation and oversight, ……

And the second one focuses on the support needed to strengthen the resourcing and governance arrangements of international regulatory organizations (including standard setters) to enable them to achieve their objectives.

Recommendation 11

G-20 to support appropriately structured and resourced international regulatory organizations and national regulatory bodies that have clearly defined expectations and responsibilities.

2. International Standards

The last recommendation I will highlight from the Task Force report brings me to the second topic in my presentation – International Standards.

Recommendation 5:

G-20 to encourage and support the development, adoption, implementation, and consistent interpretation of globally accepted high- quality international standards, to the greatest extent possible, for each of financial reporting, auditing, valuation, and actuarial services.

For several decades IFAC has been a strong supporter of the development of international standards. The key standards are:

·         International Financial Reporting Standards

·         International Public Sector Accounting Standards

·         International Audit Standards

·         International Ethical Standards

·         International Accounting Education Standards

In recent years, the responsibility for standard setting in financial reporting and auditing has been moving from being primarily the responsibility of national standard-setting boards toward being performed at an international level.

In order for international standards to gain legitimacy and acceptance by the international community, IFAC and the International Accounting Standards Board have recognized the importance of developing robust governance arrangements for standard setting in auditing and financial reporting. Both recognize that governance arrangements should be structured to address the public interest, and to promote independence, performance, transparency, and accountability.

These organizations have also been instrumental in supporting the global adoption and implementation of standards through proactive stakeholder engagement, translation programs, and the issuance of support and guidance materials.

About 120 countries now require or permit the use of International Financial Reporting Standards (IFRSs), while over 70 countries are currently using, or are committed to using, the latest version of the International Standards on Auditing (ISAs).

At this point I would like to introduce some comments about the public sector as well. CAPA currently has a strategic focus in this area. The G-20 Task Force report was for the private sector, however in their April 2012 update which I referred to earlier, they took the opportunity to provide the following additional recommendations to the G-20:

• Facilitate urgent and fundamental work, to be conducted or commissioned by the Financial Stability Board (FSB), to consider the nature of institutional changes needed in public sector financial management to protect the public and investors in government bonds.

• Encourage the FSB to include International Public Sector Accounting Standards (IPSAS) as one of the set of standards recognized as key for sound financial systems and deserving of timely implementation.

The accounting profession has generally been very successful in developing, promoting and implementing international standards. Of course, total convergence or adoption globally is still to be attained and an important milestone will be attained when the United States achieves convergence with International Financial Reporting Standards.

In our region, which includes many developing and emerging nations, the adoption of international standards is often easier to achieve. For many nations without existing established or mature financial infrastructure, the most efficient and effective way forward is to adopt international standards. 

All of these standards are developed through a rigorous due process, with input from national standard setters, IFAC member bodies and regional organizations, the general public, and many others. And they all exist in order to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation—and contribute to high quality financial information.

Emerging economies need them as much as Wall Street or the Tokyo Stock Exchange. Perhaps they need them even more, because their businesses have so much to prove to foreign investors about their own viability and the stability of their monetary systems. And these standards are all developed, adopted and implemented in the public interest.

3. APEC Accounting Services Initiative

I would just like to finish my remarks this morning by introducing you to the Accounting Services Initiative undertaken by the countries of the Asia Pacific Economic Cooperation.

This Initiative aimed to enhance transparency of licencing and qualification requirements and procedures for the provision of accountancy services across APEC economies, and develop guidelines for the regulation of foreign accountants that can inform approaches to the regulation of foreign accountants.

A workshop was held as part of the Initiative, to bring together accounting professional bodies, practitioners and regulators to exchange views on the regulation of foreign accountancy service providers.

The Initiative was sponsored by Australia and co-sponsored by Japan, The Philippines and the United States. China was involved in the workshop.

The first stage of the Initiative involved the development of an inventory of current licensing and qualification requirements for the supply of accountancy services in each APEC economy.

An inventory of relevant licensing and qualification requirements was compiled and is now maintained on a website at www.accountingservices.apec.org

Here is a snapshot of what the inventory database looks like.

Non-Binding Guidelines for the Regulation of Foreign Accountancy Professionals have also been endorsed. These are regarded as an important reference tool for APEC Economies and are intended to provide guidance on issues that APEC Economies may wish to consider when introducing or amending rules on the regulation of foreign accountancy professionals. 

The Guidelines in summary are:

1. Regulation of foreign accountancy professionals should be based on the following overarching principles:

·         Professional Conduct
(local ethical, conduct and disciplinary standards that foreign accountancy professionals may be required to submit to should be no more burdensome than requirements on local accountancy professionals)

·         Public interest - consistency across economies of consumer protection frameworks through alignment of professional standards recognised on an international level, such as the International Federation of Accountants (IFAC)
(foreign accountancy professionals may be required to disclose to clients their status as a foreign accountancy professional and may also be required to maintain professional indemnity insurance to satisfy local insurance requirements)

·         Transparency
(regulations on foreign accountancy professionals should be explicit, clear and publicly available)

·         Consistency
(regulations should be uniformly applied, and based on objective criteria, unless where circumstances may reasonably require otherwise).

2. Regulations across economies should provide flexibility to permit accountancy professionals to work together as each economy needs it by entering into cooperative networks or other forms of associations. This should be facilitated by a common competency framework for accounting qualifications recognized on an international level, such as the International Federation of Accountants (IFAC).

3. Professional accountancy organizations (PAOs) within the APEC economies should permit membership to foreign accountancy professionals who satisfy local educational or professional requirements, experience and continuing professional development requirements.

4. Regulatory frameworks should endeavour to be as consistent as possible across economies to facilitate seamless services and lower costs to allow provision of accountancy services applicable and appropriate to the development level of each economy.

Summary

In the time allowed, I have attempted to cover a number of topics that each impact on the internationalization of trade, including our own profession of accountancy:

·         The importance of Global Regulatory Convergence

·         The importance of International Standards for our profession

·         The importance of facilitating the operation of our profession across borders, as demonstrated by APECs recent Accounting Services Initiative

We are lucky to be part of a profession that we can truly refer to as global. We must take advantage of that for the benefit of all accountants around the world, and we must take advantage of that to demonstrate leadership on a whole range of matters impacting our economies and our people.

I wish you well for the rest of the Forum and Congress.

Thankyou.