Accounting ExpertSpeak: Right decisions can be taken only if credible information is held
Olivia Kirtley, President of the International Federation of Accountants (IFAC), spoke to AfricaMoney on the importance of the accounting profession as the foundation of a robust economy. Our accounting expert noted that it is availability of credible information that promotes transparency and good governance, and leads to successfully combating corruption as well as enhanced decision-making capabilities.(Image: Wazna Gunga)
Edited excerpts from an exclusive interview:
Can you please tell us about the objectives of the IFAC, the role it plays for the accounting profession and how it helps countries?
IFAC is a global organisation for the accounting professional and our membership comprises national accounting bodies, under which we provide support and guidance to them in discharging their accounting duties towards their country. Further, some of our bodies are global, such that IFAC supports ethical standards, accounting education, and auditing in private sector accounting.
Moreover, another function we perform is that of advocacy for accounting professionals around the world. In Africa, we focus on capacity building in the accounting profession, as this is the need of the hour for the emerging continent. It may be noted that as many as 40% of African countries do not have accounting professionals and it is not possible to lay down sound foundations of a strong economy without the availability of proper information to make good decisions for citizens and shareholders.
Overall, accounting is the foundation is of any robust economy and good decision-making, and one of our key objectives is to help accounting firms in countries.
What are the IFAC projects that are underway across different countries?
We have a grant from the UK government to help to strengthen certain countries in Africa where we are selecting foundation organisations that can be strengthened, for which we employ resources to build up a better organisation. There are several factors that combine to make a successful accounting professional such as better education, adherence to national standards, abiding by ethics. To be able to continue education, foster discipline and implement rules, proper infrastructure is required to bolster accounting professionals.
Till date we have selected three countries — Ghana, Uganda and Rwanda —and more countries will be added to the list soon.
It is not just IFACs doing but we are also partnering with ACCA and ICAEW, among others, and we are trying to be complimentary rather than competitive. Our common role is to achieve the best outcome, that of a strong and robust accounting organisation which supports accountants within their country.
In your view, how far is the African continent up the curve in the accounting sphere, and how long a way does it still have to go?
The key challenge is to increase the number of accountants, we call that capacity building. There are about 100,000 accountants in Africa for 1 billion people, 75% of those are in two countries, and the remaining 25,000 accountants are for all over the rest of the African countries, which is a very minuscule number.
The challenge to educate and empower accountants to do their work through training and this is not just for accounting firms and auditors but also public sectors accountants as they all grow the economy to be successful and therefore capacity is one of the major challenges we are facing.
As a financial gateway to Africa, does Mauritius enjoy a higher level of maturity in financial services in general, and the accounting space in particular? Your views please.
Mauritius is long way ahead of many African countries, though South Africa and Nigeria are also in a good position. However, Mauritius does enjoy a special place in terms of accounting professionals in particular and financial services in general.
However, there is always more that can be done and the main challenge accountancy organisationsare facing is that the charge allowed on members by law is very nominal, thus making it difficult for organisations to deliver services to support accountancy.
The focus is not only is to be global but also helping to make the government understand that it does take more financial resources than the amount the law allows in order to build a strong accountancy organisation and it is a constraint that Mauritius is currently facing.
However, given these constraints, Mauritius is still doing a good job with strong leaders and Mauritius as a gateway to Africa has an important to play.
What do you have to say about corruption in Africa?
If you go back and see, accounting and accountability is the foundation for fighting corruption. Transparency is key to accounting and accounting professionals shed light on real numbers that empower people to make good governance possible as availability of credible information will help realise proper distribution of resources. It is accounting that gives people access to the right information.
Therefore, accounting is a key tool to combat corruption and poverty, and helping the economy to use public funds in a proper way.
Finally, is there anything you want to highlight about the currently ongoing ACOA conference?
The ACOA conference has been a high quality event that has created a lot of energy and discussion among participants with the many good ideas that have emerged. Hence, participants can walk away with action items and plans you can really implement. This conference involved high quality dialogue and answered crucial questions.
-By Wazna Gunga