ISAR Update News Letter January 2013
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UNCTAD/WEB/DIAE/ED/2012/6
The thirtieth anniversary session of UNCTAD’s Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) will be held at the Palais des Nations in Geneva from 6–8 November 2013. The session will deal with two main agenda items. The first agenda item will be a continuation to ISAR’s current work on key foundations for high-quality corporate reporting. Under this topic, the session will review feedback from countries that applied the UNCTAD-ISAR Accounting Development Tool. It will also address human resources development challenges in the context of achieving high-quality corporate reporting. The second main topic will focus on a review of good practices in sustainability reporting and regulatory and stock exchange initiatives. On 5 November 2013 a technical workshop will be conducted in conjunction with the thirtieth anniversary session of ISAR. Various activities will be conducted during this time to commemorate the thirtieth anniversary session of ISAR. On 26 November 2012, the Chair of the twenty-ninth session of ISAR, Mr. Jim Osayande Obazee presented reports on the twenty-eighth and twenty-ninth sessions of ISAR to the fourth session of UNCTAD’s Commission on Investment, Enterprise and Development. In his report to the Commission, Mr. Obazee highlighted the critical importance of high-quality corporate reporting for fostering a stable economic environment and in this respect the importance of the work that ISAR had been conducting in this area during its twenty-eighth and twenty-ninth sessions. He reminded delegates at the session to advise the UNCTAD secretariat if their respective countries wished to participate in applying the Accounting Development Tool that ISAR has been developing over the past three years.
ISAR held its twenty-ninth session at the Palais des Nations in Geneva from 31 October to 2 November 2012. The main agenda item of the session was focused on regulatory and institutional foundations for high-quality corporate reporting. The session also considered additional topics such as sustainability reporting and corporate governance disclosure. Several regional and other international organizations that deal with accounting and reporting matters updated the session on their respective activities conducted during the intersession period of ISAR. At the opening of the session, delegates elected Mr. Jim Osayande Obazee (Nigeria) as Chair and Mr. David Szafran (Belgium) as Vice-Chair-cum-Rapporteur of the twenty-ninth session.
The Chair of the Trustees of the International Financial Reporting Standards (IFRS) Foundation, Mr. Michel Prada, delivered a keynote address at the opening of the session. He highlighted the remarkable progress that had been made with respect to the number of countries that had adopted or were in the process of adopting IFRS since the International Organization of Securities Commissions endorsed the standards in 2000. In relation to activities undertaken to strengthen the institutional base of the international standard-setting process for financial reporting, he noted that the IFRS Monitoring Board – consisting of major public authorities that supervise securities markets – was established in 2009. He also noted that the Board of Trustees and the IFRS Monitoring Board conducted a strategy review and published their reports jointly in February 2012. He discussed the support for emerging markets that the IFRS Foundation had been providing, IFRS for small and medium-sized enterprises (SMEs) and related education initiatives and considerations by the United States Securities and Exchange Commission with regard to the possible application of IFRS by issuers of instruments based in the United States of America. He underscored that while much had been achieved in recent years, much more was required, and that the support of UNCTAD-ISAR was very important to the IFRS Foundation.
The main agenda item of the twenty-ninth session of ISAR dealt with the regulatory and institutional foundations for high-quality corporate reporting. The topic focused on the first two pillars of the Accounting Development Framework. Furthermore, the Group of Experts reviewed findings of country pilot-tests of the Accounting Development Tool that were conducted in Brazil, China, Côte d'Ivoire, Croatia, Mexico, the Netherlands, the Russian Federation, South Africa and Viet Nam. The Group of Experts concluded its deliberations on this agenda item by agreeing that the Accounting Development Tool was very useful for assisting member States in assessing their respective regulatory, institutional, human capacity arrangements and capabilities, facilitating stakeholder dialogue, identifying gaps by benchmarking against globally recognized standards and codes. The session also recognized the usefulness of the Accounting Development Tool for improving a country’s investment climate as well as for developing a strategic approach and a roadmap to addressing the gaps identified, measuring progress in a comparative and consistent manner and ultimately achieving high-quality corporate reporting. In this respect, the Group of Experts has requested UNCTAD to continue its work on the Accounting Development Tool, including the online portal, and gather feedback from country assessments on the application of the tool.
With respect to sustainability reporting, the session discussed the increasing demand for sustainability reporting and noted the influential role that stock exchanges can play in promoting high-quality sustainability reporting through listing rules and voluntary sustainability indices. In concluding its discussions on sustainability reporting, the session agreed on the need for further analysis and deliberations on sustainability reporting. It also requested UNCTAD to continue contributing to the field of environmental reporting.
The discussion on corporate governance disclosure focused on a country case study of Jamaica and updates from Trinidad and Tobago on capacity-building efforts in that country, sparked in part by its 2011 study on corporate governance disclosure. The session requested UNCTAD to continue providing technical guidance to countries that wish to produce additional standardized country case studies using the ISAR benchmark on good practices in corporate governance disclosure.
On 30 October 2012, UNCTAD and the Education Initiative of the International Financial Reporting Foundation organized a joint education forum. The event featured globally recognized experts in the area of accounting education. During the first segment of the forum, panellists discussed approaches to incorporating into a curriculum the issues of international accounting, auditing and other related standards and codes of corporate reporting. The second segment of the forum was dedicated to a discussion and demonstration of a framework-based approach to teaching International Financial Reporting Standards (IFRS) for property, plant and equipment. Further information on this event can be accessed by clicking here.
At the twenty-ninth session of ISAR, delegates heard a lot about paragraph 47 on sustainability reporting in the outcome document of the United Nations Conference on Sustainable Development (Rio+20) in June 2012. ISAR delegates at the twenty-ninth session heard presentations from UNCTAD, OECD, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council and others. Deliberations focused on important recent developments in the area of sustainability reporting. After Rio+20, four member States – Brazil, Denmark, France and South Africa – banded together to form the Group of Friends of Paragraph 47, to promote the further development of sustainability reporting.
On 16 October 2012 the UNCTAD secretariat made a presentation on the ISAR Accounting Development Tool (ADT) to a regional meeting of the Commission de normalisation comptable (Accounting Standards Board) of the Organization for the Harmonization of Business Law in Africa (OHADA) which took place in Cotonou, Benin. The event brought together delegates from 15 countries members of the organization, in presence of its Permanent Secretary, H.E Dorothé Sossa. Delegates from Benin, Burkina Faso, Cameroon, the Central African Republic, Chad, Comoros, the Republic of the Congo, Côte d’Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Niger, Senegal and Togo learned about the benefits in using the ADT. Côte d’Ivoire presented the challenges faced and the benefits obtained in self-assessing its national architecture using the ADT. Further cooperation between UNCTAD and OHADA is envisaged in the near future. Established in 1993, OHADA is a pan-African organization which aims to establish a uniform legal framework governing business activities in seventeen African economies. News briefs: Financial Stability Board reports to the Group of 20 on progress of financial reforms The Chair of the Financial Stability Board (FSB), Mark Carney, presented a report to the Group of 20 Ministers and Governors on 4–5 November 2012 on progress in the financial regulatory reform programme. In relation to convergence of global accounting standards, the Chair indicated in his report that the FSB had reviewed developments in the effort between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) of the United States of America to converge accounting standards. He noted that while the two Boards had made progress in certain areas, including their plans to more closely align their approaches to the classification and measurement of financial instruments, they were beginning to diverge in the important area of the impairment of financial assets. He further noted that the FSB would request, by no later than the end of June 2013, a joint IASB-FASB report on all outstanding items with a specific timetable for completion. Further information on this news item can be accessed by clicking here. On 15 November 2012, the International Financial Reporting Foundation inaugurated its first regional office in Tokyo. The IFRS Foundation indicated that the Tokyo office would provide it with a local presence in the Asia-Oceania region, supporting greater regional outreach and participation in IASB standard-setting activities. The regional office is also expected to develop into an important regional research hub, thus ensuring that conceptual input from the Asia-Oceania region is fed directly into the IASB’s due process and at an early stage. Further information on this news item can be accessed by clicking here. |