Helen Brand is the Chief executive of the Association of Chartered Certified Accountants (ACCA), a global accountancy body with over 150 thousand members and 430 thousand students in 170 countries. Here in Sub-Saharan Africa, it has 10,500 members and 83 thousand students. Capital’s Elias Gebreselassie talked to Helen about the role the association in the global economy.
Capital: What do you think the global economy will be like in the near future?
Helen: Obviously we are in very uncertain times, and have been for a number of years. Particularly due to the euro zone crisis, what we do know and what we can predict is that good financial management is more critical for businesses now than ever before. Because not only do they have to reduce cost and stay viable in the current environment, they also have to be planning financially for the long term and to be a sustainable business in the future. So in these turbulent times the skills that a professional accountant brings to business are particularly very important.
Capital: What are the major challenges accountants face today?
Helen: One of the big challenges is the convergence of global standards International Financial Reporting Standards (IFRS); financial reporting standards and international auditing standards. We believe strongly at ACCA that greater convergence of those standards will help the global economy by providing greater transparency and consistency in financial reporting around the world. But that is a challenge; there are some individual regimes particularly in the United States that have maintained a different path so far. So I think, that’s one of the challenges the profession, another challenge would be the regulation. There has been more regulation because of the financial crisis. However it has not necessarily led to more effectiveness so I think efficient regulation is the key to success.
Capital: Martin Turner, Vice President of ACCA just visited Rio de Janeiro, for a meeting ahead of the Rio+20 summit, what was his role there and what is ACCA’s view on sustainability?
Helen: ACCA has been involved in environmental and sustainable reporting issues for well over 20 years now. This is because we believe that if you can’t measure it and report it, you can’t manage it; and therefore the natural resources we have in the world need to be measured and reported on just as the financial resources that we have in the world. So the way in which companies report on their impact on the environment and the sustainable nature of their business is extremely important. So Martin was in Rio for the meeting of the Sustainable Security Exchanges Organization to discuss how sustainability can be embedded into corporate reporting globally and he was promoting that concept. And I’m pleased to say one of the positive things that did actually happen in Rio was that it was agreed that sustainability reporting should be embedded in corporate reports.
Capital: How can businesses deal with risk on an international stage?
Helen: These days, the biggest risk is not operating internationally because that’s where investment will come from. That’s where the opportunities lie, in expanding your business and tapping into new markets. What makes it risky is if you don’t have the sound financial information framework to do that, so management of risk is a very important role now for professional accountants. Assessing what those risks are, and ensuring that you base your program or expansion or investment on very sound financial information, so I think planning, that understanding of the markets is going to be critical for Ethiopian businesses as they seek to operate more internationally and to attract investment into that country.
Capital: Generally what do you feel the profession holds for Ethiopia?
Helen: There are three elements of professional accountants: examinations, experience and ethics and they’re equally important. Of course you need the core technical competence covering financial reporting, auditing, and management accounting all of which is risk management, all contained within an ACCA qualification. But you also need to have that practical experience, so you cannot become a member of it until you have applied your knowledge in the workplace for at least three years. So using that technical information, that you’ve brought about and finally and most importantly the ethical dimension so, professional accountants are committed to a professional code of ethics and in the ACCA’s case that’s applied globally to all our members. And that’s a badge of trust to the public; that the individuals that hold the ACCA qualification will behave in an ethical manner, and what that promotes is good governance within business, so that the professional accountants should be the guiding conscience of business, and only behave in an ethical manner with the resources of that business and in the interest of the wider stakeholder community.
Capital: In terms of the African continent, what do you see as prospects of professional accounting in general, and what do you see as its hopes and challenges?
Helen: ACCA’s council is its governing body which is 36 members drawn from 17 countries around the world, met in Nairobi this weekend. The reason we’re here is because Africa is open to business, and the huge potential that exists within Africa, means there’s a huge potential for the accountancy profession also. So, what we wish to see is that the hope and expectations of the African economy are made sustainable through the development of the accountancy profession that will support that growth. So, we think it’s very exciting, the challenges will come around regulation, standards and the consistency of the application of that regulations standards throughout the African continent because that will allow the profession and the economy to play its proper role within the global stage.
Capital: Is there a set of rules certified accountants should follow?
Helen: ACCA has promoted for a long time, the IFRS which are promulgated by the International Accounting Standards Board (IASB) and also the international standards in auditing which are promoted by the IASB. So there are already international standards in the accounting world, I think the big challenge for a nation is not simply adopting those standards but applying them and having the capacity in terms of the accountants who actually understand those standards to apply them in business and in government, so the public sector accounting standards are equally important in terms of the transparent reporting of governments. A lot of the crisis we see currently in the euro zone is not directly linked to the banking crisis, its linked to the sovereign debt crisis, and how governments manage their resources so there are huge lessons for many parts of the world but you can only manage those environments if you have the right information and having the right information comes from having the right reporting standards.
Capital: Ethiopia does not have as many certified accountants as other countries, what are the most important factors in developing professional accountants?
Helen: Yes, the role of ACCA as a membership body is to obviously support our own members and students, but also to develop the wider profession. We are involved in many projects with the World Bank (WB), the African Development Bank (AfDB), the Asian Development Bank (ADB) and they see the development of the accounting profession as an important factor in the development of the entire economy. So, we do play a role there, we also undertake a large amount of research and insight so that’s understanding from a global perspective. We look at policy issues and how we can evolve, whether its corporate reporting the future of audits, and sustainability reporting ACCA collects a lot of data, a lot of information and does its research and then we hold seminars like the one we held in Addis Ababa on Monday about the role of the profession in emerging economies to discuss that research and to disseminate our findings. So we very much have that role of public education.
Capital: You have had a privilege of seeing both the developed world like United Kingdom (UK) and the developing world’s accounting practices. What do you see as the difference and the set of challenges facing accountants or accounting firms in both these worlds?
Helen: The first thing to say is quality of members is one quality, so it’s a single qualification that we have worldwide. Our members whether based in London, Hong Kong (HK), Beijing, Johannesburg have come through the same qualification so, in that respect they’re equipped with the same information and knowledge and skills. But of course the challenges vary according to the type of business they’re in, according to the type of economy they’re in so, they might be a management accountant within a multinational corporate or they might be an auditor within a small practice or within one of the big four practices in the world. So, these are the sectoral differences that can create different challenges, in terms of emerging economies versus developed economies, I think it’s really the understanding of the role of the professional accountant which is may be more of a challenge, some of them are emerging economies. Accountants can play a much broader role; they’re your business partners and they will be the CFOs and the CEOs of future successful businesses.
Capital: What joint projects are you working on with major financial institutions?
Helen: Well, for example in some countries in central and eastern Europe we’ve assisted in the adoption of the IFRS training programs to promote its development and understanding to existing accountants. In other instances within the sub-Saharan Africa we’ve undertaken a program in cooperation with the regional accounting profession to develop practice monitoring, so that’s monitoring quality of auditing firms within many countries within sub-Saharan Africa where ACCA has been contracted to do work on behalf of the national profession but at the same time transferring those technical skills to the national profession so that they can undertake that work themselves in the future. And we’ve also undertaken work in terms of constructing qualifications for national bodies. Interestingly this is in the developed economies, Singapore ACCA is currently under contract to develop the national qualification there, which will be post-graduate professional qualification, for the regulator in Singapore, so those are the types of activities we undertake.
Capital: What about in Ethiopia’s case?
Helen: At the moment obviously ACCA has its own office here in Ethiopia, which we work with a number of stakeholders be it employers, the national profession and others. But the WB has proposed and also the AfDB is proposing some projects to develop the accounting profession, we will be bidding for those projects as part of the normal transparent bidding process.