26th Session of Intergovernmental Working Group

Report on 26th Annual Session of Intergovernmental Working Group of experts on intenational standards of accounting and reporting  UNCTAD

7-9 October, 2009

Geneva, Switzerland

Personnel of the Agency on regulation of activities of the Regional financial centre of Almaty city (Turysbekov D. and Adilova Zh.) took part in the 26th Annual Session of Intergovegnmental Working Group of experts on international accounting standards UNCTAD (United Nations Conference on Trade and Development).

Integovernmental Working Group of experts UNCTAD on international accounting standards (IAS) deal with considering questions of applying international standards of financial reporting (ISFR). This work is carried out in the context of extensive application of ISFR during the last years in the framework of IAS mandate on promotion of unification of accounting on international level. The work of IAS in this area covers issues concerning institutional and regulation framework, mechanisms of practical application and technical aspects. The given work is directed to help developing countries and countries with transition economy in their efforts on practical application of ISFR. It is based on application of leading practice and information, that follows from practical experience of countries that use international standards of financial reporting.

Financial crisis focused attention on standards of accounting what in its turn shows growing acknowledgement of significance of accounting in formation of global financial and economic stability. That is why "Accounting standards" was the main theme of numerous discussions, recommendations and consulting the target group in different levels. 

In the course of session there was declared that the main reasons of the crisis were incompetent crediting decisions, inadequate systems of risk-management, and non-transparent financial instruments. It is obvious that accounting standards and requirements to informationa discosure will play critical role in establishment of managment system and transparency that will help to avoid such financial shock in future.

Experts discussed recent developments in the area of the IFRS practical implementation in the aftermath of the financial crisis.

In particular, they discussed major institutional and technical challenges that evolved during the financial crisis and that need to be addressed to strengthen governance and efficiency of the international standard-setting process and quality of financial reporting.

Ways of improving coordination between regulators and standard-setters, as well as between other participants of the reporting chain, including audit aspects, was also discussed.

Fair value measurement as one of most challenging matters in the area of IFRS practical implementation was also discussed.

Experts reviewed current requirements of IFRS regarding fair value measurement and debated some of most significant challenges in fair value application that have risen during the financial crisis.

The experts also discussed corporate governance and disclosure in the wake of the financial crisis, with particular attention to risk management systems and executive compensation, and new disclosure rules related to these topics. They made review on current implementation of corporate governance disclosure in emerging markets.

The Program of the 26th Annual Session of Intergovernmental Working Group of experts on international standards of accounting and reporting UNCTAD

1. Elections of functionaries

2. Adoption of agenda and organization of work

3. Review issues of practical application of international standard financial reporting

4. Other issues

5. Preliminary agenda of the twenty seventh session

6. Approval of the report

According to the article 1. Elections of functionaries

In accordance with the routine practice of Intergovernmental Working Group of experts on international standards of accounting and reporting it is suggested to elect the Chairman and Deputy Chairman-Speaker. This year as the Chairman of the 26th session was elected Syed Asad Ali Shakh.

The first plenary meeting covered procedure issues (points 1 and 2) and consideration of point 3. Posterior meetings were devoted to detailed discussion of the point 3 of the agenda and consideration and detailed discussion of point 4.

Speakers:

Julie A. Erhardt (US Securities and Exchange Commission);

John Hegarty (World Bank);

Remo Croci (European Comission);

Michael Stewart (IASB);

Nicolas Veron (Bruegel);

Paul Thompson (IFAC).

According to the article 3. Review of practical implementation issues of IFRS

During the final meeting of the fifth session IAS adressed the secretary of UNCTAD with the request to conduct researches devoted to the issues ISFR practical application.

Speakers:

Veronika Poole (Deloitte, Great Britain);

Michael Stewart (IASB);

Christian Dreyer (CFA Institute)

Fabio Da Costa (FUCAPE Business school, Brazil);

Jim Osayande Obazee (Nigerian Accounting Standards Board).

According to the article 4. Other issues

According to this item there was considered strengthening of the potential of small and medium enterprises in the area of accounting and reporting6 and the latest results of researches and predictions concerning disclosure of information on corporate government and reporting on the issues of corporation responsibility.

P.4 (a). Accounting and financial reporting for SME.

There was conducted a review of the events in the sphere of accounting and financial reporting of SME. Particularly new ISRF for SME and main problems in application. There was also considered methods of accounting in SME with the purpose of experience exchange, providing with information on practice of quality improvement and reducing expences on accounting and reporting of SME.

Speakers:

Paul Thompson (IFAC);

Richard Marti (АССА);

Saskia Slomp (FEE);

Vickson Ncube (ECSAFA).

П.4 (b) . Capasity building in accounting and reporting.

One of main pillars of UNCTAD activities id the area of technical assistance. In the past UNCTAD carried out a number of technical assistance projects on building capacity in accounting and reporting in number of countries. This pannel discussed main challenges that countries currently face in this area and what kind of assistance they may need to address these chalenges these challenges to facilitate their compliance with the international requirements in reporting. It will aim to identify priority areas where UNCTAD/ISAR can assist member states in building technical and institutional capacity jointly with relevant donor agencies.

Speakers:

Bill Phelps (CARANA Corporation);

Gregory Elders (Global Reporting Initiative, The Netherlands);

Ashraf Gamal El-Din (Institute of Directors, Egypt);

Elizabeth Adegite (Accountancy Bodies in West Africa).

P.4 (с). Corporate governance disclosure.

The panel reviewed the current status of corporate govrnance disclosure in emerging markets and discussed the impact of the financial crisis on corporate governance disclosure.

Speakers:

UNCTAD secretariat (Presentation of 2009 CG survey);

Kevin Campbell (University of Stirling, Great Britain);

Saira Nasir (Institute of Chartered Accountants of Pakistan);

Jackie Cook (Fund Votes, Canada);

Alexander Berg (Corporate Governance Department, World Bank).

P .4 (d). Environmental and corporate responsibility reporting

The panel reviewed the current status of environmental disclosure among TNCs, with particular focul on climate change related disclosures. It will also provide feedback on the practical use of ISAR's guidance on corporate responsibility indicators by discussing a case study of reporting in Brazil.

Speakers:

Nancy Kamp-Roelands (Ernst & Young, The Netherlands);

Marcelle Corales (Universidade de Fortaleza, Brazil).

Paul Thompsin (IFAC);

Vickson Ncube (ECSAFA);

Saskia Slomp (FEE);

Lois Guthrie (Carbon Disclosure Standards Board).

P. 5. Provisional agenda for the twenty-seventh session

P. 6. Adoption of the report 

Intergovernmental working group of experts approved agreed conclusions. The conclusive report will be made under the direction of the Chairman after the session. It will be presented to the second session of the Comission on investments, enterpreneurship and development for 2010.

In the course of the session the personnel of the Agency conducted meetigs with representaties with International federation of accountants (IFAC), Commitee on International Accounting Standards, and World Bank. In the course of stated meetings there was made presentation of RFCA, discussed problems financial information disclosure by listing companies and other issues.

Besides that in the framework of the meeting held with the representatives of the Head office of ACCA there was considered suggestion on accreditation of RFCA Academy in this organization as the educational centre for the countries of Central Asia on programs of ACCA. This suggestion received support and there will be presented detailed list of requirements of ACCA to the accredited organizations.