Everyone’s got an opinion on the pledges made by world leaders at this week’s G20 summit, but what does the accounting community think? Gina Dyer rounds up some of the comments so far and encourages members to add their own thoughts below.
To read the full G20 communique for yourself, click here [1]
Ian Ball, chief executive, International Federation of Accountants (IFAC)
“We support the G20 in building a reformed international financial system. The accountancy profession will have a vital role to play moving forward and IFAC will continue to emphasize the measures we suggested in our recommendations to the G20 last week".
Among IFAC’s recommendations were the adoption of International Public Sector Accounting Standards (IPSASs) in all jurisdictions and the provision by the G20 of sufficient resources to develop and disseminate implementation guidance for the global standards they support. IFAC also proposed:
IFAC is developing a further set of recommendations that builds on the proposals in the G20 Communiqué.
Helen Brand, chief executive, ACCA
“The G20 resulted in largely positive reactions from business leaders around the world. There were strong messages about global co-ordination and regulation. But there was no firm plan announced to deal with the billions of dollars of toxic assets clogging up the global banking system, although leaders did agree that there should be a global common approach to tackling them. And probably because it is such a complex issue, details about the regulation of hedge funds were missing.
While we welcome the establishment of the Financial Stability Board, we do not yet know how it will work. It is crucial that reforms regarding the way the financial services sector is regulated forestall future crises, rather than simply focussing on past failings. We need a system where sound regulation, supervision and good corporate governance reinforce each other.
ACCA is also disappointed that there was very little mention of the environment, or of measures involving investment in a low-carbon economy. We believe that the twin crunches of climate and finance have lead to a unique and incredible opportunity to re-build global markets with systems sympathetic to climate change, that value societal and environmental costs and that are sustainable in the truest sense,. It was a missed opportunity by the summit leaders not to place sustainability central to its plans".
Michael Izza, chief executive, ICAEW
“As we have seen with the current crisis, transparency and comparability are incredibly important commodities. International financial reporting standards epitomise the principles of the G20 summit. They are a real and practical example of a global approach to tackling global challenges".
Marcus Sephton, head of regulatory services at KPMG UK
"While the G20 proposals on financial regulation are sound, constructive and provide invaluable direction, real change will not be effected unless there is firm and unambiguous international cooperation. A lack of global co-ordination and consistency of approach across countries opens the door for significant regulatory arbitrage and, potentially, the great danger that we begin to retreat from the results of 20 years of good work towards harmonisation. Global businesses will continue to struggle with the sheer complexity of dealing with different governments and multiple regulatory frameworks, which may, in fact, have the unintended consequence of increasing risk for these firms.
“There is a great deal of detailed drafting of regulations and legislation to be effected. This will have to be done with both great care and real speed in order to get it in place in time for the end of the recession. In the meantime, firms will seek evidence that counter cyclical regulation applies in a recession as well as being drafted to cap off over exuberant booms.”
Richard Murphy, adviser to the Tax Justice Network, and the TUC on taxation and economic issues and director of Tax Research LLP
“There is no doubt – April 2 2009 is a very important date in the process of ending tax haven abuse. It will go down in the history of that campaign. But it is not the day when the end of tax havens and banking secrecy was announced. It was the day the process really started, and that process will need a lot of work and thought before it delivers the results we want”.
Miles Saltiel, financial analyst, Adam Smith Institute
"The G20 leaders are more concerned about their domestic problems than their international responsibilities. They turned up in London for a photo opportunity. Their talks convey a sense that there is little they can do to change events, and they are right. Eventually, the world economy will trade its own way out of the current confusion, as it always does".
David Woodgate, chief executive, Institute of Financial Accountants
"The Institute of Financial Accountants (IFA) are in full agreement with the objectives that were outlined by the G20 Summit on April 2nd in London. The proposals which endorse global financial regulation and improve the transparency of the international financial system are consistent with the thinking behind the IFA’s new International Policy Group".
Jeremy Newman, CEO, BDO International
"The statement from the G20 summit called on the accounting standard setters to 'work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards'.
It was probably inevitable that the G20 would believe that these standards need to be 'improved', but encouraging that they have asked the standard setters to do so (hopefully free from political interference); and very encouraging that they still support the ambition to achieve a single set of high-quality global accounting standards".
Have we missed your organisation out? Send us your organisation's official comment to be added onto this feature: editor@accountingweb.co.uk. Alternatively, if you're a member and would like to have your say, please feel free to add your comments below as usual.
Links:
[1] http://www.londonsummit.gov.uk/resources/en/PDF/final-communique