AFA Meeting with IFAC Leadership

The Malaysian Institute of Accountants (MIA) was the proud host of the International Federation of Accountants (IFAC)’s annual board meeting, which was held in Kuala Lumpur from 8 – 12 September 2008. The IFAC delegation was led by IFAC's president, Juan Jose Fermin del Valle and deputy president, Robert Bunting.

This was the first time the IFAC Board Members were convening in Kuala Lumpur and provided a rare opportunity whereby the top brass of IFAC would all be in this region at the same time. Under the realization that other regional professional bodies would also be eager for an opportunity to meet with the IFAC management, MIA proceeded to organise some events to that effect.

On 9 September 2008, MIA hosted a dinner between IFAC officers and the ASEAN Federation of Accountants or AFA. AFA is an amalgamation of the ASEAN region’s professional accounting bodies and was created with the objectives to be the organisation of ASEAN accountants for their further professional advancement and that of the accountancy profession in the region. The dinner was attended by Mr del Valle, Mr Bunting, IFAC CEO, Mr Ian Ball and Director of Quality Assurance and Member Body Relations, Mr Russell Guthrie as well as the AFA council members who were led by AFA President, Pengiran Haji Moksin. The dinner was also graced by the presence of Mr Kamlesh Vikamsey, president of the Confederation of Pacific and Asian Accountants (CAPA). This dinner was held to give AFA a chance to present themselves to IFAC as well as being a session during which the dinner guests from IFAC, AFA and CAPA could get acquainted prior to the IFAC Meeting with Regional Accountancy Bodies the next day.

The IFAC Meeting with Regional Accountancy Bodies was held as a breakout session to be held in conjunction with the IFAC Seminar going on at the time. For this event, MIA invited the leadership of the primary AFA members, representatives from CAPA who were attending the IFAC Board Meeting as well as MIA’s own council members for a dialogue session with Mr del Valle, Mr Bunting, Mr Ball and Mr Guthrie. CAPA was invited as their organisation represents national accountancy organisations in the Asia-Pacific region and its geographical area spans half the globe.

This dialogue was held with the intention of providing an avenue for the regional bodies to meet up with IFAC and discuss and understand issues affecting the profession both regionally and globally. It was also an opportunity for the bodies present to examine any possible areas of collaboration.

In his opening remarks, Mr del Valle stated that they (i.e, the IFAC leadership) were there to listen to the participants and answer any and all questions posed to them. He also stressed the importance of IFAC leadership having personal contact with the profession’s leaders from around the world and that “the key driver to success is to collaborate”. IFAC has its mission and goals but in order to successfully carry out their strategic plan, there will need to be alignment between all the member bodies. Most importantly, the main goal of the day was to figure out issues in this region and figure out how AFA and CAPA, in conjunction with IFAC, can work together to solve these issues.

One of the issues which elicited the liveliest discussion was on ‘standards’. There were some questions as to the level of accounting quality across Asia; seeing as not all AFA members are IFAC members; and the steps AFA is taking to rectify that. In response to that, AFA President, Pengiran Haji Moksin, explained that AFA is currently working towards a convergence of standards and elaborated a little on the AFA Strategic Plan which will chart AFA’s course for the next 2-3 years. AFA Vice-President, Nik Mohd Hasyudeen, added that AFA faces certain challenges in that ASEAN countries are in such differing stages of development. However, AFA is aligning their resources and employing better coordination with Malaysia volunteering as AFA Project Coordinator.

CAPA President, Mr Kamlesh Vikamsey opined that nowadays businesses are all coming together, the world is becoming a global village and accountants need to align themselves to this idea. Convergence of standards is necessary and accountants need to get together or risk being left behind.

On this issue, Professor Kesree Narongdej from the Federation of Accounting Professionals (Thailand) voiced out her concern on whether it is possible to have one global standard that will work with all the different countries and myriad of laws. She suggested instead, a principles-based set of standards might be better. She also voiced out her ire that the world accountancy standard setting body doesn’t seem to take note of any comments or suggestions that come from this part of the world.

Stemming from that issue was AFA’s request to be recognized as a regional body under IFAC, so that they might be better heard among the international accountancy fraternity. Mr Bunting shared his experience during which he’d noticed that aside from the official organizations, he’d noticed that there are many organisations that are put together to address needs that IFAC cannot meet.
These groups are important, regardless of their formal status under IFAC, because they share certain issues and as a group, when they voice those issues to IFAC, IFAC can hear them better. Mr del Valle continued with the fact that IFAC thinks it is extremely important that AFA exists, meets regularly, finds their common issues and bring those issues to IFAC. It is unlikely for IFAC to recognise AFA as a ‘regional accountancy body’ because IFAC is keeping the number of regional accountancy bodies as low as possible to avoid duplication of efforts and increase efficiency within regions.

Mr del Valle urged AFA to not think of not being an IFAC formal regional body as a snub and stressed that IFAC wishes very much to have AFA very close to IFAC, in whichever way the AFA leadership sees fit; either as an informal organisation or as an acknowledged accounting grouping. Mr Bunting suggested that AFA nominate one of theirs to a committee which holds great importance to them (perhaps, such as the SME committee) and support that nominee. In this way, AFA would get greater influence within that committee to get the results they want.

Mr del Valle also expressed his desire to see the leadership of AFA and CAPA achieve a permanent state of dialogue between them. This view was backed up by CAPA Deputy President, Dr In-Ki Joo, who believes that better communication between the two bodies will beget increased efficiency with which the two bodies will be better able to present themselves to IFAC.

IFAC leadership also acknowledged that to be a member of both IFAC and the relevant regional organisation might be too much a burden for some of the countries and agreed that there needs to be a relook on a fee structure to encourage participation from these countries.

Mr del Valle ended with an invitation to AFA member bodies who aren’t yet IFAC members to join IFAC and reiterated the issues that are troubling the member bodies in the region. He also thanked the Malaysian Institute of Accountants for their initiative in organising this event.