IFAC at 30: the world's accountant

Fermin del Valle, partner in Deloitte Argentina and President of the International Federation of Accountants, is in town. And John Prosser is hoping it won't rain

We are meeting in the open, attractive courtyard of his hotel, but the London sky is lowering and the weather prospects do not look good.

But Fermin del Valle is full of good humour. He is visiting the UK to give a keynote address to a gathering of European accounting leaders at an event hosted by ACCA at its London headquarters and, as he emerges into the hotel lobby, I recall my first glimpse of the new President of the International Federation of Accountants (IFAC) as a distant figure on the podium of a vast conference hall at the 2006 World Congress of Accountants in Istanbul. There he made a robust attack on world inequality and poverty. Chairing a session on Generating Economic Growth and Stability Through the Accounting Profession in Developing Nations, he highlighted the opportunity for professionals to play their part in securing a better future for the societies in which they lived, and that corruption, 'development's worst enemy', must be rooted out.

When I remind him of his Congress speech, he responds: 'I am totally convinced that the accountancy profession is essential for the functioning of the economy. You cannot imagine any economic activity, even for very small companies, that can be performed without the assistance of one or more accountants. When you have an organised and developed accountancy profession, you are in a better position to have not only economic growth but also social and cultural development. This was the idea I tried to present at the World Congress. In many countries, there are development programmes which need good management without corruption and, in this context, the accountancy profession has an important role. We cannot be the only ones fighting against corruption, but if we have a clear position in favour of transparency as a profession, we will be in a better position to encourage others to follow.'

It is a significant year for IFAC, which celebrates its 30th anniversary with a series of events, under the banner of World Accountancy Week, in December. Del Valle is clearly enthused by, and passionate about, the progress IFAC has made since its inauguration in Munich in October 1977, when the original foundations were laid by 63 member signatories, for an organisation which today stands as an international representative body, with 155 member organisations, operating both as a regulator and ambassador for the profession worldwide.

So how is IFAC doing? 'In terms of convergence I think that we are working very well. I would say that there is no other international organisation that is doing what IFAC is doing in favour of convergence.' He adds with a grin: 'We are working for the convergence of accountancy standards even more than IASB, and IFAC's compliance programme is a real success in terms of the commitment of the participating countries. We are now asking each country to prepare an action plan to fill in the gaps between the current situation and what we need to achieve.

'I once said that before 2010 we would get full convergence. I have to say that when I said that, I didn't imagine that the SEC [Securities and Exchange Commission] would announce a consultation paper to see if US companies could present information under IFRS as an alternative to US GAAP. The process has become more accelerated than we could have imagined.

'We are also working very well in terms of collaboration. Collaboration, for me, is the key to success for the profession. The accountancy profession has a value that we have probably not realised. We have a single global accountancy organisation and a very interesting alignment of our 155 member bodies through the compliance programme. We now have the possibility of mobilising this energy. I have been travelling around the world and, wherever I go, there are more or less the same problems. What we have to achieve is to identify common problems; identify common processes; and try to avoid duplication of effort whilst working on a single solution that can be applied to all countries subject to small adaptations.

'If we think about auditing standards, IFAC is doing an excellent job through the IAASB [International Auditing and Assurance Standards Board]. We are working to schedule and will finish the Clarity project by September 2008. When we finish the Clarity project we will probably have the best set of auditing standards available. This will also contribute much to convergence.'

Value

Del Valle readily acknowledges the challenge of bringing together a hugely diverse constituency, but counters: 'This year we are organising sub-regional meetings in Europe, Latin America, Asia and Africa to try to identify further opportunities for collaboration. It is one of my objectives to ensure that all member bodies really feel that they are part of IFAC. We need to go out to our member bodies and they need to feel that IFAC is there to provide value for them.' As with all membership bodies, the watchword is value, and del Valle emphasises what IFAC is doing to add value for its member bodies and their own accountant members. 'IFACnet is up and running,' he says, 'and the KnowledgeNet is a very good example of how collaboration is working.'

Tonight he will talk to an audience of senior accountants about regulation. 'The profession is defined by its knowledge, skill, ethics and attitude,' he says. 'One of the characteristics of our profession is that we have to work with the truth as much as possible. The accountant has an important role in both management and as an auditor. But it is important to acknowledge that there are other factors, including the management and culture of an organisation. Recently the focus has all been predominantly on auditors, and not enough attention has been paid to the management and the role of the accountant in business. We have increased regulation on auditors, but we are not seeing the same degree of regulation on those who have responsibility for the underlying information.'

He says it would be an 'enormous error' if professional bodies were deemed to have little or no role, to be replaced completely by government regulation, and he adds that institutes have both the necessary knowledge of complex matters and a direct interest in maintaining the reputation of their members by effectively overseeing their activities. He agrees, however, that public oversight was also essential to strike the right balance and maintain public confidence.

Del Valle's presidency clearly comes at a critical time for IFAC and the accountancy profession, but he remains robustly cheerful about the future, both for IFAC's work in the public interest and the profession. Undaunted by a gruelling work schedule of meetings, talks and interviews, he returns to his room to prepare for tonight's address to the Europeans.