International Federation of Accountants April 26, 2009 Transitioning to One World in Accounting Education Robert Bunting, IFAC President The Higher Education Accounting Forum

Global Economic Crisis

 Demonstrates depth of international interdependencies (i.e., G20 Summit)  Highlights importance of finding international solutions  Underscores need for one set of global standards across the financial system  Reinforces need for high ethical standards and stronger corporate governance  Places greater pressure on public institutions

IFAC and the Financial Crisis  Reemphasizing and restating the urgency of convergence  Expediting development of standards and guidance on key issues, i.e., going concern, fair value, financial instruments, and corporate governance  Providing global resources for implementation and compliance monitoring  Supporting OECD corporate governance principles  Speaking with a global voice to international regulators, standard setters, and others IFAC addresses the crisis by:

What IFAC Does  Sets international standards for: –Auditing –Ethics –Accounting Education –Public Sector Financial Reporting  Supports adoption and implementation of all global standards  Speaks for the global auditing and accounting profession  Liaises with regulators & other standard setters

The IFAC Family  157 members and associates in 122 countries and jurisdictions  2.5 million accountants in all segments of the profession: –public practice –education –government service –industry and commerce  Regional accountancy bodies  Global Networks of Audit Firms (21)

Globalization  Credentials becoming a global stamp of quality  International marketing by accountancy bodies, like the AICPA  Standards are overwhelmingly global  Accelerating pace at which globalization will impact accounting and auditing in universities  Academic programs  Business offices Shaping the Accountancy Profession

How IFAC Can Help NACUBO  Vehicle for NACUBO access/influence on international issues  Academic access to standard setting  Provides corporate governance and ethical guidance  Offers sustainability guidance  Facilitates research and information exchange among academics  Addresses risk management, public sector performance, and other relevant issues

Why International Standards Matter GASB FASAB GAO “ Yellow Book ” FASB AICPA ASB IPSASB IASB IAASB INTOSAI IPSASB U.S. International

IFAC Standards Who uses auditing standards (ISAs)?  Large firms  More than 100 countries  Officially the basis for ASB standards Where ISAs are indirectly used:  Yellow Book drawn from ISAs to some degree (via INTOSAI)  PCAOB collaboration

IFAC Standards Who uses IPSASs?  Governments  Not-for-profit entities  International organizations, such as OECD, UN, NATO, and IFAC  The World Bank also supports

International Standards  Financial reporting rules are converging, though slower in the public and non-profit sectors than in the private, public-interest entity arena  Auditing practices increasingly shaped by ISAs in all sectors of the economy  Expansion of college operations across borders necessitates increasing use of global standards  Statutory audits for local authorities  Reporting with IFRS (versions) Operation Impact

International Standards Academic Impact – Need to Broaden Curriculum Teaching only U.S. GAAP handcuffs students to U.S. economy. Must incorporate ISAs IPSASs, and IFRSs in curriculum.

“Green” Challenge for Universities  Meeting the demand for growth, including facilities, materials, energy, etc.  Dealing with rapid and unprecedented rise in energy consumption as a result of technology  Recognizing the complexity of universities, educational institutions need to have a single control center to ensure that university-wide policies and procedures are implemented effectively and consistently

“Green” Solutions  Need ownership and coordination at the top  Need to identify clear green and social goals with stakeholder engagement  Need to identify broader set of measures of performance to include environmental and social issues  Start with relatively simple energy efficiency and waste minimization and better procurement initiatives IFAC Sustainability Framework offers pointers for accountants and university business officers to sustainably manage their organizations.

“Green” Solutions Engage All Stakeholders

What does this all mean?  Up-skilling/recruitment of staff in international accounting and auditing – Accentuates the serious problem of shortage of accounting PhDs  Need to “internationalize” curricula and textbooks  International Education Standards can help  Means that you are “future-proofing” your students Academic

What does this all mean?  Financial constraints are increasing – Endowments and income declining – Funding under pressure  Need to monitor and desirably influence the development of standards  Need for a single set of high-quality standards (US)  Competitive role in international credentialing? Operational

The time for study may be passing quickly. Thinking globally must be paired with acting globally. Moving Ahead

We are moving rapidly to “one world” in accounting, auditing, and corporate governance. The Future

Observation vs. Mindful Purpose Is there a role for NACUBO in shaping global policy?

International Federation of Accountants