Foundation for economic growth and development

A top international accountant has called for the accountancy profession in Sri Lanka, throughout South Asia and around the world to foster an environment in which corruption cannot exist.

“For those of you that serve in top management positions that means creating an ethical ‘tone at the top.’ When employees know there is a consequence for unethical action, they are more likely to be deterred from it,” Fermín del Valle, President International Federation of Accountants told a gathering of top public and private sector leaders at the South Asian Federation of Accountants CEO/CFO Forum on Tuesday.

He said that this leadership role, however, must extend to other elements of government and civil society. “The accountancy profession is but one of many elements that must participate in the fight against corruption. Nevertheless, if the profession can demonstrate its own commitment, it can very effectively demand participation by the other groups, whether they are other professions, governments, regulators or other private sector organisations,” he added.

He said that the challenge is to sustain the economic growth that is currently being posted in South Asia, which is enjoying some of the highest rates of economic growth in the world, exceeding the average rates for most developing countries around the world. “The accountancy profession has a key role to play in this process and I believe we meet it in four fundamental ways - By embracing and learning from other cultures; by making a commitment to adhere to high values; by focusing on sustainability; and by supporting the development of entities of all sizes,” he noted. He said that one of the keys to true and sustainable development of the profession worldwide is that we open ‘our’ minds to learn from every culture and urged the profession in South Asia to continue to share its own culture with the rest of the worldwide profession and also to embrace the cultures of others.

Del Valle said that as the accountancy profession is a global one, there are distinct benefits that arise from this including the ability to learn from one another. “This will, I believe, help us to clarify and strengthen our role with respect to contributing to economic development worldwide and the second way in which we can meet our responsibility to laying a foundation for strong growth is by making a commitment to strong values,” he said.

He said that companies will only be able to build the trust of a range of stakeholders through greater openness, transparency and accountability as they expand their global activities to take advantage of competitive opportunities; while coming under increasing scrutiny.

“The challenge, then, for professional accountants in business is to serve as an ethical gatekeeper – to be a champion of integrity, transparency and expertise which are the three core values of IFAC,” he said adding that expertise implies knowledge and experience and, consequently, permanent education. “Integrity is the coincidence between word and action. To have integrity is to honour commitments. Finally, where transparency exists, corruption is not possible. Corruption is one of the largest obstacles to development. If the accounting profession is committed to development, then it should commit itself to combat corruption,” Del Valle elaborated, adding that most likely to suffer are developing and emerging economies.

He said that what the accountant should do when confronted with corruption is covered in IFAC’s professional guidance. “It requires that we act decisively in the best interests of the public. We should recognise that the perception in some minds is that accountants do not do enough to fight corruption. To counter this misperception, we must never compromise our values. And we must never compromise our character by even appearing to be associated with a corrupt activity, on any level, in any way,” he reiterated.

Addressing the issue of sustainability, he said that it is an over-arching concept which seeks to promote long-term growth in all the various forms of capital available such as financial, natural and social. “Sustainable development is also high on the agendas of a wide range of consumer organizations and non-governmental organisations for the simple reasons that failures to engage with the challenges of sustainable development pose serious strategic, business and reputational risk,” he added. Discussing the need to support enterprises of all sizes, he said that accountants cannot overlook the importance of the role of the small and medium enterprise in contributing to the economic growth of both developed and developing nations. “Because of the sheer scale of the small and medium enterprises, when taken as a whole, and the dramatic effect that successful SMEs can have on national and international economies, all of us must keep their issues at the forefront of our priorities” he said.