Association and Organisation of Internnational Certified Professional Accountants

Accounting standards refer to the policy documents and principles set aside by recognized accountancy bodies to promote the best accounting practice relating to various disclosures, measurements, treatment of accounting transactions and as per the codification of various respective accounting bodies like Generally Accepted Accounting Principles (Shil, Das, and Pramanik, 2009). The need for convergence of accounting standards was precipitated by the growth and expansion of international trade, internationalization of companies, development of efficient and fast communication systems, and the competitive international financial environment. Major challenges facing the application of professional ethical codes is that most professionals view the codes as being less relevant and the technical challenges that it faces. Ethical conflicts and the threats facing professionals are some of the challenges facing professionals.
Misrepresentations, client advocacy, and independence rule are also some of the other challenges facing accountants. Regulating bodies have been affected by incompetence and lack of experience among the senior employees (Cengage, 2015). Managers who are incompetent have been unable to control runaway corruption that is rife in most state offices especially in Africa and Asian continents while modern cybercriminals have also devised modern methods of hacking financial systems resulting in losses amounting to millions (Cengage, 2015).
Major ethical considerations that may be required to tame unprofessionalism are that all the accountants should be made to declare their wealth and the regulatory body should create a control system of monitoring and assessing the lifestyles of all accountants. They should be updated to date with the current compensation details of all the accountants registered under the regulatory authority. Some of the UN Global Principles and ISO 26000 major policies address besides the human rights, they address employee training, vulnerability to climate change, pollution prevention, environmental protection, child labor, and workplace health and safety measures.
The Association of Internnational Certified Professional Accountants (AICPA) regulates both the American Institute of CPA’s (AICPA) and also the Chartered Institute of Management Accountants known as CIMA (IFAC, 2020). The Association of Internnational Certified Professional Accountants has a membership of 657,000 accountants and students both in public and private universities, management accounting firms and also in various organizations that assist in the maintenance of public interest and other private and public organizations.
The International Federation of Accountants or the IFAC is the international organization that regulates the accountancy profession globally. The organization has over 175 members and accounting associates in over 130 countries globally and in different jurisdictions and who represent about three million accountants serving in different capacities. IFAC accounting development, adoption, and consequent implementation of all the international standards of accounting principles, ethics, and education in private and public institutions as well as government and private service (IFAC, 2020). The organization guides and encourages the implementation and adoption of high-quality standards in the private and public sectors, professional audit, and accounting standards. The organization was created on October 7, 1976. The purpose of the organization is to strengthen the accountancy profession worldwide. Its head offices are in New York and Geneva while its current Chief Executive is Kevin Dansey (IFAC, 2020). The Public Interest Oversight Board oversees the operations of IFAC.
ISO issue 1 (6.3.3) discusses due diligence and how the organization can proactively undertake the process relating to the risks in the organization and how it can potentially affect the operations and activities of the organization (United Nations, 2016). Among the key areas of carrying out diligence reports periodically is on human rights policy, its implementation, and content. The methods and means of assessing and tracking the performance of the company in accordance with the human rights provisions. The section also addresses how the negative effects of company decisions affect the implementation of human rights protection policies. The UN Global Principles and ISO 26000 major policies address besides the human rights, they address employee training, vulnerability to climate change, pollution prevention, environmental protection, child labor, and workplace health and safety measures.
More than one hundred jurisdictions have adopted the International Financial Reporting Standards globally. The United States is one of the few countries that have not adopted the full set of IFRS standards. However, all the financial regulating entities in the US such as the Financial Accounting Standards Board, Securities, and Exchange Commission fully support the IFRS and in fact, have approved the use of IFRS in both the New York Stock Exchange and the NASDAQ. The need for a single, high-quality set of globally acceptable reporting and accounting standards drove investors, regulators, businesses, government bodies, auditing firms to adopt the IFRS. The SEC allowed foreign companies that have been listed in NYSE to use the IFRS when filling their returns since 2008 (AICPA, 2012). It\'s noteworthy that all US firms are allowed to use USGAAP to file for their returns by SEC in both the NASDAQ and NYSE.
The Global Reporting Initiative was established in Boston in the year 1997 (Global Reporting Initiative (GRI), 2016). The first global standards and principles for sustainability reporting were first published in 2016 as Global Sustainability Standards Board (GSSB) and they enabled companies to published public reports on their environmental, economic and social impacts of their companies and how the companies contributed towards the country’s sustainable development (Global Reporting Initiative (GRI), (2016). The GRI standards and policies include all the major concepts, disclosures, and policies of GRI G4 guidelines which among other issues enhance flexible organization structure, simpler language, and clearer requirement (Global Reporting Initiative (GRI), (2016). The G4 exam was launched in 2015 comprising of 60 multiple choice questions that one is required to pass to gain accreditation and ability to utilize GRI G4 guidelines (Global Reporting Initiative (GRI), (2016). The exam is available in more than seventy countries. All the students who pass the exams are issued with certificates and their names are listed for three years on the GRI website.
Some of the challenges that different face when adopting the IFRS are the differences in the application and principles of the IFRS and the respective jurisdiction. For example, in the US GAAP is more prescriptive, rule-based, and firm in some application but the IFRS is both subjective and also principle-based. The other differences are the application of the accounting methods that each standard allows. The US GAAP allows the use of Last in First out (LIFO) to value and account for inventory but IFRS does not allow its application and instead prefers First in First out (FIFO) (PWC, n, d).
The accounting standards in different countries were developed under different legal, social, economic, and cultural environments. There exists some diversity in the standards that cannot be reconciled easily (PWC, n, d).
I propose that the IFRS should include several sections that allow options for selecting different standards with clauses that check the provision of such inclusion. For example, the inclusion of LIFO in some cases is said it reduces inventory profits as it matches recent costs with revenues hence reduces or understates the cost of sales hence overstate profits while FIFO leads to overstated cost of inventory hence understates profits (PWC, n, d). The IFRS guideline should include more options for revenue recognition.
The AICPA, CPAO & IFAC Codes of professional conduct are also part of the accountant’s professional training and requirement. The codes are included in IFAC’s code of ethics. In North America two major codes of conduct are critical. The AICPA code of professional conduct and the code of professional conduct of CPA Ontario (CPAO). Summaries of AICPA and the CPAO include a definition of a CPA primary duty which is for the public interest, not persona (Cengage, 2015). The other personal ethics requirement for accountants is that they maintain professional ethics that do not damage the confidence that the public has for accountants.
In recent years there have been cases of accountants colluding to defraud public corporations that resulted in the introduction of new laws to protect public interests like the Sarbanes Oxley law (Cengage, 2015). The CPAO code covers the introduction of fundamental principles in ethics such as integrity, professional competence, due care, confidentiality, professional behavior, and objectivity. Others are in professional appointments, marketing professional and ethical activities, conflicts of interest, gifts and hospitality, independence in appointments, avoidance of potential conflicts, inducement, and financial interest. CPAO uses flowcharts when providing helpful guidance.
The IFRS should introduce a mandatory framework that allows sections of the conceptual framework to be included in all sets of accounting globally. For example, the IFRS framework should make mandatory for all published reports to have certain sections of the reports submitted in all jurisdictions be in standard languages like English and French or a combination of a respective country’s language and another one in the agreed international language. A language that is spoken in more than ten or more countries universally. This will assist in helping a wide range of people investing in more countries internationally.
Major challenges facing the application of professional ethical codes is that most professionals view the codes as being less relevant and the technical challenges that it faces. Ethical conflicts and the threats facing professionals are some of the challenges facing professionals. Misrepresentations, client advocacy, and independence rule are also some of the other challenges facing accountants.

  • Some of the guidelines that I would recommend to the professional ethical regulation body are:
  • All the accountants should declare their wealth and the regulatory body should create a control system of monitoring and assessing the lifestyles of all accountants. They should be updated to date with the current compensation details of all the accountants registered under the regulatory authority.
  • All the accountants should have a clearance annual performance certificate every year depending on the performance of the employee.
  • All the accountants involved in questionable activities should not be allowed to practice or work in any private or public office.
  • The regulatory authority in most cases lacks prosecutorial powers that are required to arrest corrupt professionals.
  • Proper laws are required to enable some regulatory bodies to implement the policies that are needed for proper effectiveness.

The major challenge facing accounting and other regulating bodies globally is rampant corruption and dishonest state officials. Major assassinations have occurred in most jurisdictions especially in Africa where senior state officials who have refused to allow corrupt activities have been assassinated (Cengage, 2015).
Other regulating bodies have been affected by incompetence and lack of experience among the senior employees (Cengage, 2015). Incompetent managers have been unable to control runaway corruption that is rife in most state offices especially in Africa and Asian continents. Modern cybercriminals have also devised modern methods of hacking financial systems resulting in losses amounting to millions (Cengage, 2015).

Conclusion


The GRI reports allow More than one hundred jurisdictions have adopted the International Financial Reporting Standards globally. The United States is one of the few countries that have not adopted the full set of IFRS standards. However, all the financial regulating entities in the US such as the Financial Accounting Standards Board, Securities, and Exchange Commission fully support the IFRS and in fact, have approved the use of IFRS in both the New York Stock Exchange and the NASDAQ. The IFRS guidelines should include the options that are contestable and which convergence has been a problem. Adequate provision should be made to ensure that the uniformity of financial statements is not affected. Ethical policies guiding professionals against misconduct are also necessary to ensure that professionals maintain the standards of the accounting practice. The other personal ethics requirement for accountants is that they maintain professional ethics that do not damage the confidence that the public has for accountants. In recent years there have been cases of accountants colluding to defraud public corporations that resulted in the introduction of new laws to protect public interests like the Sarbanes Oxley law.

The International Federation of Accountants or the IFAC is the international organization that regulates the accountancy profession globally. The organization has over one hundred and seventy-five members and accounting associates in over one hundred and thirty countries globally and in different jurisdictions and who represent about three million accountants serving in different capacities. IFAC accounting development, adoption, and consequent implementation of all the international standards of accounting principles, ethics, and education in private and public institutions as well as government and private service. The organization guides and encourages the implementation and adoption of high-quality standards in the private and public sectors, professional audit, and accounting standards. The organization created in October 7, 1976, serves the global community. The purpose of the organization is to strengthen the accountancy profession worldwide while the Public Interest Oversight Board oversees the operations of the organizations. The IFRS should introduce a mandatory framework that allows sections of the conceptual framework to be included in all sets of accounting globally. For example, the IFRS framework should make mandatory for all published reports to have certain sections of the reports submitted in all jurisdictions be in standard languages like English and French or a combination of a respective country’s language and another one in the agreed international language. A language that is spoken in more than ten or more countries universally. This will assist in helping a wide range of people investing in more countries internationally.