Head of an accounting firm, S Masoud Ali Naqvi said the accounting profession needs to restore confidence in the integrity of financial reporting and prove its independence by ensuring greater transparency and openness.
He was addressing the second and last day of two-day conference of South Asian Federation of Accountants (SAFA), jointly organised by ICAP and ICMA at a local hotel here on Saturday.
Recounting “bad affects” of infamous Enron scandal, which originated in the United States on auditing community around the globe, he forcefully defended his colleagues and put froward following six point agenda before the conference, which he thought could restore faith in the profession's integrity.
1. The auditors must move rapidly to broaden the business reporting model to provide more information on intangible leading indicators, corporate risks and opportunities.
2. Ensure that investors should have participation in developing, funding and the process of addressing the perception of self-interest. 3. Lay more emphasis on disclosure of non-financial information, more timely and frequent disclosures with appropriate harbour to encourage investors and protect against frivolous lawsuits.
4. Make more investment in people, training, enhance audit and deploy complimentary services, which are designed to strengthen the job we do to protect investors.
5. Guard against overly oppressive regulatory actions that could sap the services and quality of financial reporting of vitality. 6. Monitor closer interaction among regulators, profession, corporate sectors, investors and analysts to ensure the expectations for financial reporting remain realistic and disclosures are more fair and equitable.
Naqvi said the auditing profession in SAARC region in particular needs to strive hard to minimise inconstancies in the pre-entry requirements, education standards and curriculum contents ensuring a harmonised and consistent profession, which is dynamic enough to evolve with the changes in demands.
The professional accountants as executives or employees with financial or management accounting functions or as lead managers are required to confirm to a uniform code of conduct which should be able to act as a booster for their knowledge base, structural training and expertise, he observed.
“The shared regulation concept needs to be implemented to ensure that professional bodies voluntarily subscribe to an oversight independent and transparent institutional function to ensure the credibility of the quality and accountability process and to focus more and more on public interest role,” he added.