ACCA calls on G20 nations to drive reform of the global financial agenda

KARACHI (May 26, 2010) – As the Group of Twenty nations (G20) prepares to meet in Toronto next month, ACCA (the Association of Chartered Certified Accountants) has put forward its key recommendations for global policy-makers.

On 26-27 June 2010, around 1500 delegates, including heads of state, will convene to discuss the global financial crisis and assess what progress has been made on the road to recovery. In a new paper in line with the theme of the summit, Recovery and new beginnings, ACCA calls on world leaders to deliver on promises made at previous summits, and go further in their efforts towards financial sector reform, robust accounting standards, and strong, sustainable growth.

“A repetition of a catastrophe on this scale is something neither governments, nor the public, nor the global business community could countenance”, says Head of ACCA Pakistan, Arif Masud Mirza. “We feel the crisis has provided both an incentive and an opportunity for the wholesale financial reform which will lead to a sustainable global economy.”

While ACCA commends the pledges made by the G20 to date, the Recovery and new beginnings identifies several areas in which further action is needed. In particular:

  • The G20 should turn its stated commitment to integrity in financial institutions into reality, by encouraging moves to instil ethical business codes and better risk management functions in the financial and corporate sectors
  • The G20 must broach the question of ‘too big to fail’ financial institutions, and consider as a serious option the separation of retail and investment banking
  • The G20 should now take concrete steps towards the implementation of IFRS (International Financial Reporting Standards), and ensure accounting standards are free from undue political influence
  • Sustainability and tackling climate change should be embedded in the G20’s agenda, and ingrained in business practice through the use of a global carbon reporting standard

ACCA also raises questions about the structure of the forum itself: “It is unclear how the interests of smaller economies are represented at the table,” says Arif Mirza. “So while the G20 may be more inclusive than the G8, some introspection is needed to make sure it is truly representative, and avoid accusations that it is an exclusive club.”

Though the G20 has existed since the financial crisis in Asia in 1999, it is only over these past two years that it has really cemented as an entity, and only at the summit in Pittsburgh last September that it was designated the premier forum for international economic cooperation. Clearly, there remains much still to do. But, concludes Arif Mirza: “Given the leadership it has shown this far, ACCA is calling for the G20 to be made a permanent fixture with a secretariat established, so its remit extends beyond the short-term, and beyond economic issues, to a broader global governance role.”

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