KARACHI, Nov 22: International Federation of Accountants (IFAC) has recently appointed a new task force with the objective to improve the credibility of financial reporting worldwide.

The New York-based IFAC is a worldwide organization representing more than 150 accountancy organizations in 114 countries, representing more than two million accountants. Pakistan’s premier accountancy bodies, Institute of Chartered Accountants of Pakistan (ICAP) and Institute of Cost and Management Accountants of Pakistan (ICMAP) are members of IFAC.

A news release issued by IFAC said that the IFAC Task Force on Rebuilding Public Confidence in Financial Reporting would be chaired by John Crow, former Governor of the Bank of Canada, and include representatives from company managements, boards of directors, the investment community, and the accountancy profession.

“The task force will provide an international perspective on the problem of the loss of credibility of financial statements. This loss of credibility occurred prior to the collapse of Enron and WorldCom, although these events have made addressing the issue all the more urgent,” commented IFAC President Aki Fujinuma.

IFAC President stated that the task force would specifically identify and analyse the causes of the loss of credibility, and consider alternative courses of action to restore credibility.

Those may include recommendations on principles of best practice in the areas of financial and business reporting, corporate governance, and auditor performance.

IFAC said that in carrying out those works, the task force would pay attention to: Firstly, the considerable volume of work already undertaken by IFAC member bodies and others at a national level in addressing the loss of credibility; secondly, cross- national variations in the extent of the loss of credibility and its causes; and thirdly, the emerging patterns of convergence in such areas as financial reporting and corporate governance.

IFAC stated that the task force plans to issue a Report in mid- 2003. The Report would outline actions that the task force considers necessary to restore public confidence in financial statements, with a focus on the role of the accounting and auditing profession.

IFAC observed that its mission was to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. “It achieves this through the issuance of standards and guidance in five key areas,” said IFAC, listing those areas as: ethics; auditing and assurance services; education; financial and management accounting and public sector accounting. IFAC said it also achieves its mission through the establishment of a compliance programme requiring its member organizations to ensure accountants’ adherence to high quality standards.