By Jason Bramwell
When professional accountancy organizations (PAOs) function properly, they hold the power to support the production of high-quality financial information, contributing to public- and private-sector development, economic growth, and the aid-effectiveness agenda, concluded a new global report released October 2.
The Professional Accountancy Organization Global Development Report is an initiative of the Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration (MOSAIC). In November of 2011, the International Federation of Accountants (IFAC) and members of the international development community signed MOSAIC.
MOSAIC's objective is to "increase the capacity of PAOs in partner countries to improve the quality of public and private sector accountancy and financial management with a view toward enhancing the effectiveness and efficiency of donor assistance, enhancing economic growth, and reducing poverty."
PAOs are defined by MOSAIC as membership bodies comprised of individual accounting professionals who perform a variety of roles in the accounting field and adhere to high-quality standards of practice.
As an integral part of national financial infrastructures, PAOs can provide significant contributions to the financial, economic, and social development of nations, Deborah Williams, cochair of the MOSAIC Steering Committee and chair of the IFAC PAO Development Committee, said in a written statement.
Ten Key Areas of Focus for MOSAIC PAO Development Activities
The report culminated in ten key findings, which will provide direction for MOSAIC in developing and strengthening PAOs and act as a compass, revealing where the priority focus should be for MOSAIC activities. The ten focus areas include:
- Undertaking PAO development comprehensively
- Strengthening legal and regulatory foundations
- Monitoring and providing support to fragile states
- Supporting internal strengthening of PAOs
- Developing PAO education and certification capacity
- Broadening PAO membership bases
- Implementing international standards
- Supporting PAO orientation to the public sector
- Strengthening regional organizations and the services they provide
- Facilitating PAO mentoring relationships
"This report will provide vital direction on where to focus efforts to increase PAO capacity and improve the quality of public- and private-sector accounting and financial management – goals that underpin MOSAIC", Jennifer Thompson, cochair of the MOSAIC Steering Committee and chief financial management officer at the World Bank, said in a written statement. "It allows us to further the principles of aid effectiveness – embodied in the Paris Declaration, Accra Agenda for Action, and the Busan Partnership for Effective Development Cooperation – to contribute to economic growth and a reduction in poverty."
The report states that focusing efforts on strengthening PAOs supports the production of high-quality financial reporting, auditing, and financial management which, in turn:
- Attracts foreign direct investment.
- Promotes growth and development of the small- and medium-sized entity sector.
- Increases transparency and accountability in the use of public funds.
- Improves the design and delivery of vital public services.
- Enhances the effectiveness and efficiency of official development assistance.
To learn more, you can access the entire report on the IFAC website.