International Professional Accountants in Business

I was back in New York last week beginning my third year of service on the International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) committee as the AICPA representative. IFAC “members” are 147 professional accountancy organizations from around the world and the PAIB includes representatives of member organizations from Europe, India, Australia, Hong Kong, Africa and North America. It is always interesting to hear the differing viewpoints and global perspectives. For example, the focus on Integrated Reporting and Sustainability Reporting is much greater among PAIBs outside of the U.S. Their stakeholders are demanding such reporting and the PAIBs are taking it on, unlike many U.S. companies where such reporting is often handled by non-financial departments within a company.

It is also interesting to understand the different meaning given to the same terms. For example, in the U.S. we talk about public companies and private companies. We all know that public companies have shares and or debt traded in securities markets and private companies don’t, but that is not what the rest of the world means when they use those terms. To the rest of the world public companies are government owned enterprises (in many parts of the world utilities, telecommunications and energy companies are often wholly or partially owned by the government), while private companies are everything else which includes what we would call both private and public companies.

Running a public (government owned) company can be very different especially when it comes to governance of such an entity. The PAIB is planning to issue a document outlining Guidance on Good Governance in the Public Sector in April in order to help PAIBs in those entities understand the best ways to handle the unique issues such entities face in their governance process.

One of the true differentiators between PAIBs and AIBs (note they are missing the “P” for professional) is that PAIBs must abide by a code of ethics. If you are a CPA you should be familiar with your state code of ethics as well as the AICPA code of ethics. Did you know there is also an international code of ethics? There is, and IFAC member organizations code of ethics generally must comply with the requirements in the IFAC code of ethics. The PAIB has been working with the International Ethics Board on updating “Section C” of the international code of ethics that deals specifically with PAIBs. The idea is to provide better, more practical guidance for PAIBs when they are dealing with ethical dilemmas like being pressured to “make the numbers look better” or come across other types of illegal acts at their employer. Such issues must be dealt with carefully. While we talk about the problems whistleblowers deal with in the U.S such as retaliation or being fired, that is nothing compared to what can happen in other parts of the world where retaliation might mean bodily injury or even death.

Finally, the PAIB plans to issue an exposure draft on how supplementary (non-GAAP) financial measures should be handled. There is a growing call for some perspectives on results that are not always in accordance with GAAP and that can put PAIBs in a difficult position. The hope is that this guide will provide principles that a PAIB can follow to supply such information when it is helpful to stakeholders’ understanding of the business. That way we can feel more comfortable being involved with such disclosures and know we are giving them appropriate rigor and not using them to mislead investors.

Going Global

The past week really brought home to me how international the profession of accounting is becoming.  I attended the International Federation of Accountants, Professional Accountants in Business committee meeting in New York and the Regional AICPA Council meeting in Atlanta.

The IFAC meeting really brought home that no matter where you work in the world, the U.S., Canada, Europe, India or Australia, the issues we are dealing with as PAIBs are the same.  We are dealing with investor demands for more information being fulfilled through standard setters and regulators.  We are dealing with risk management and internal control and the realization that as a business we have been organized to take risks – but as PAIBs we are being asked to monitor that risk taking to make sure the risks are known and within the corporate plans.  PAIBs across the world are being asked to be more than just good accountants; we are being asked to be strategic leaders in the business to deliver on business plans and ultimately the return to all stakeholders in the business.

The internationalization of the issues facing the profession was made even more apparent at the AICPA Regional Council meeting.  We spent half the meeting hearing updates about and talking about potential implications to the AICPA and our members of the various impacts of Internationalization.  Mandatory auditor rotation is just one such issue.  It is a purported solution to all the ills related to audits around the world.  Some areas see it as the solution to an apparent lack of competition among the audit firms.  Others see it as the way to give auditors backbones to stand up to unreasonable requests from the companies they audit – the theory is it is easier to say no if you know your going to lose the relationship after a few years anyway.  But whatever the problem, mandatory auditor rotation as the solution is gaining momentum due to an interesting dynamic – that everyone else is “doing it” so it must be good and we need to do it too.

This last point brings out the reason why it is important to talk with an be part of the international professional accountant community.  Some solutions are good and worth emulating.  Others, however, are not good at all and the misinformation being spread can only be combated by hearing the real story from our fellow professionals in those countries. I for one am glad the AICPA is focused on the internationalization of the profession and opening the lines of communications around the world.

Eleven Principles of Effective Reporting

I was at the Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants meeting last week.  The PAIB has a number of task forces providing help to PAIBs in areas like risk management and internal control, governance and ethics and performance management , but today I want to talk about a good practice guide on principles of business reporting that is under development.  An exposure draft of the report was issued last May with comments due last month.   While the comments will result in some changes to the guide, the eleven principles outlined in the exposure draft will remain intact.  The eleven principles are

  1. Committing to Effective Reporting Processes
  2. Determining Roles and Responsibilities
  3. Planning and Controlling the Reporting Process
  4. Engaging Stakeholders
  5. Defining the Reporting Content
  6. Selecting Frameworks and Standards
  7. Determining Reporting Processes
  8. Using Reporting Technology
  9. Analyzing and Interpreting Reported Information
  10. Obtaining Assurance and Providing for Accountability and Transparency
  11. Evaluating and Improving Reporting Processes

I can hear many of you saying; well those are all very obvious, tell me something I don’t know.  My answer to that is; if it is so obvious, why to so many of us and our companies violate these principles every day. 

How many of you are still producing critical reports via excel spreadsheets? Are you really using reporting technology appropriately?   How many of you have put together a project plan or a business case to improve reporting so critical decisions can be made with more accurate and timely information just to be told there are bigger priorities?  Is your company really committed to effective reporting processes?  When was the last time you actually asked the users of your reports what they really need?  Are you really engaging the stakeholders?

My point is that I think we can all use a reminder every now and then of what it really takes to do reporting – external and internal – right.  The eleven principles is a good place to start with that refresher.  If you are interested in this guide or any of the others that IFAC produces, they can be found at . Check it out, you might be surprised at the quality of the resources available to you.


I’m guessing a lot of you are saying IFAC PAIB.  What is that? The answer is The International Federation of Accountants (IFAC) Professional Accountants In Business (PAIB) Committee.  IFAC is a confederation of 267 professional accounting bodies from around the world.  Its members include the AICPA, CIMA, ACCA, CPA Australia, ICAEW, and ICAI (you can look up the ones you don’t know on your own) among many others.  IFAC’s mission is to promote the profession of accounting across the world and support that profession through leading in setting standards for audits, ethics and education.  

The PAIB supports that mission for accountants in business by seeking global recognition of professional accountants as business leaders and strategic partners in building long-term sustainable organizational success.  PAIB work includes International Good Practice Guides (IGPG), other informational or discussion papers on emerging topics that do not yet have defined good practices, web based resources and forums and roundtables.

One of the defining IGPG’s is Competent and Versatile How Professional Accountants in Business Drive Sustainable Success can be found at This document outlines what makes professional accountants different from all of the non-professionals out there as well as showing how having the right professionals help businesses be more successful.

Last year I was honored with an appointment to a three year term on the PAIB and I attended my first meeting in New Delhi, India last week.  We did all of the things you would expect the committee to do including updating the strategic plan, reviewing new guides being produced and setting the near term agenda for additional guides and efforts to be undertaken.  In addition, I got to experience for the first time the worldwide impact of the profession of accounting. 

I met members from the Pakistan, India and Hong Kong and seeing and hearing how much businesses need true professionals to support them and make them a success was enlightening.  We are very fortunate to have a large and talented pool of professional accountants that work in business to ensure the success of companies across the country.  The U.S. is the model of success that much of the world would like to replicate, and many see the core of professional accountants available to U.S. businesses as one of the key pieces to our formula for success.  It makes me proud to be able to say I am part of that.   Thanks to all of you for making that possible.