Real progress is being made on the adoption of International Financial Reporting Standards (IFRS) in the Middle East, but there is an urgent need for corporate legislation that mandates the use of IFRS by all companies and enforces proper compliance.
That is the verdict of international accounting experts addressing the World Accounting Summit in Dubai later this month.
The five-day international summit will bring together more than 300 leading international and local accounting experts, regulators and standard setters at the Al Murooj Hotel, Dubai from May 27-31. The main debating topic will be the successful regional implementation of the global standard for accounting and reporting, IFRS.
Abbas Ali Mirza, a partner at Deloitte & Touche and the newly elected Chairman of the Auditors Group of the Dubai Chamber of Commerce and Industry (DCCI), said: “There has been substantial progress on IFRS implementation in the UAE in the last couple of years, but this has been the result of best practice rather than a legal framework, with the exception of banks in the UAE which are required to follow IFRS under a directive of the Central Bank.
“At the last count, more than 100 countries have adopted IFRS fully or to a large extent. The European Union adopted IFRS for consolidated financial statements of listed companies at the start of 2005, and Australia has applied the rules across the board for all companies. Many Middle East countries have also adopted IFRS as a legal requirement of their corporate legislation.”
An author of numerous books on IFRS, Mirza added: “Such corporate legislation if enacted in the UAE will enable shareholders and financial institutions to use financial statements prepared according to global accounting standards, which are currently only being followed by listed companies. There is no legal compulsion for non-listed companies to follow IFRS; it happens because of best practice or as a result of financial covenants with banks.”
Mirza said: “Implementation of IFRS is not an easy task because the standards are complex, and their interpretation can be subjective. Users of the standards may therefore experience practical problems when complying with IFRS. Cultural differences also need to be brought to the attention of international standards setters so that they consider the viewpoints of those preparing financial statements in emerging economies.”
Agata Pawlik, Conference Director at IIR, organisers of the World Accounting Summit, said that this year’s summit provides a valuable opportunity to address the grey areas of IFRS implementation in the Middle East. It also brings together board members from the International Accounting Standards Board (IASB), the major accounting associations worldwide, advisors to multinational companies, and key users and writers of financial statements.
Abbas Ali Mirza, who will chair the World Accounting Summit and deliver a regional keynote address, said: “Before the stock markets fell, GCC market capitalisation touched the US$1 trillion dollar mark, which represents three per cent of the world’s market capitalisation. This places a big responsibility on regulators to implement and enforce world-class accounting and financial reporting rules for financial entities operating in the region. Proper implementation of IFRS will help avoid the mistakes in the West brought about by creative accounting and the lack of corporate governance.
“Around 200 Fortune 500 companies now prepare their financial statements under IFRS. IFRS is fast becoming the global financial reporting benchmark, and it is therefore imperative that the much-awaited Company Law of the UAE prescribes these standards.”
Taking place from May 27-31, the World Accounting Summit welcomes a wide selection of industry speakers including Robert Garnett, Chairman of IFRIC and Board Member of IASB in the UK; and Richard Martin, Head of Financial Reporting at The Association of Chartered Certified Accountants (ACCA).
Dr. Habib Al Mulla, Chairman of the Dubai Financial Services Authority (DFSA); and Dr. Ahmed Bin Abdula Al-Moghames, Secretary General of the Saudi Organisation for Certified Public Accounts, will also address delegates.
About World Accounting Summit
The World Accounting Summit brings together for the first time in the Middle East, senior representatives from the global standards setters, the major accounting associations worldwide, the principal advisers to multinational companies as well as key users and perpares of financial statements. This event seeks to aid finance professionals in their efforts to apply IFRS, improve financial reporting and enhance corporate governance.
Related site: http://www.accountingsummit.com
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