Changes are mooted to help Arabs face new challenges
13 Apr 1993A CALL went out yesterday for a change in accounting education throughout the Arab world.
Governments were also urged to undertake plan for developing Arab accounting standards on par with international standards. The call came from the Arab Society of Certified Accountants (ASCA), which held its board meeting in conjunction with the third international Arab accounting conference at the Sheraton Hotel.
The two-day conference, which ended yesterday, was organized by the Bahrain Society of Accountants and Auditors (BSAA) in conjunction with the ASCA.
About 250 people attended the conference, titled ‘Challenges facing Arab accountants’.
ASCA president Talal Abu-Ghazaleh said the board meeting made several recommendations to help Arab accountants face the challenges presented by the new world order.
“It was decided to propose to the Union of Arab Universities and concerned regional Arab economic groups that a Committee for Change in the Accounting Education System be set up,” said Mr Abu-Ghazaleh.
He said that the committee, which would be similar to what is being undertaken in the US, would look at changing accounting education throughout the Arab world.
The meeting also decided to promote the role of the accountant through the media and through interaction with the community to enable the accountant to address the new challenges.
“It was also decided to propose to concerned authorities in Arab countries to set up a working group or a body that would undertake the formulationof a plan and strategy for developing Arab accounting standards,” said Mr. Abu-Ghazaleh.
He said the Arab standards should be of international standards but suited to the needs of the Arab world, taking into consideration the social, legal and religious environment.
“The meeting also decided to escalate the process of qualifying Arab accountants who are badly needed for the development process in the competitive new world order system,” said Mr. Abu-Ghazaleh.
The meeting also decided to encourage leading Arab and international accounting firms practicing in the Arab world to shoulder their responsibility in the process of developing the profession.
Mr. Abu-Ghazaleh said the development of the profession in the West was a result of the efforts of leading firms.
“In the Arab world also, accounting firms have to put money into changing the education system in universities, which is where the accountant starts.” he said.
“Accounting firms in this part of the world have to realize they have a mission. They have to provide the financial and technical support for the change.” He said the ASCA would also ask the International Federation of Accountants (IFA) to define standards for the responsibilities and duties of auditors.
The IFA would also be asked to define standards to govern practice of management consultancy services by auditors.
“There is no doubt that accountants have to undertake management consultancy,” said Mr. Abu-Ghazaleh.
“Since the auditor, like a doctor, examines a company, he is best equipped to offer the prescription.
“But where is his limitation and where is the conflict - that is what needs to he defined.”
“In the Arab world also, accounting firms have to put money into changing the education system in universities, which is where the accountant starts.” he said.
“Accounting firms in this part of the world have to realize they have a mission. They have to provide the financial and technical support for the change.” He said the ASCA would also ask the International Federation of Accountants (IFA) to define standards for the responsibilities and duties of auditors.
The IFA would also be asked to define standards to govern practice of management consultancy services by auditors.
“There is no doubt that accountants have to undertake management consultancy,” said Mr. Abu-Ghazaleh.
“Since the auditor, like a doctor, examines a company, he is best equipped to offer the prescription.
“But where is his limitation and where is the conflict - that is what needs to he defined.”
He said the IFA needed to define this relationship.
It was also decided to hold the next international Arab conference of accountants in 1996 in Oman or Lebanon.
Mr. Abu-Ghazaleh said the new world order was presenting additional and new challenges to Arab accountants.
“The new challenges emanate mainly from what we are witnessing is a globalisation process of the economy and the accounting profession is an integral part of the economy,” he said.
“The world is moving in the direction of one international company I call Global Incorporated, with the G-7 as the board of directors.”
He said this also emphasized the importance of the economy, which was the new power base for nations, instead of the military.
“As a result, there are three basic things we have to do to cope with the new challenges” said Mr. Abu-Ghazaleh.
He said there was a need for a complete change of accounting education, a change in standard setting and legislation to deal with accountability of accountants and their expectations and to deal with interaction between the accountant and his community.
“We are failing in all these areas at present,” said Mr. Abu-Ghazaleh.
He said the new challenges were an addition to the traditional challenges which Arab accountants continued to face.
He said the new challenges were an addition to the traditional challenges which Arab accountants continued to face.
Mr. Abu-Ghazaleh said there was a severe shortage of qualified Arab accountants.
He said the Arab world together and the US had similar population sizes, yet there were 5,000 qualified Arab accountants, compared with 500,000 in the US. He said a second problem dealt with accounting standards in the Arab world.
“Wehave to promote the development and compliance of set standards, which are on par with international standards,” said Mr. Abu-Ghazaleh.
He said the accounting profession has, in the past, been isolated, which was “a shame”.
“We need to sit with government regulatory bodies and banking communities to share in the formulation of standards,” said Mr. Abu-Ghazaleh.
He said protectionism was not the right solution for Arab accountants to deal with the new challenges.
“Protectionism protects failure and poor standards and we are unable to compete, then we don’t deserve to survive,” said Mr. Abu-Ghazaleh.
“We need to sit with government regulatory bodies and banking communities to share in the formulation of standards,” said Mr. Abu-Ghazaleh.
He said protectionism was not the right solution for Arab accountants to deal with the new challenges.
“Protectionism protects failure and poor standards and we are unable to compete, then we don’t deserve to survive,” said Mr. Abu-Ghazaleh.
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