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Building accountancy capacity in fragile and conflict-affected states

12 February 2020: Mark Campbell, ICAEW’s Director, International Capacity Building, and Sumita Shah, Regulatory Policy Manager, report from a capacity building conference they attended in Kuala Lumpur, Malaysia.

The relationship between fragility and weak accountancy capacity (that is a low number of accountants), was highlighted by Mark in his presentation at the conference, which brought together professional accountancy organisations (PAOs), donors, accountant generals and auditor generals. He pointed to ICAEW's work in helping to build accountancy capacity in more than 30 countries,12 of which are in the top 60 most fragile states.

ICAEW's new Accounting Technician Qualification (ATQ) was identified as an important step toward closing this gap. The ATQ is currently being piloted in Cambodia, with funding from the United Nations Development Programme, and is available in English and the national language of Khmer. Going forward, the ATQ can be tailored to any country’s specific needs, including in relation to currency, taxation and law.

For years, there has been a push for governments around the world to move from cash to accruals accounting. However, there has been little information on how they should do this. When we consider that many governments don’t even have qualified accountants within their own government structures, not even at the top of their ministries of finance, and don’t necessarily have the skills, capacity or capabilities for change management, it is no surprise that they have struggled to that move to accruals accounting.

Sumita, with her public finance management hat on, together with Bonnie Sirois, Senior Financial Management Specialist from the World Bank, touched on the importance of the profession's role in building public transparency and accountability. In particular, Sumita spoke about ICAEW's toolkit on the 'Building Blocks for Better PFM: a cash to accruals accounting toolkit'. This is a guide for governments and PAOs alike to explore the wider structural frameworks needed to deliver public sector reforms in fragile states.

The event included a conversation on the nuts and bolts of leadership and governance in PAOs, and what PAOs' Boards and CEOs need to do to be effective leaders. Diversity was thrown into the mix when three female CEOs (from Kosovo (SCAAK), Indonesian Institute of Accountants (IIA) and Malaysian Institute of Accountants (MIA)), as part of a panel with the Institute of Public Accountants Australia, discussed their own leadership styles, and the governance and impact on their organisations.

The discussions also challenged the PAOs on their own roles in helping to build capacity within their countries – an important aspect of the conference being that many of the delegates heard about what more developed countries (and particular the PAOs) are doing. The conference was as much about information sharing and helping to build the capacity of the PAOs in these fragile states, as building the capacity of the government bodies. Three of the UK's main accountancy bodies (ACCA, ICAEW, CIPFA) united at the forum to support the PAOs in these fragile and conflict-affected states.

Perhaps one of the most noteworthy (and humbling) parts of the trip was the journey that two of the fragile states' representatives went through to get to this event. The Palestine representative took 50+ hours (with an animated story of the challenges along that journey), and the Yemen representative took 30+ hours. This demonstrates how important this event is to their economies. Travelling easily across borders is a privilege. Something that perhaps many of us take for granted.

The Developing Accountancy Capacity in Emerging Economies was organised by the International Federation of Accountants (IFAC) in partnership with the Asian Development Bank (ADB), the World Bank, UKaid, the Global Fund, INTOSAI, and hosted by the Malaysian Institute of Accountants (MIA) and Confederation of Asian and Pacific Accountants (CAPA).