WTO: Challenges to accounting profession
Three Cs strategic approach
By Dr. KHAWAJA AMJAD SAEED,
Apr 09 -15, 2001
WTOs regime is expanding. From goods the scope is being
expanded to services sector now. Borderless trade and investments have been
witnessed throughout the world. Now borderless services sector is in the offing.
This paper focuses on the areas of accounting services — in particular
relating to developing accounting professionals for public and private services.
Accounting professional is taken to mean a person who is a member of a
recognized accounting professional body (Financial and/or Cost & Management)
set up under statutes.
Inflow of Foreign firms and professional accountants is
likely to be moving from developed countries to developing countries. How should
SAARC countries in general and India in particular identify the issues and later
develop a strategic response to prepare for facing the future challenges?
This paper is an initial effort to help develop a three Cs
strategic approach to address the major issues. Primary focus is on getting
close to the International Education Guidelines (IEGs) released by International
Federation of Accountants (IFAC). This will facilitate the beginning of the era
of signing Mutual Recognition Agreements (MRAs).
WTO has set up Working Party on Professional Services (WPPS).
Its mandate covers the following three components:
1. The recognition of qualification.
2. The disciplines relating to market access, and
3. The use of international standards.
MRAs are arrangements based on which members of WTO jointly
agree to recognize the qualifications of professionals of similar institutes of
one another. The recognition may be partial or full. The absence of MRAs can act
as a barrier to international trade in accounting services. On the other hand,
MRAs can facilitate the trade in accounting services by laying down the extent
of recognition of the qualifications of one another and the requirements to
fulfil for recognition by the relevant authorities of the party of the
agreement. in May 1997, the WPPS established guidelines for recognition of
foreign qualifications. The study of the above requires an independent
This article gives a brief about WTO. It presents three Cs
strategic approach namely, Competencies, Continuing Professional Education and
Competitive forces to be given due recognition for facing future challenges. It
concludes urging all stakeholders to use strategic approaches to be prepared for
accepting the challenges with an assured confidence.
WTO was established on January 01, 1995 In Geneva,
Switzerland. Currently its membership consists of 135 countries. It has a staff
of 500 with a budget of 122 million Swiss Francs. Its Chief Executive holds the
designation of Director General. Main strategic functions of WTO include the
1. Administering WTO trade agreements.
2. Forum for trade negotiation.
3. Handling trade disputes.
4. Monitoring national trade policies.
5. Technical assistance and training for developing countries.
6. Cooperation with other international organizations.
First "C": Competencies
To ensure that proper persons join Accounting Profession, IEG
9 suggests broad guidelines for entry point and structure of pre-qualification
education and experience of professional accountants. IEG 9 1ists three elements
of accounting education and experience e.g. knowledge, skills and professional
values. The strategic goal is to produce competent professional accountants.
Knowledge bejewelling must cover General Knowledge, Organizational and Business,
Information Technology and Accounting and Accounting related. Skills to be
developed include intellectual, interpersonal and communication. Professional
values must concentrate on professional ethics and values.
Earlier, entry requirements require pre-testing to enable
students with appropriate aptitude to enter into the accounting profession.
Core knowledge in organizational & business areas such as
economics, quantitative methods and statistics of business, organization
behavior, operations management, marketing and international business must be
covered in the prescribed courses of studies. Core knowledge related to
accounting and related areas must include in the prescribe courses of studies
subjects such as financial accounting and reporting, management accounting,
taxation, business and commercial law, auditing, finance and financial
management and professional ethics.
Field experience is a pre-requisite for developing proper
IEG 11 deals with Information Technology (IT). IT is
pervasive in the world of business and a firm grip on IT on the following
aspects is considered essential for professional accountants:
1. General IT education requirements.
2. The accountants as user of IT.
3. The accountant as manager of Information systems.
4. The accountant as designer of business systems.
5. The accountant as evaluator of information systems.
Six appendices have been included with the above IEG dealing
with general information technology education requirements, with the following
1. IT concepts for business systems.
2. Internal control in computer-based systems.
3. The professional accountant as a user of IT, as a manager of
IS, and as a designer.
Second "C": Continuing Professional
Events are moving much faster than the pen that records these
for cold print. The decade of 1980s was dominated by TQM; the decade of 1990s
was known for Re-engineering; but the 21st century's early decade will be
dominated by velocity. The speed with which knowledge is getting itself doubled
is fantastic. Therefore there is an urgent need to stay updated and ornament
oneself with new knowledge, new skills and enlightened attitudes.
IEG - No. 2 deals with continuing professional education (CPE).
Main recommended steps to be taken are briefly stated now.
1. Member bodies should establish and operate
or otherwise make available CPE programs.
2. Mandatory CPE include a minimum of 30 hours per year or a
minimum of 90 hours in every three-year period.
3. Structured learning should be pursued.
4. Monitoring should be institutionalized.
5. Notice should be taken for non-compliance of foregoing
Third "C": Competitive Forces
Professor R. Michael E. Porter's five point model is
suggested to be carefully examined to develop strategies to face the future
challenges. This model is summarized below:
1. The threat of new competitors entering the
2. The intensity of rivalry among existing competitors.
3. The threat of substitute products or services.
4. The bargaining power of buyers.
5. The bargaining power of sellers.
All stakeholders, in particular accounting professional firms
in practicing business and professionals in service, are urged to see writing on
They should follow the strategy of mergers & acquisitions
(M&A) internally and negotiate strategic alliances externally with
practicing firms abroad to equip themselves to face the emerging challenges.
The accounting professional institutes must revise their
courses of studies and upgrade these to international levels. The world of
academics may initiate Doctoral Programs in the above area so that the internal
and external environments are given due recognition. The competitive forces are
properly identified and suggestions are developed to evolve ways and means to
equip ourselves to accept the WTO's challenge in services sector relating to
*Former President, South Asia Federationof Accountants
(1997), Association of Management Development Institutions of South Asia (AMDISA:
1993-96), Pro Vice-Chancellor & Fonder Director, IBA, University of the
Punjab, Lahore, and currently serving as Dean: Executive Programmes, Punjab
College of Business Administration, Lahore (Pakistan)