The accounting professional institutes must
revise their courses of studies and upgrade these to international
By Dr. KHAWAJA
Nov 05 - 11, 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
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 treatment. However, this paper looks at getting close
to meeting the requirements of IFAC to get closer to MRAs.
CONSTITUENTS OF THE PAPER
The paper 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 following:
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 lists 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, Informational 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
Core knowledge in organizational & business
areas such as economics, quantitative methods and statistics of
business, organization behaviour, 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
Field experience is a pre-requisite for developing
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 components:
1. IT concepts for business systems.
2. Internal control in computer-based systems.
3. The professional accountant as a user of IT, as a manger 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
1. Member bodies should establish and operate
or otherwise make available CPE programmes.
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 practising business and professionals in
service, are urged to see writing on the wall. They should follow the
strategy of Mergers & Acquisitions (M & A) internally and
negotiate Strategic Alliances externally with practising 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
1. Wright, Peter, Kroll, Mark J., Parnell, John
(1998), Strategic Management : Concepts and Cases, New Jersey :
2. Porter, Michael E., (1989) The Competitive Advantage of
Nations, New York: The Free Press.
B: PUBLICATION OF INTERNATIONAL ACCREDITED BODY
1. IFAC 1999 Technical Pronouncements, New
York: International Federation of Accountants, Sections : Education
(pp 591-694) and Information Technology (pp 927-968).
1. Eshai, Mujahid, ICAP and the Provisions
of the WTO GATTS, "The Pakistan Accountant", March-April
2000, pp 5-20.
2. Haider, Sayed Aftab, World Trade Organisation: The Rhetoric
and Reality, "The Pakistan Accountant", March-April 2000, pp
3. Noordin, Shiraz, World Trade Organization: Trade Flow as
Freely as Possible, "The Pakistan Accountant", March-April
2000, pp 325-29.
Former President, South Asia Federation of
Accountants (1997), Association of Management Development Institutions
of South Asia (AMDISA : 1993-96), Pro Vice-Chancellor & Founder
Director, IBA, University of the Punjab, Lahore, and currently serving
as Dean : Executive Programs, Punjab College of Business
Administration, Lahore (Pakistan)