Dutch accountancy institute NIVRA is working with the UN Council for Trade and Development (UNCTAD) on an Accountancy Development Index (ADI).
The ADI measures how developed an accounting profession is.
NIVRA director for international accountancy education and development Paul Hurks told The Accountant there is a need for easily accessible information on developing countries’ accounting professions for donor agencies, regulators, professional associations, educators and other stakeholders.
“This index gives a picture of the development of the accountancy profession in a country just by a snapshot,” Hurks explained.
“There are a lot of reports by the World Bank and also the Organisation for Economic Co-operation and Development that give pictures of a country, but these consist of a lot of pages.
“The accountancy profession, donors for future projects and potential investors need a more easy approach to this kind of information. Therefore, this snapshot has been developed and we have developed a system of eight pillars that are very important for the accountancy profession.”
The pillars are:
- Legal, regulatory and institutional framework;
- Auditing, assurance and quality control;
- Professional education;
- International Public Sector Accounting Standards;
- Ethics and discipline;
- Corporate governance – transparency and disclosure; and,
- Professional accountancy association institutional capacity.
The pillars are depicted in a diagram resembling a spider web, which Hurks calls a spidergraph (see below).
The spidergraph indicates the level of adoption and implementation of each of the pillars in the country in focus.
Hurks suggests that in the future there could be potential for ranking countries and regions.
The ADI was originally developed by NIVRA in co-operation with USAID and the University of Leiden in the Netherlands.
A pilot programme last year gathered information from more than 40 countries, with assistance from the professional accountancy bodies in each location.
This has been taken over by a consortium led by UNCTAD in Geneva.
The ADI will be launched at a conference in October.