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.”

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The pillars are:

  • Legal, regulatory and institutional
    framework;
  • Auditing, assurance and quality control;
  • Professional education;
  • International Public Sector Accounting
    Standards;
  • IFRS;
  • 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.

Strategy: Accountancy development index, pillar scores – C21