Sultan Bin Saeed Al Mansouri, the Minister of Economy, urged Gulf Co-operation Council countries to accelerate moves to integrate accounting and auditing regulations to protect regional economies from future financial crisis.
GCC urged to accelerate integration of accounting and auditing rules
Sultan Al Mansouri, the Minister of Economy, has urged GCC countries to accelerate moves to integrate accounting and auditing regulations to protect regional economies from future financial crisis.
Speaking at a ceremony in Dubai to mark the signing of an agreement to extend ties between the GCC Accounting and Auditing Organisation (AAO) and the Institute of Chartered Accountants of England and Wales (ICAEW), Mr Al Mansouri said: "This initiative is aimed at applying transparent accounting and governance criteria to develop the profession ethically and give the region immunity in any financial crisis in the future."
Under the agreement, the GCC and United Kingdom bodies are to develop an audit quality monitoring programme, and offer advice and support on the creation of a Gulf monitoring unit, to oversee the application of international auditing standards in each of the six GCC countries.
"Economic integration is one of the main goals of GCC countries. We have already achieved a lot. The GCC is a strong body with standards some other countries don't have, and it emerged from the financial crisis with some advantages," Mr Al Mansouri said.
"There should be a recognition by all professionals in these fields that we should implement international accounting standards to provide a just environment for investors," he added.
One aim of common accounting standards would be "to shed light on government budgets in time of crisis", he said.
Abdulkarim Alzarouni, the vice chairman of the AAO, said: "Accounting and auditing had a role in the global financial crisis and we are still suffering. Lots of global companies went bankrupt and they were all audited by the biggest firms who gave them unqualified accounts."
He said that the collapse of Enron, Lehman Brothers, and the Madoff enterprises had shown that there was a problem with conflicts of interests between auditors and accounting firms acting as consultants, and with the use of derivatives.
He said one of the problems of accounting in the GCC region was that there was a lack of awareness of the accounting profession.
"This project seeks to promote the very highest professional and technical standards in audit, and it is a great pleasure to be working with the ICAEW," he said.
Vernon Soare, the ICAEW's executive director, said: "The Middle East is one of the most rapidly developing regions in the world economically, and stands at the centre of global trade and investment. Audit quality has a huge role to play in underpinning market confidence, through vigilance and transparency both within countries and across national borders."
Cooperation between the region's AAO and ICAEW will be in three phases: designing an effective framework and Gulf monitoring unit, development and implementation, and on-going support.
The agreement between the two bodies, which was described as the "first pan-national project of its kind", was welcomed by Peter Benyon, the regional director of ICAEW Middle East. "Ultimately, the ability to do business rests on the confidence placed in the accounting profession," he said.