The Accountancy Profession: A Partner in Trust for the Global Capital Markets

As long as commerce has existed, accountants and markets have existed in concert with each other. When goods and services are exchanged for money, there is a need for people who provide solid financial information about those transactions. Accountants, these providers of accurate and trusted financial information, have long helped others understand the language of business, ensuring that communication is clear and financial planning is thorough. 

When I look at the work done by the International Federation of Accountants (IFAC) and the World Federation of Exchanges (WFE), I’m struck by the similarities between two organisations. Both IFAC and the WFE are member-centric organisations delivering value in finance around the globe. We share similar mandates: to work with standard setters, policy makers, governments, regulators and other stakeholders to create strong and sustainable financial markets and economies. We both confront persistent transformation and use our positions as global member organisations to push for positive change within our interconnected world. 

For accountants, the ability to adapt has been critical for a very long time. As the world has evolved from the economies of ancient Mesopotamia to those of the Bronze Age, the Middle Ages, and the Renaissance, and as the world confronted industrialisation and the Machine Age - and the present Information Age - there’s always been a need for accountants who can continue to provide accurate and trusted financial information. 

In a swiftly changing world, forming new skillsets without moving away from the ethics and integrity that are fundamental to their reputations as trusted experts is pivotal to professional accountants. And accountants, with their competency in analysing and interpreting data, their ability to use it to innovate business models, and their skills in communicating reliable data and new models in a trusted way, are pivotal to the world. That’s ultimately what accountants bring to the global economy and capital markets: trust. 

Capital Markets are characterised by information asymmetries and agency conflicts. Without credible individuals and systems to mitigate these trust issues, the level of risk would be unacceptable to most people. It would preclude all but the largest and most sophisticated actors from participating in capital markets. Professional accountants enable trusted information to reach broad audiences, which is helpful when we’re attempting, not just as individual actors or governments, but as a global society, to mitigate the harm of climate change. 

The International Federation of Accountants recognises the importance of working in concert with others to support a trusted ecosystem for transformational change. Among those we’ll work with to adapt to the challenges ahead: capital markets regulators and stock exchanges. A major focus for IFAC is strengthening our relationships with these and other core capital markets trust stakeholders. 

A recent big step for IFAC was joining IOSCO as an Affiliate Member. As a participant in the Affiliate Members Consultative Committee (AMCC), and as the only representative of the global accountancy profession within the IOSCO network, IFAC is now bringing the perspective and expertise of the profession to this important capital markets regulatory forum. Participating in the IOSCO AMCC means working with the WFE (and WFE CEO Nandini Sukumar, Vice-Chair of the AMCC), which has long been an influential actor. 

We intend to strengthen our relationship with WFE and bring the collective expertise of our important global networks to bear. With the rapid move toward mandatory sustainability reporting and assurance, for example, cooperation and alignment between regulators and exchanges and the accountancy profession are crucial to maintaining trust in capital markets. 

Accountants are key players in the global financial ecosystem, and are particularly important during this transformational time. With the conclusion of the Monitoring Group reforms, which mandated standard-setting boards’ independence from IFAC, we’re in a position to redefine our relationships with key global stakeholders. 

Adoption and implementation of the standards that make the accountants trusted experts are more important than ever. And given the importance of the accountancy profession to the capital markets, one of IFAC’s key focus areas going forward will be stakeholders in global capital markets. 

I believe we are at the start of a new race in corporate reporting that will lead to stronger global markets, to the benefit of all. That makes me excited for the accountancy profession, and I am optimistic that we as a global profession will rise to the expectations others have of us, and have had of us for a long time, to drive confidence and trust.