Asmaa Resmouki, the president of the International Federation of Accountants (IFAC), visited Nepal recently to participate in the convention of the Institute of Chartered Accountants of Nepal (ICAN). In an exclusive interview with Madan Lamsal of the New Business Age, she delved into the critical issues confronting the accounting field, the transformative impact of AI on accounting, and the future trajectory of the profession, among others. Excerpts:

What were the primary objectives of your visit to Nepal?

As the President of the International Federation of Accountants, it is both an honour and a responsibility to visit the Institute of Chartered Accountants of Nepal (ICAN). IFAC, a global organisation spanning over 180 countries, counts ICAN among its esteemed members. During the visit, I had the privilege of participating in the third convention of professional chartered accountants in Nepal where I was invited to deliver the keynote address. Additionally, I seized the opportunity to engage with various stakeholders and hold discussions with ICAN on pertinent global issues. This visit also provided a platform for IFAC to gain insights into the opportunities and challenges facing the profession in Nepal, furthering our understanding and collaboration.

What specific issues have you discussed with the ICAN council members? 

We engaged in discussions covering a range of topics primarily focusing on exploring avenues for collaboration between IFAC and ICAN to address challenges confronting the profession.

As the head of IFAC, what do you think are the pressing issues facing the accounting profession worldwide today? 

There are several critical issues impacting the accounting profession globally and locally. One prominent concern is sustainability which has garnered significant attention worldwide. IFAC has been at the forefront of advocating for sustainability, particularly in addressing climate change and other environmental challenges. The urgency to tackle these issues cannot be overstated.

Another pressing issue is education. The evolving landscape demands continuous reeducation to adapt to changes effectively. The rapid advancement of digital technology underscores the need for professional accountants to continuously upskill and reskill in order to stay relevant. Collaboration is essential to navigate new challenges and seize emerging opportunities.

At the local level, collaboration between professional accounting bodies and educational institutions, business schools and universities is crucial. In the public sector, professional accountants play a vital role in ensuring transparent and accountable public financial management. It is imperative to educate, train, and prepare accountants to address the unique challenges of the public sector effectively.

Furthermore, efforts must be made to ensure that the accounting profession remains attractive to the younger generation and instil a sense of purpose in aspiring professional accountants. This involves fostering an environment that encourages innovation, diversity, and ethical practices to meet the evolving needs of society.

You mentioned sustainability and environmental responsibility. How is IFAC incorporating these issues into accounting practices?

IFAC has been instrumental in advocating for sustainability standards. It established the International Sustainability Standards Board a few years ago, and recently issued the first Sustainability Standards Disclosures, covering general and climate disclosures. Recognising the diversity of global contexts, IFAC emphasises the importance of implementing these standards at the local level. However, significant advocacy and preparation efforts are still required.

Another crucial aspect of IFAC's strategic focus is the development, adoption and implementation of high-quality standards. Ensuring trust and credibility in accounting practices, IFAC supports the enhancement of assurance standards. Additionally, IFAC is actively involved in ethics, supporting the International Ethics Standards Board. Efforts are underway to issue ethics standards applicable not only to professional accountants but also to other service providers to ensure consistency and quality across the board.

IFAC's engagement extends to regulation and education as well. The International Education Panel is currently revising educational materials to enable professional accountants and accounting organisations to enhance their skills and adapt to evolving demands effectively.

How do you view the variance in accounting practices between developed and developing countries?

IFAC bears the responsibility of promoting and implementing high-quality accounting practices. It mandates its members to uphold rigorous standards whether in the public or private sector. Compliance involves adopting and adhering to the IFAC model across ethics, education and other relevant standards.

What are the main challenges and hurdles in promoting sustainability reporting on a global scale?

Several challenges exist in promoting sustainability reporting. First, there is a need to cultivate a corporate culture where sustainability is embedded from within. This entails ensuring that both professional accountants and businesses possess a comprehensive understanding of sustainability and receive adequate training in this area. Moreover, bridging the gap between financial reporting and sustainability reporting requires an integrated mindset.

Second, while standards may be developed globally, their adoption and implementation occur at the local level. This poses a challenge to consistency and comparability. Third, establishing international high-quality standards for assurance is crucial for the success of sustainability reporting. IFAC emphasises the importance of robust ethics and standards to uphold credibility.

Lastly, capacity building is essential to equip accountants and accounting agencies with the necessary skills to operate effectively in both the private and public sectors. This involves investing in training and development initiatives to enhance their capabilities.

How do you foresee technologies like AI and blockchain shaping accounting practices? What opportunities and challenges do they present?

Artificial intelligence (AI) and other emerging technologies present significant challenges that must be addressed. Previously, there were concerns that AI would entirely replace accountants. However, it has become evident that AI will not replace accountants, but rather, it will replace accountants who do not leverage AI. This realisation underscores the importance of upgrading our skills and embracing technology integration within the profession.

Digital technology and AI will revolutionise accounting practices through integration with human expertise. This integration will redefine workflows and processes. AI can handle routine tasks, freeing up accountants to focus on more complex analysis and critical thinking.

To effectively integrate AI into our work, we must enhance our analytical capabilities and critical thinking skills. Collaboration with universities and colleges is essential to ensure that new curricula are developed to incorporate emerging technologies and equip future accountants with the necessary skills.

Ethical standards play a crucial role in the accounting profession. How does IFAC endeavour to maintain and integrate these standards within the global accounting community?

Ethics serves as the cornerstone of our profession, highlighting our commitment to the public interest. Upholding ethical standards is paramount as it earns us the trust of society. However, trust can be fragile - it takes years to build but can be lost in an instant. Therefore, we are steadfast in our dedication to ethics.

Ethics holds considerable importance in the accounting profession which is evident by the existence of an international code of ethics that all practitioners must adhere to.

IFAC staunchly advocates for ethics and ethical standards, recognising their pivotal role in maintaining trust and credibility. We actively support the development, adoption and implementation of high-quality ethical standards through initiatives such as the International Ethics Standards Board. Our efforts extend to ensuring that these standards are not only adopted but also effectively implemented across the global accounting community. Moreover, we try to ensure that ethics standards are appropriately applied in emerging areas such as sustainability. Without ethics, our profession would lack the integrity and reliability essential for its continued success.

In numerous developing and least-developed countries, ethics may not receive the emphasis it deserves. What is your perspective on this matter? 

Ethics holds considerable importance in the accounting profession which is evident by the existence of an international code of ethics that all practitioners must adhere to. While IFAC does not function as a regulator, it collaborates with its member bodies to ensure the adoption and implementation of ethical standards.

In many countries, regulators are in place to safeguard whistleblowers, yet Nepal currently lacks such a provision. How does IFAC approach this issue?

This issue holds significant importance as it directly relates to ethics and anti-corruption measures which IFAC strongly advocates for among its members. Whistleblowers play a crucial role in exposing corruption and unethical practices, thus safeguarding the integrity of the profession and society at large. Whistleblowers must be protected from retaliation to ensure they feel safe to come forward with information.

IFAC encourages its members to enact proper legislation that safeguards whistleblowers. Without such protections, individuals may be reluctant to report wrongdoing due to fear of repercussions. Moreover, IFAC's code of ethics includes standards related to compliance with laws and regulations which further underscores the importance of ethical conduct within the profession.

Since whistleblowing is a vital component of the anti-corruption framework, ensuring the protection of whistleblowers is essential for fostering transparency and accountability.

What are your forecasts for the future of the accounting profession? How do you anticipate it evolving over the next decade, and what steps should professionals take to prepare for these changes?

The future of the accounting profession appears incredibly promising and vibrant, with a plethora of opportunities on the horizon. The increasing focus on sustainability presents new avenues for accountants to make a positive impact on the world, a prospect that I view with optimism. The integration of digital technology and AI holds great promise and is poised to enhance the attractiveness of our profession. Additionally, the versatility of our work across diverse contexts equips us with the agility and adaptability needed to navigate and thrive amidst evolving changes.

You held meetings with important stakeholders including the Governor of the central bank. What is your impression of their commitment to implementing these standards?

During my meeting with the Governor, I was pleased to observe his genuine commitment to addressing these issues. The spirit of collaboration prevalent here is impressive. This year, significant progress has been made with the implementation of International Public Sector Accounting Standards-9. This initiative has set the stage for enhanced collaboration between the public sector and ICAN. The skills and contributions of accountants will play a pivotal role in advancing the public sector.