Ethics inegrated
for success
In the increasingly
globalized village our world is becoming, developing effective regional
structures is essential across the spectrum of economic activity.
Among the most important, some would say the most vital - a component
of the financial industry is accountancy. As has been widely reported,
this profession when performed with the utmost respect to its high
ethical standards, can streamline economies for more sustainable
growth. If not, many more Enrons would continue
to wreak havoc in global finance. 
The rapid pace of economic development in Ethiopia over the last
half a dozen years has brought into focus the essentiality of professional
accountancy as business in general expands.
The Association of Chartered Certified Accountants ACCA is an east
and central Africa regional body which aims to introduce best practice
and linkage in and among the economies of the region.
It established an Addis Ababa office in 2004 and has since organized
various public awareness events on its aims and objectives.
Capital had the opportunity to talk to W/o Hikmet Abdella, Country
Manager of ACCA and Mr. Allen Blewitt CEO of ACCA International
when they were in Addis recently to honor and award professors,
Johannes Kinfu and Getachew Kassaye, pioneers in the accountancy
profession in Ethiopia.
Excerpts follow.
Capital: Could you describe the purpose of the East Africa
ACCA Convention?
Allen Blewitt - This event is in recognition of the growing importance
and influence of the region, and takes place as we see greater integration
between the Eastern African countries.
The first convention was a huge success and we were keen to repeat
the exercise, staging a major gathering for ACCA in the region every
other year.
Alongside regional integration, there is the issue of globalization
of the marketplace and the challenges and opportunities which it
presents to Eastern Africa.
The convention will enable more than 550 professionals, business
leaders, regulators and politicians from nine countries to meaningfully
share information and experiences, to learn from one another and
to forge business links.
The convention will significantly contribute to developing career
opportunities and promoting the Profession and business in the region.
The event is also an opportunity for ACCA to Provide for the continuing
professionals development (CPD), and networking needs of its growing
membership across the region.
Capital: Why was the theme “Balancing organizational
success with ethical conduct”?
Hikmet Abdella- Ethics is the cornerstone of professional practice.
The stability of entire economies depends in large part, on unimpeachably
reliable audits and financial statements. Clients, investors and
a large number of stakeholders increasingly rely on accountants
to provide impartial information about the financial health of organizations,
companies and sectors of industry.
Over the last decade or so, global business and the accounting profession
were shaken by corporate scandals like Enron and WorldCom in the
US, and by Parmalat in Europe. Eastern Africa had its own corporate
failures - and irresponsible and unethical conduct was at the heart
of these failures. Global regulators, governments and the profession
have worked hard to create and sustain a regulatory environment
that will help to avoid failures of this nature and their detrimental
impact on developing economies like those of Eastern Africa, but
there needs to be a commitment to adopting regulation and codes
of conduct from individuals working in the profession.
Among the issues that this convention will be exploring is how organizations
with an ethical track record often outperform those which do not
- in brief - showing that it is possible to be good at business
and still be good.
Capital: What is the relevance of ACCA’s qualification
in countries like Kenya, Uganda, Ethiopia?
Hikmet Abdella- ACCA was the first professional accountancy body
to base its qualifications on international Financial Reporting
Standards (IFRS), which means that the ACCA qualification is recognized
as having the same high standards worldwide.
International organizations based in Kenya, Uganda and Ethiopia
will, I am sure, attest to the qualities which ACCA students and
members possess.
Capital: What is the present and future role of the Accountant
in the corporate sector against the backdrop of corporate failures
like Enron, Worldcom, as well as failures in Eastern Africa?
Allen Blewitt - ACCA believes there should be common corporate governance
guidelines on a global basis. Countries which do not move to enact
increased transparency (which includes the use of International
Accounting Standards) will find investors shying away from them.
We believe in the strength of the audit - with audit reports being
extended to cover a number of areas including:
- Internal controls
- Performance indicators as to company’s health
- Key non-financial indicators
- Risk management strategies and risk assessment
- Corporate governance practices
- Management Discussion and Analysis as part of the annual report
- Human capital data such as HR statistics, staff turnover, investment
in training, research and development
- A higher level of assurance on sustainability reporting.
Of course, all the systems and techniques in the world are of no
use in combating fraud and rebuilding trust unless there is a strong
ethical basis to accounting. ACCA strongly supports IFAC’s
(the International Federation of Accountants) efforts to establish
global ethical guidelines for all accountants.
Ethical practices will also form part of the initiative we are launching
on the development of how to measure corporate transparency, including
executive remuneration.
It is also essential that each accountant keeps him or herself fully
up to date technically. At the beginning of this year, ACCA launched
a comprehensive Continuing Professional Development Scheme, for
which we have had exceptionally positive feedback both from members
and employers.
Capital: What is the role of the accountant in fighting
corruption and enhancing accountability and responsibility?
Allen Blewitt - We believe that accountants are on the front line
in the fight against corruption and in enhancing accountability
and responsibility. This is why our new professional qualification
has a strong focus on ethics and governance - the qualification
and the resources which support members and students provide a framework
that enables them to make ethical decisions. This is because, increasingly,
finance professionals are called on to make decisions - not between
obvious ‘right’ and ‘wrong’ but between
two ‘rights’.
There has also been a growth in regulation affecting employers and
the new qualification has been designed to help accountants respond
to that challenge. We believe that the accounting profession should
“own” the governance area - because we have the skills
to take responsibility for ensuring that organizations meet the
governance standards expected of world class businesses.
ACCA has also campaigned for greater transparency in the way in
which organizations are governed with greater information available
for stakeholders - through sustainability reporting, for example.
ACCA believes the way to prevent corruption is through greater openness
and transparency.
Capital: What is the role of ACCA in enhancing public confidence
in the accountancy profession?
Hikmet Abdella- ACCA works to ensure that its members operate to
the highest ethical and professional standards. We operate an open
and robust disciplinary system. We also work in partnership with
governments, regulators and accountancy bodies around the world
to help build the accounting profession, and develop professional
education through joint examination schemes. We have also developed
our monitoring and regulatory activities across Africa, and we’re
working in partnership with a number of professional bodies in sharing
knowledge and experience to develop accountancy in the region. These
things help enhance public confidence in the profession.
Capital: Since most businesses in Kenya, Uganda and Ethiopia
have to do with small scale enterprises, what is the experience
and expertise of ACCA in SME issues? What do you plan to do to support
SME issues in these countries?
Hikmet Abdella- ACCA is a champion of SME issues. A large proportion
of ACCA members work in and understand the SME sector which accounts
for 99 per cent of all enterprises in countries like this one and
generate more than 50% of employment opportunities. One of the issues
which ACCA stresses is the need for governments and regulators to
‘think small first’ - rather than creating rules and
regulations for multi-national organizations and then trying to
adapt them for smaller businesses.
It is currently making its views known on the new IFRS for SMEs
and questioning whether they meet the needs of truly small businesses.
ACCA has organized a number of SME events aimed at consulting members
around the world on SME issues. These have helped in formulating
a small business manifesto which put forward a number of ideas on
how to promote the development of SMEs.
Capital: How long has ACCA been present in the three countries
and how many members does it have?
Allen Blewitt - ACCA has 296,000 students and over 115,000 members
in 170 countries. It has operated in Kenya, Uganda and Ethiopia
for many years. The offices were established in Nairobi, 1988; Kampala,
1999 and Addis Ababa, 2004.
Kenya hosts our regional office which covers the Eastern African
countries of Uganda, Ethiopia, Tanzania, Sudan, Rwanda, Burundi,
Eritrea and Somalia. We now have close to 600 members in Kenya.
No. Item USA China India
1. Political Parties 12 1 100+
2. Railways 230,000 kms 73,000 kms 65,000 kms
3. Vehicles Production 12 mln/year 5.6 mln year 1.6 mln/ year
4. Vehicles 23 mln units 20 mln 17 mln units
5. Telephones 180 mln lines 350, mln lines 19 million lines
6. Television Stations 9,000+ 300 900+
7. Radio Stations 21,000+ 800 3000+
8. GDP $ 13 trillion $ 8.9 trillion $3.6 trillion
9. Per Capita GDP $ 42,000 $ 6,800 $ 3,200
10. GDP Growth 3.5% 10% 8%+
11. Internet 204 mln users 111 mln users 51 mln users
12. IT Sector $ 350 bln/year $ 19 bln/year $ 130 bln/ year
13. Tourism $ 94 bln $ 26 billion $ 3.9 bln
14. Imports $ 1.7 trillion $ 632 bln $ 114 bln
15. Exports $ 930 bln $ 753 bln $76 bln
16. International Reserves, excl. gold $ 38 bln $ 575 bln $ 93
bln
17. Gold Reserve 7.4 bln grams 560 mln grams 336 mln grams
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