Categories
Accounting Standards

Global ethics and international accounting standards

The Publish What You Pay campaign is where international politics, financial reporting, and the developing world intersect. The campaign seeks to force companies in extractive industries (such as oil and gas) to make public their payments to governments in the developing world.

It began in 1999 with an “exposé of the apparent complicity of the oil and banking industries in the plundering of state assets during Angola ‘s 40-year civil war. It became clear that the refusal to release financial information by major multinational oil companies aided and abetted the mismanagement and embezzlement of oil revenues by the elite in the country.”

The campaign is supported by numerous charities and political organizations such as Oxfam Great Britain and Human Rights Watch. They lobby bodies like the World Bank and IMF, as well the IASB, the International Accounting Standards Board.

Publish What You Pay calls for an International Financial Reporting Standard for the extractive industries to include a requirement that extractive industry companies disclose in their accounts all payments that they make to the governments of countries in which they extract resources, and to agencies or representatives of those governments.

Sounds like a good idea to me. It’s actually surprising to me as a young idealist that this isn’t already part of international standards. But the most recent letter sent from PWYP to the IASB on the matter expresses the campaign’s consternation with the IASB’s actions to date, and I have to agree.

The IASB’s proposed standard leaves segmentation up to management’s discretion, rather than mandating country-by-country grouping. The standard is barely even that – it basically just codifies laissez-faire.

I’m dismayed to say the least by the lack of support this has received from the Board thus far. In a few years I will be working primarily with IFRS as Canadian GAAP converges. I’d like to see a greater sense of urgency on their part in matters of this importance.

The PWYP letter smartly points out “companies already need to generate [country-by-country segmenting] in order to complete tax returns in each country of operation, this should not prove an additional burden.” They also use the lingo: “The citizens of [poor yet resource-rich] countries are important, if non-traditional, users of financial information.”

This is one of those areas where the IASB could showcase those pervasive qualities in public accountancy like ethical conduct and protecting the public interest.

Categories
Profession

Go west! Or east, or north, or south!

One of the great things about this accounting profession I’m in is the multitude of opportunities available to travel and work abroad, given that many large firms here in Canada are international.

I was just reading an article in BusinessWeek about KPMG, where the head of campus recruiting was under the impression that their international exchange program was something that sets them apart from about a dozen other international firms.

I’m psyched about heading somewhere else to work for a little while eventually. For the time being I’ll be staying put, after all I don’t have my CA yet.

One of my seminar leaders at the School of Accountancy went to London for a year or so and had a blast. It was funny though, because he was Canadian for some reason they felt he was a perfect fit for their US GAAP clients, even though there are a ton of differences between Canadian GAAP and American standards.

In no particular order, here are where I’m most interested in going, when I get a chance:

  • Shanghai
  • London
  • New York
  • Berlin
  • Tokyo

In what other job you can get right out of university do you get this type of opportunity?

Categories
Toronto

Toronto becoming more expensive to live

Not through any direct experience of my own, although my landlord did take the opportunity to raise my rent the maximum allowable by law a month ago, but the city has been moving up the ranks of the most expensive on the planet.

Toronto of course ranks first in Canada as the most expensive place to live in the country, but its our international ranking that is more telling. We now rank 47th out of the top 144 cities, moving up from 82nd last year! That’s a 43% change in just a year, and analysts are basing it primarily on the strength of the loonie.

In other Toronto news, today is our annual Pride Parade, the world’s largest, celebrating our gay and lesbian community. I won’t be attending this year though, because the Netherlands is playing Portugal this afternoon! Go oranje!