By: JOSEFE C. SORRERA-TYPast PICPA National President (2012-2013)

AFA SECRETARY GENERAL

ASEAN INTEGRATION: IS THE

ACCOUNTANCY PROFESSION READY?

Technical Session 2Regulators Forum (Joint with nACPAE)

Grand Ballroom, Hotel Intercontinental Manila, Makati CityJuly 15, 2015

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ARE WE READY FOR THE ASEAN INTEGRATION?

(MEANING :ADDITION, MIXING,

INCORPORATION,COMBINATION

AMALGAMATIONASSIMILATION)

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ASEAN COMMUNITY ASEAN Political Security

Community ASEAN Economic

Community ASEAN SocioCultural

Community

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OBJECTIVETransform ASEAN into a stable,

prosperous, and highly competitive region with Equitable economic development Reduced poverty and Socioeconomic disparities

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ASEAN Economic Community 2015

Regulatory harmonizationReduction of trade barriers

Promotion of labour mobility

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ROLE OF THE ACCOUNTANCY PROFESSION

A properly functioning accountancy profession iscritical to:

Private sector development investorconfidence and attracting FDI WB Report 2014

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ROLE OF THE ACCOUNTANCY PROFESSION

A properly functioning accountancy profession iscritical to: Public sector sustainable public financial management reforms and improved governance,accountability and transparency WB Report 2014

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Key Challenges of the Guardians of the Treasure House of ASEAN

Most ASEAN countries have adopted and are implementing International Accounting and Auditing Standards in the private and public sectors.

But lesser developed countries face a daunting task in accounting and auditing reform given their capacity constraints.(WB 2014)

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Key Challenges of the Guardians of the Treasure House of ASEAN

The significant development gap across ASEAN countries will increasingly constrain economic development unless it is addressed.

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Current Status of the Accounting and Auditing Profession in ASEAN Countries by the World Bank Sept. 2014

snapshot of current status

key areas of difference and constraints to closing the development gap

regional harmonization and coordination of capacity building would be beneficial

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What areas does the report cover?

Accounting Education Entry Requirements for Professional Accountants and CPD Professional Independence and Ethics Requirements AFAs Mandate and Role National PAO Development

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What are the key findings in Accounting Education?

Figure 2. Minimum credit hours to obtain an accounting degree / inclusion of international standards in the curricula

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What are the key findings Accounting Education?

Figure 3. Accounting graduates per year, by country14

What are the key findings in Entry Requirements?

Table 2. Comparison of entry and CPD requirements for the accounting profession

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What are the key findings on Ethics?

Table 3. Ethics and rotation requirements for auditors16

What are the key reporting requirements?

Table 4. Factors that affect a companys accounting, audit, and financial reporting requirements

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What are the key findings on Professional Accountancy Organizations?

Figure 1. Approximate number of professional accountants by country

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MANY PAOS DO NOT HAVE A MANDATE OR ANYAUTHORITY OVER THE PUBLIC SECTOR AND THE FOCUSOF WHAT THEY CURRENTLY DO IS SOLELY ON THEPRIVATE SECTOR. OFTEN PAOS DO NOT HAVE WELLDEVELOPED RELATIONSHIPS WITH THEIR PUBLIC SECTORCOUNTERPARTS RESPONSIBLE FOR FINANCIALMANAGEMENT, ACCOUNTING STANDARDS AND AUDIT

STANDARDS.

Key Findings in Public Sector Accounting and Auditing:

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What are the key recommendations? Increased harmonization and coordination of capacity building at a regional level would be beneficial Consensus needed on regional capacity development priorities necessary AFA and PAO can play a key role in facilitating increased

harmonization in the areas particularly coordination of capacity building activities

Quality of Accounting Education, PIE Accountabilityand SME financial reporting are important areas A key decision is the extent to which the Accountancy profession engagement in the PFM reform agenda Sovereignty issues will need to be balanced with what is in the best interests of the ASEAN Economic Community 20

Key Findings on the Role of AFA:

AFA is clearly already a key regional accounting organization that has been formallyrecognized by the ASEAN Secretariat. It has also commenced discussions with IFACabout becoming a Recognized Regional Organization and recognizes the importance ofachieving such official international recognition. 21

OTHER IMPORTANT FACTORS TO CONSIDER IN OUR READINESS FOR INTEGRATION:

LANGUAGE

CULTURAL SENSITIVITY

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Let us not follow the Little Princes Accountant who spends his days working over his books, counting everything up, claiming ownership of all that can fit in the ledger, and failing to see that we live in a whole, wild universe filled to the brim with stars somewhere in the midst of which one, unique rose lives on a planet and calls out for love.

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MAY WE BE ABLE TO SEE BEYONDTHE ECONOMIC FIGURES

MAY WE BE REMINDEND THAT THE ASEAN INTEGRATION IS ABOUT A CARING AND NURTURINGCOMMUNITY.

THANK YOU!24