International Accounting and Reporting Issues: 2004 Review - Unctad

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INTRODUCTION The twenty-first session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) was held at the Palais des Nations in Geneva from 27 to 29 October 2004. It was attended by 190 participants from 57 member States. In accordance with the proposal made by the Group of Experts at its twentieth session, which was subsequently approved by the eighth session of the Commission on Investment, Technology and Related Financial Issues, the Group of Experts deliberated on two main agenda items. The first item was a review of the comparability and relevance of existing indicators on corporate social responsibility. In its deliberations on this item, the Group of Experts addressed the need for social reporting with a view to making it more useful for decision-making, achieving comparability, and reducing the costs of corporate responsibility reports; methodology to improve the comparability and relevance of such reports; the possible target audience of such reports; the most important and comparable social topics to report on and criteria for their selection based the on common needs of users of such reports; and the need to include topics that reflect the developmental dimension of corporate activities. The Group considered how social reporting could supplement annual corporate reporting and how it could provide a broader view of an enterprise and its impact on society. The session also noted that the eleventh quadrennial conference of UNCTAD had provided a broader context within which the issue of corporate responsibility could be addressed. The Group of Experts concluded its discussions on this agenda item by agreeing to continue its work in the area of social reporting with a view to developing guidance on voluntary disclosure. The second main agenda item was a review of the implementation status of corporate governance disclosures and the role of such disclosures in adding sustainable value. A panel of experts provided updates on major developments in the area of corporate governance disclosures. Also, the Group of Experts deliberated on the findings of a survey that was conducted to assess, at the company level, the extent of implementation of the corporate governance disclosure elements that ISAR identified at its nineteenth session. During the deliberations, it was noted that various stakeholders were paying increased attention to corporate governance issues and that the trend towards convergence in corporate disclosure practices was growing. The Group of Experts also found that the survey results provided a useful snapshot of corporate disclosure practices at the company level. In addition, it discussed a number of implementation challenges that remain to be addressed in order to bridge the gap between existing codes and corporate governance disclosure practices. In concluding its deliberations on this agenda item, the Group of Experts agreed that in view of new developments in corporate governance disclosures, there was a need to update the disclosure elements that ISAR had identified in its report entitled "Transparency and Disclosure Requirements for Corporate Governance" and deliberated on at its nineteenth session. vii
During the "other business" segment of its agenda, the Group of Experts discussed the outcomes of UNCTAD XI and their implications for its work, the role of accountancy as regards economic development, updates on follow-up work on issues addressed at its previous sessions, and updates by other regional and international organizations on their respective activities. Since the Group of Experts was meeting for the first time after UNCTAD XI, the secretariat briefed participants on the outcomes of UNCTAD XI, namely the Spirit of São Paulo and the São Paulo Consensus. Participants noted that the São Paulo Consensus reaffirmed the continuing relevance of the Bangkok Plan of Action that member States had adopted in February 2000 at the tenth quadrennial Conference of UNCTAD. Furthermore, the São Paulo Consensus provided additional areas of work. Reference was made to various paragraphs in that document that pertained to the work of the Group of Experts and the implications for the future work of the Group of Experts was discussed. Also, the secretariat reported on two parallel events that it had organized in São Paulo on the occasion of UNCTAD XI. These were a high-level roundtable on corporate transparency and investment jointly organized with BOVESPA, the São Paulo Stock Exchange; and a workshop on the role of accountancy in economic development. On the occasion of the latter, UNCTAD and the International Federation of Accountants announced their intention to sign a memorandum of understanding. The secretariat discussed the objectives and outcomes of the two parallel events and expressed its gratitude to the co-sponsors of the events, including BOVESPA, the Swiss Government, the Global Corporate Governance Forum and a number of Brazilian professional organizations that helped in organizing the two events. Under the "other business" segment of the agenda, the Group of Experts conducted follow-up discussions on the positive role that accountancy plays in economic development. This subject was initially discussed at the workshop organized parallel to UNCTAD XI. The twenty-first session of ISAR noted the need for raising awareness of the importance of accountancy for economic development, particularly among policy makers in developing countries and countries with economies in transition. With respect to follow-up on previous sessions of the Group of Experts, the secretariat updated participants on accounting by small and medium-sized enterprises (SMEs), the users and preparers' manual on eco-efficiency indicators and the revised ISAR model curriculum. The secretariat reported that publication work on each of these subject areas had been completed during the inter-session period. The secretariat also reported that Ciba Speciality Chemicals Company had implemented the manual on eco-efficiency indicators that the Group of Experts had issued. A representative of Ciba informed participants about the positive feedback his company had been receiving from investors and other stakeholders following the publication of his company's eco-efficiency indicators on the basis of the manual issued by ISAR. viii
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IV. THE ROLE OF CORPORATE GOVERNANC
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47 Chapter II Although new disclosu
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49 Chapter II 32 The Impact of Sarb
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51 Chapter III A full and balanced
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ACRONYMS A&A Accounting and Auditin
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55 Chapter III discussions and init
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57 Chapter III regulatory backing,
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Accounting Standards: Illustrations
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61 Chapter III body limited to sett
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63 Chapter III At this juncture, it
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J. Mismatch between accounting and
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67 Chapter III • maintain appropr
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APPENDIX: Overview of the Accountin
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Comparability of National and Inter
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Progress in Assessments 73 Chapter
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International Accounting and Report
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CHAPTER V CORPORATE DISCLOSURES: SE
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111 Chapter V corporate governance
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113 Chapter V amount of remuneratio
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The present preliminary Act that mo
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SEC or SET requirement 131 Chapter
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Further problems 137 Chapter V need
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International Accounting and Reporting Issues: 2004 Review - Unctad

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