Cablegate: Unctad: Isar Meeting - Accounting Builds Goodwill

R 291554Z OCT 09
FM USMISSION GENEVA
TO SECSTATE WASHDC 9832
INFO USDOC WASHDC
DEPT OF TREASURY WASHINGTON DC
USMISSION USUN NEW YORK
AMEMBASSY BRASILIA
AMEMBASSY PHNOM PENH
AMEMBASSY BEIJING
AMEMBASSY BRAZZAVILLE
AMEMBASSY CAIRO
AMEMBASSY RABAT
AMEMBASSY ABUJA
AMEMBASSY ISLAMABAD
AMEMBASSY DAR ES SALAAM
AMEMBASSY LONDON
AMEMBASSY PARIS
AMEMBASSY OSLO
AMEMBASSY NAIROBI

UNCLAS GENEVA 000924

SIPDIS

DEPT for IO/GS, EB/OIA, EB/ODF, EB/OMA
PASS to SEC for Julie ERHARDT

E.O. 12958: N/A
TAGS: ECON EAID EINV EFIN USAID
SUBJECT: UNCTAD: ISAR Meeting - Accounting Builds Goodwill

1. SUMMARY: The US built goodwill at this year's meeting of the
Intergovernmental Working Group of Experts on International Standard
of Accounting and Reporting (ISAR), through high-level participation
by SEC Deputy Chief Accountant Erhardt and by hosting a town-hall
style lunch meeting where developing countries shared best practices
and challenges in implementing accounting standards. UNCTAD signed
a Memorandum of Understanding with USAID Contractor Carana
Corporation and Leiden University for a USAID program aimed at
improving financial transparency and good governance. ISAR
meetings, which nurture developing countries' bookkeeping capacities
and compliance with internationally accepted accounting standards,
are among the most productive that the UN Conference on Trade and
Development (UNCTAD) holds. END SUMMARY.

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BACKGROUND
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2. ISAR has been operating as an UNCTAD working group for 26 years
and has built a network of over 1,000 accounting experts worldwide.
ISAR's purpose is to help developing countries understand and comply
with internationally accepted accounting standards and to build
their capacity in the accounting profession.

3. ISAR's annual meeting on October 7-9 in Geneva focused on the
impact of the financial crisis on International Financial Reporting
Standards (IFRSs), and included over 250 participants, most of whom
were the chief accountant of their countries' government agencies.
The meeting covered practical implementation issues of IFRSs; the
effects of the credit crisis on financial reporting; accounting and
financial reporting needs of Small and Medium Sized Enterprises
(SMEs); capacity building in accounting and reporting; corporate
governance disclosure; and, environmental and corporate
responsibility reporting. Agreed conclusions from the meeting are
available at the UNCTAD website at www.unctad.org.

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Keynote Speech
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4. Julie Erhardt, Deputy Chief Accountant of the US Securities and
Exchange Commission (SEC), spoke about the hopes and challenges in
implementing IFRSs. Her five hopes are:

a) to welcome - the need to recognize the global mosaic and make
everyone feel like they can play a part in the global accounting
framework even before full adoption of IFRSs;

b) to nurture, which centers on education and issues of collective
action;

c) to empower, which must involve addressing local incentives
around use of the IFRSs because current incentives may be geared in
support of the status quo;

d) to serve - especially investors who will benefit the most - by
continually improving IFRSs for implementation lessons learned; and

e) to celebrate, which means looking past the dry technical work
to envision how people and society will be better off with IFRSs.
Her comments were well received and fostered goodwill for the US.

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MOU
---

5. Taking advantage of the conference event, UNCTAD's Deputy
Secretary General Draganov signed a Memorandum of Understanding with
USAID contractor Carana Corporation and Leiden University (from the
Netherlands) that launches a tripartite effort for a USAID initiated
program aimed at improving financial transparency and good
governance. Specifically, the agreement will expand the application
of the Accountancy Development Index (ADI) that was designed and
piloted by USAID under contract with Carana Corporation. The ADI is
a user friendly index that provides a detailed analysis through
easy-to-read graphics on how well a particular country is complying
with international standards for accounting and auditing. The
partners will continue to refine the index and provide the technical
assistance and training necessary for its further testing and
adaptation by UNCTAD member countries. USAID's Senior Development
Counselor served as witness to the signing of the MOU. USAID
funding for ADI will conclude in March. UNCTAD and Leiden
University were effusive in their praise of USAID's leadership role
in developing this useful analytical tool.

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Mission Lunch
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6. Mission hosted a lunch in honor of Ms. Erhardt which brought
together 40 guests consisting of decision makers in accounting from
the developing world who shared their experiences, representatives
from the UNCTAD secretariat who discussed their capacity-building
work, and several Geneva-based diplomats from donor countries that
might contribute to UNCTAD's technical assistance, supporting
implementation of IFRSs in developing countries. During a town-hall
format discussion over lunch, participants expressed great interest
in using web-based tools, such as IFRS educational videos made
available over the internet, to train and build capacity in the
developing world to implement IFRSs. They considered creating
videos on real life implementation of the IFRSs to bring the
accounting training to life. Participants emphasized that training
materials should be in multiple languages. The lunch was very
positive and fostered more goodwill for the US.

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Comment
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7. ISAR arguably is one of the best expert meetings sponsored by
UNCTAD. Although accounting rules may be overlooked in development
contexts, economic development is not possible without it. ISAR's
technical assistance is a useful factor to making development
possible. Also, with environmental considerations such as climate
change becoming more important, accounting conventions, such as
those that might be needed for measuring greenhouse gases, may
prompt greater need for ISAR's activities.

GRIFFITHS#

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