This paper features interviews with 10 senior-level professional accountants in business on their experiences in mid-sized enterprises. The purpose of these interviews is to better understand the unique challenges that mid-sized enterprises confront and how professional accountants in business help address these challenges.

A new report, Financial Reporting Supply Chain: Current Perspectives and Directions, emphasizes that significant efforts to strengthen financial reporting in recent years have resulted in improvements in three key areas: corporate governance, the process of preparing financial reports, and the audit of financial reports. However, despite improvements to the financial reporting process, the report points out that the understandability of financial reports has not improved.

Commissioned by the International Federation of Accountants (IFAC), the report's findings are based on an independent global survey of participants in the financial reporting supply chain. The survey, conducted in 2007, sought to determine the extent to which the financial reporting process, and financial reports themselves, have improved and where there is need for further action to make them more relevant. More than 340 participants from all sectors of the financial reporting supply chain worldwide - including investors, preparers, company management and directors, auditors, standard setters, and regulators - took part in the survey. In addition, interviews were conducted with 25 high-level participants in the supply chain, including investors, company directors, CFOs, and regulators. The project was led by Norman Lyle, who recently retired as group finance director of Jardine Matheson Limited in Hong Kong.

Among the key findings, the survey found that corporate governance has improved, fueled by an increased focus on corporate governance and changes to company codes and standards.  In commenting on improvements to the financial reporting process, survey participants indicated that convergence to international standards, enhanced regulations governing financial reporting, and improved internal control over financial reporting systems all contributed to enhancing the reliability and relevance of the reports. Improvements to audit standards and practices and strengthened independence rules were seen as having contributed to enhanced audit quality.

"Despite the strengthening of the financial reporting process and the many improvements made, there is still much to be done to meet the needs of investors and other stakeholders," points out Norman Lyle, Chair of the Financial Reporting Supply Chain Project. "Survey respondents raised concern about the reduced usefulness of financial reports due to complexity and the increased focus by companies on compliance instead of reporting on the essence of the business."

Recommendations for Action

To address the usefulness of financial reporting, survey participants recommended:

• Improving communications among participants in the financial reporting supply chain;
• Producing financial and business information that is relevant, reliable and understandable;
• Including more business-driven information in financial reports; and
• Promoting the use of technology to enable users to compile their own information.

"IFAC is already working to address these challenges," emphasizes Ian Ball, IFAC Chief Executive Officer. "At its meeting in New York City last month, the IFAC Board approved a new project that will analyze actions currently being taken to address the suitability of business reporting and identify areas for future development. This project will take the findings of the financial reporting supply chain report to the next stage and deliver specific recommendations for further action."

The full report, Financial Reporting Supply Chain: Current Perspectives and Directions, is available on the IFAC website.

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

This independent report, commissioned by IFAC, highlights improvements that have been made to the financial reporting supply chain in recent years and identifies areas for further improving the usefulness of financial reports.

A new publication released by the International Federation of Accountants (IFAC) addresses a wide range of topics that can assist professional accountants in business with their management, strategic and financial decision making. The publication, 2007 Articles of Merit, includes 10 previously published international articles that were selected by IFAC's Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business.A new publication released by the International Federation of Accountants (IFAC) addresses a wide range of topics that can assist professional accountants in business with their management, strategic and financial decision making. The publication, 2007 Articles of Merit, includes 10 previously published international articles that were selected by IFAC's Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business.

The winning article for 2007 is "Finding the Right Mix: How to Match Strategy and Management Practices to Enhance Firm Performance" by Kip R. Krumwiede and Shannon L. Charles. It was first published in the Institute of Management Accountants' monthly magazine, Strategic Finance. The authors' investigation into the use and adoption of popular management practices finds that highly rated practices such as target costing, the balanced scorecard, and activity-based costing have had relatively low adoption. However, their research identified that those organizations that did adopt these practices found that they produce valuable results. Using this research as a basis, the article suggests a five-step process to facilitate the matching of management practices to organizational strategy.

Other articles of outstanding merit cover topics such as key performance indicators, the art of management accounting, evaluating the return on information technology investments, XBRL, environmental management accounting, and board processes.

The 2007 Articles of Merit, together with past issues, can be downloaded from the IFAC online bookstore (www.ifac.org/store). The 10 articles in the 2007 publication can also be downloaded individually from the IFAC bookstore.

Founded in 1977, IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. Through its Professional Accountants in Business Committee, IFAC issues guidance to encourage high quality performance by professional accountants in business.

One of the best defenses against business failure and an important driver of business performance is strong internal control. This is true for organizations globally. Recognizing this, the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released a new publication on Internal Control from a Risk-Based Perspective.

This information paper features interviews conducted by Robert Bruce, a leading financial journalist, with 10 senior-level professional accountants in business on their experiences and views on establishing effective internal control systems. The interviews help to demonstrate the importance of a risk-based approach to internal control in helping an organization manage its overall risk. They also shed light on the nature of risk in organizations, how to establish an internal control system focused on driving performance and supporting the delivery of strategic objectives, and success stories that can help organizations in considering improvements to their approach.

"The flood of rules and requirements that resulted from past corporate failures, and the often time-consuming and costly compliance efforts, make us easily forget that the right kind of internal controls - focused on the real risks of an organization - actually can save time, money and ensure creation and maintenance of value," emphasizes Edward Chow, Chair of the PAIB Committee.

"These interviews will help professional accountants in business and their organizations to benchmark their own organizations' internal control efforts and philosophy." This interview-based information paper is part of a larger PAIB Committee project on internal control. In 2006, the committee published an overview paper, Internal Controls - A Review of Current Developments, which reviewed current developments and some of the latest thinking in the area of internal control.

These two publications form the groundwork for the development of principles-based good practice guidance on internal control, which the PAIB Committee plans to issue in 2008. Internal Control from a Risk-Based Perspective can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store. A range of other publications on topics of interest to professional accountants in business is also available from the IFAC bookstore.

Founded in 1977, IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. Through its Professional Accountants in Business Committee, IFAC issues guidance to encourage high quality performance by professional accountants in business.

This information paper features interviews with 10 senior-level professional accountants in business on their experiences and views on establishing effective internal control systems.

The International Federation of Accountants (IFAC) is inviting all participants in the financial reporting supply chain, including investors and other users of financial reports, standard setters, preparers, auditors, academics, and regulators to complete a global survey designed to obtain information that could strengthen the financial reporting process.The survey, which may be completed through July 6, 2007, is part of an IFAC project designed to analyze the financial reporting supply chain and to develop recommendations to further improve the quality of financial reporting. It can be accessed online in Publications & Resources.

Specifically, the survey seeks the views of those in the financial reporting supply chain on corporate governance, financial reporting, and financial auditing and asks what actions they think will further improve the quality of the financial reporting process. The survey will be complemented with a number of in-depth one-on-one interviews.

"The survey and interviews also seek opinions on the usefulness of financial reports and how these reports might be made more relevant, understandable and reliable. This information is especially valuable as, ultimately, it is the financial reports that influence investors and other stakeholders in their decisions about public companies," states project chair Norman Lyle. Mr. Lyle recently retired as Group Finance Director of Jardine Matheson Holdings Limited in Hong Kong and is a former President of the Chartered Institute of Management Accountants (CIMA) in the United Kingdom, an IFAC member body.

This global initiative will evaluate past recommendations made by IFAC to improve the quality of the various links in the financial reporting supply chain, including those expressed in the IFAC reports, Rebuilding Public Confidence in Financial Reporting: An International Perspective(2003) and Challenges and Successes in Implementing International Standards: Achieving Convergence to IFRSs and ISAs (2004). It will also identify newly emerging issues and innovations and develop proposals to further improve the quality of the financial reporting process. A final report will be issued by the end of the year and will be posted on the IFAC website.

Founded in 1977, IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

This International Good Practice Guidance is designed to assist professional accountants and their organizations to develop and implement a code of conduct in a values-based culture.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) invites its members and associates to submit outstanding published articles on topics of interest to accountants in business for its 2007 Articles of Merit Award for distinguished contribution to the development of the role and domain of the professional accountant in business.

The Articles of Merit Award is designed to facilitate communication and the sharing of knowledge on key financial and management accounting topics among IFAC's member bodies and their members in business. From among the articles submitted by member bodies, the PAIB Committee will select approximately 10 winning articles that will be published in an information paper, Articles of Merit: 2007. Articles selected for publication are those that have made or will make a distinct and valuable contribution to the advancement of PAIBs.

The annual Articles of Merit publications are widely distributed and read, providing a means for member bodies, authors, and the journals in which the articles are published to obtain recognition worldwide. A press release announcing the award winners is sent to all IFAC members, associates, and regional accountancy bodies, as well as the international media, who may download the publication free of charge from the IFAC website.

In addition, PAIBs worldwide are notified through IFAC's electronic news vehicles. In 2006, nearly 5,000 copies of past Articles of Merit publications were ordered or downloaded by accountants in business and other professionals worldwide from the IFAC website.

How to Nominate Articles
Members and associates are encouraged to nominate up to three articles for the 2007 Articles of Merit. All submissions must be in English and must be received by the PAIB Committee staff no later than April 20, 2007. For more information on how to submit articles, see the 2007 Articles of Merit Call for Nominations which is posted in the Discussion Board on the IFAC MemberNet.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

Good morning ladies and gentlemen. It is a pleasure to be here with you for this CFO/CFO forum. I would like to thank the new President of the South Asian Federation of Accountants (SAFA), Mr. Indrajith Fernando, for his kind invitation to address you this morning.

Since its founding in 1984, SAFA has been an example of how regional integration and collaboration can help to strengthen the global profession. so that together we can more effectively contribute to the integral development around the world. When I speak about integral development, I refer to a development that reaches both the economic, the social and the cultural spheres.