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TABLE OF CONTENTS

1. The Paradox of Climate Change: The Challenge for the Professional. Presented by: Ibironke Olabamise, National Coordinator, GEF Small Grants Program implemented by UNDP. (Day 1 paper, page 3) 2. Speech by the President/Chief Executive, Dangote Group, Alhaji Aliko Dangote, CON: The Changing Role Of Chartered Accountants in Value Creation and Business Sustainability. (Day2 paper, page 129) 3. Infrastructure Transformation and Sound Financial Management for Nigeria Socioeconomic Development. Presented by: Dr(Mrs) Okonjo Iweala, the coordinating Minister for the Economy and the Honorable Minister of (Day 2 Paper, page 165) 4. Issues And Challenges Of International Financial Reporting Standards (Ifrs) Adoption For Emerging Economies by: Obazee Jim Osayande (Day 3, Page 24) 5. The paradox of Climate Change: The Challenge For Professionals. Presented by: Kighir Apedzan Emmanuel, PhD, FCA, Enironmental Accountant, Nassarawa State University, Keffi (Day 3 paper, Page 80) 6. Performance Measurement in the Public Sector The Accountability Challenge. By Sam S.O Afemikhe, (Day 3 paper, page 137) 7. Improving Accounting and Auditing Practices Globally: The Roles of IFAC, Regional Accountancy Bodies and Development Partners, and Lessons from Experience (Day 3, page 186)

The Paradox of Climate Change: Th Ch ll Ch The Challenge for the Professional


Presented by: Ibironke Olubamise National Coordinator Olubamise, Coordinator, GEF Small Grants Programme implemented by UNDP i l t db

Outline
Environment and Climate Change Issues and Challenges National Efforts Opportunities Way forward Conclusion

Science for the Accountants

The Environment is
Source of raw materials and energy (non-renewable (non renewable resources); Provider of services such as the maintenance of climatic system/stability and ecological cycle t / t bilit d l i l l (renewable resources) including forest, agricultural land, water etc; Si k for waste. Sink f

Science for the Accountants

Science for the Accountants


28 MEAN SURFACE TEMPERATURE OVER NIGERIA S U R FA C E TE M P E R A TU R E (oC ) (
y = 0.0244x + 26.09

27.5 27 5

AIR TEMP

27

MEAN Linear (AIR TEMP)

26.5 26 5

26 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005

YEARS

Mean surface temperature over Nigeria (Ojo, 2008)

Some facts
Since 1940 carbon dioxide from fossil fuel has increased from <2 billion tones per a u annum to nearly 13 billion tonnes per ea y 3 b o to es pe annum. Over the same period the global surface temperature has grown by about 0.40C. Th i very strong evidence of cause and There is t id f d effect.

Some facts (contd) ( )


With current trends atmospheric carbon p dioxide will double in next hundred years. g g And will increase global average temperatures by about 1.0oC. A rise of 1C or 2.5 C does not seem much. 1 C 2.5C But the difference between the coldest period of an Ice Age and the warmest period of the subsequent interglacial is only 5-6 C. 5 6C

What are the causes?


Nature and natural resources are seeing as infinite, free and not to be accounted for , Unsustainable exploitation of natural resources ( i NTFP watersheds, etc) (agric, NTFP, t h d t ) Inappropriate valuation of natural resources pp p

Results
Deforestation Biological di i l i l diversity d l i i depletion g Drought and desertification Land resources degradation O Ocean surge and fl di d flooding Water and air pollution Urban decay and municipal waste Cli t Ch Climate Change

The effects

Ecological Zones of Nigeria in 1976/78

Ecological Zones of Nigeria in 1995

Effects (contd)

A typical desertified environment and typical erosion site

A typical waste dump and yp p deforested sites

Why do these concern us?


Threats to live and living Business opportunities and growths Loans and Insurance What d Wh do we hand over to the next h d h generation (someone says impart before you depart. what is live without a legacy?) d h i li ih l ?)

And for business business

A typical coastal flood

A typical gas flare

Implications
Flooding Crop production Diseases such as malaria, whose incidence i h l i h i id is affected by temperature and precipitation, Many vulnerable ecosystems and biodiversity will be adversely affected. Loss of livelihoods and communities Economic loss

What is needed?
Better information Stronger mitigation Development of adaptation measures. Climate Risk Assessment

National efforts
Special Climate Change Unit (SCCU) of the Federal Ministry of Environment Different environment related policies and p regulations Party to a number of Multilateral Environmental b f l il l i l Agreements (MEAs)

Estimated Cost
Global annual estimates for adaption as suggested by UNFCCC could be about $70bn or $100bn (44bn and 63bn) by 2030 2030, This is the cost of about three Beijing Olympics. Olympics But other scientists have now suggested that the true annual cost could easily reach $300bn or more. more

Opportunities for the professionals


Clean Development Mechanism and carbon trading Waste to wealth Efficient use of natural resources including best practices Innovative technological development from natural products Industrialization, trade and investment opportunities (e,g. Tourism T i export of flowers) t f fl ) Collaboration with environment advocacy groups E h Enhanced research and development (R&D) d h dd l Engagement of development partners for technology transfer

Practical Efforts
Commitment to challenge the status quo Corporate Environmental Management System Environmental Risks Assessment of business operations Support for environmental advocacy groups Collaborate and Participate in MEAs, REDD+ United Nations Environment Programme (UNEP FI)

THANK YOU

MERCI

ISSUES AND CHALLENGES OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ADOPTION FOR EMERGING ECONOMIES

by
OBAZEE, JIM OSAYANDE

Introduction I d
IFRS and Professional Accountants

Countries are defining their road maps

Governments concern G
Attraction of Foreign Direct Investment (FDI); Assurance of easier access to external capital for local and domestic companies. Easier regulation of financial information of entities. Enhancement of Local and Foreign Investors confidence in the quality assurance systems of financial reporting in public and private sector entities. entities Job creation; because graduates of accounting and related fields shall become internationally acceptable and employable.
6

In Nigeria... I N
A Road map committee was inaugurated on p g October 22, 2009. The Road Map committees report was submitted January 26, 2010. 26 2010 Government took a decision on July 28, 2010 to adopt IFRS by major overhaul effective January 1, 2012 .
7

Nigerias Road map

ISSUES AND CHALLENGES OF IFRS ADOPTION FOR EMERGING ECONOMIES

10

WHO IS RUNNING THE SHOW?

11

12

Issues considered by the Nigeria y g Roadmap committee Sh ld IFRS f Ni i come as a quick fi or Should for Nigeria i k fix major overhaul? When, for instance, should reporting entities begin to use IFRS voluntarily before a national agenda mandates its use? What are the implementation challenges and steps to address them during the transition. What effect will adoption of IFRS have on p p private companies, SMEs, Micro-entities, NGOs and NotFor-Profit Organisations.
13

Wh t should be our national response to What h ld b ti l t international accounting standards that are less rigorous to some peculiar accounting problems arising from our jurisdiction. What should be our national response to industry specific accounting activities that are either not in the work plan of IASB or still at the theoretical stage in their agenda but, urgent to us due to national specificities. What should be the authority of IASBs pronouncements .
14

What impact will adoption of IFRS have on regulatory/statutory and tax reporting? Since IFRS is fluid, how should our jurisdiction handle this dynamism? How do we handle enforcement, legal and technical i t h i l issues? ? What will be the future role of the NASB in the entire compose?
15

INITIAL ISSUES FROM A REGULATORY STANDPOINT

16

FRC IASB
NationalGAAP
National Accounting Standards

IFRS
IFRS IAS IFRSIC SIC
17

A Decision with Implications D hI l


Consumers of of Financial Data

IFRS
FRC Government Companies C i

Software Software Vendors

Tertiary Institutions

Accountants (Public/Private)

Accounting Firms/ Institutes

18

PRACTICAL IMPLEMENTATION ISSUES FOR EMERGING ECONOMIES

19

Legal, Governance and Regulatory framework The implementation of IFRS requires considerable preparation both at the country and entity levels to ensure coherence and provide clarity on the authority that IFRS will have in relation to other existing national laws. The scope of application of IFRS with respect to the size of entities: consolidated or entity levels? y The state of readiness of relevant professional accountancy organisations. The sincerity of peer review programmes among auditors.
20

The requirement for Technical Partners Forum (of accounting firms) that can identify financial reporting issues that require clarification in order to avoid inconsistencies; as national accounting firms could i it i ti l ti fi ld contribute to inconsistent application of IFRS. Limited number of professional accounting organisations, preparers and users, including regulators that can provide the IASB with useful feedback, not only after standards are finalised and ready for implementation but early in the implementation, drafting process. The extent of integration of IFRS modules into university g y accounting education.
21

I tit ti l Issues: The shortage of expertise in the Institutional I


field of IFRS affects not only the private sector, but also regulators and other government agencies.

Technical Issues : Complexities of some


international accounting standards., IFRS Taxonomy, XBRL, Electronic filing, etc.

Enforcement Issues: The extent of preparedness of


enforcement authorities to play positive roles in consistent implementation of IFRS b f ilit ti sharing of i l t ti f by facilitating h i f enforcement decisions.
22

Tax issues:
IFRSs have been developed primarily to meet the information needs of p p y shareholders, lenders and other investors. These needs do not always align with those of the tax authorities (e.g. extensive use of fair value and the application of substance over form) From taxation point of view, however, there are additional variables that may influence tax position such as impairment, fair value adjustments, specific provisions and treatment of tax losses etc. IFRS is a new world order, in corporate reporting, that will alter not only the financial accounting and reporting landscape in jurisdictions but also tax accounting/reporting, tax cash flows and tax distributable reserves.
23

Language and Translation issues. Convergence options (Adoption or Adaptation) N Normative Isomorphism (ESCAFA PAFA, ti I hi (ESCAFA, PAFA FIDEF, etc) ... Political and regional influence (Donor agencies) i fl (D i ) Corporate Governance issues (Board, Audit Committees, ownership structure)
24

Is IFRS Adoption a bad news?

25

26

IFRS is not an impossible task for Emerging p f g g Economies.


Government will need to play its role. g p Entities will have to take the following steps: Carry out a detailed gap and impact analysis. Check the sustainability of their systems and processes. Understand the financial and business impact and finally. finally Equip their critical key factor People.

27

Government

28

Institutional Arrangements There is the need to consider the functions of institutional bodies associated with financial reporting standards or having operational interest in financial reporting as well as consider the appropriate functions, powers and operational arrangements of such institutional bodies.

A particular issue in this regard is considering the ti l i i thi di id i th inclusiveness of process. Such usually bear upon: Transparency standards (Data transparency, Fiscal transparency and Monetary and financial transparency) Financial sector standards (Banking supervision, Securities market regulation, Insurance regulation, S ii k l i I l i Payment systems and Anti-money laundering) and Market integrity standards (Corporate governance, Accounting and Auditing, and Insolvency and creditor rights).

Countries such Nigeria, Malaysia and the Mauritius now have arrangements whereby a wider selection of stakeholders other than accountants, accountants including representatives from a cross-section of the market and other interests; have a meaningful role in financial reporting infrastructure via a Financial Reporting Councils arrangement. Council s

32

Enforcement E f
Enforcement is considerably more complicated than establishing a strong regulator. Some of the g g g elements of an enforcement regime include:
Sound systems of corporate governance. Self-enforcement by companies during the preparation of financial statements.

approval of financial statements (by audit committees, Board of directors and Annual General Meetings of Shareholders). g )

Statutory audit of financial statements. Analysis provided by the public and press. Market forces that can punish companies for poor disclosure.

Institutional oversight system.


Courts; through sanctions and/or complaints.

WHAT ARE THE EXPECTATIONS FROM COMPANIES?

35

36

37

High-level IFRS impact assessment Id if i the key impacts of IFRS Identifying h k i f throughout your organization. Focusing not only on accounting and systems impacts, but also on impacts in such areas as income taxes, sales contracts, loan agreements and employee compensation arrangements. Also to be considered is the application of IFRS by subsidiaries (for companies with global 38 operations).

D Determining project interdependencies and i i j i d d i d lead-times by mapping the necessary


implementation actions and evaluating the time i l t ti ti d l ti th ti needed to complete such actions.

E ti ti resource needs: an estimate of the Estimating d ti t f th


time and resources needed to complete the company-specific roadmap designed to enable an orderly migration to IFRS, while anticipating and mitigating risk, and facilitating greater value for g g , gg the organization.
39

A Assess the effectiveness of general computer th ff ti f l t controls that impact on external financial disclosures. disclosures General IT controls relate to: 1. 1 Information technology control environment 2. Programme development 3. 3 Programme change 4. Access to programmes and data 5. C 5 Computer operations. t ti
40

Prepare for Dual reporting


The approach will require GAAP reconciliation through either of two options: The traditional IFRS first-time adoption reconciliation. reconciliation One requiring that step plus an ongoing unaudited reconciliation of th financial di d ili i f the fi i l statements from IFRS to National GAAP.
41

NATIONAL SUPPORT FOR EFFECTIVE TRANSITION

42

Public sensitization Passage of Financial Reporting Council Bill S o SMEs: Consultation w t N CC IFRS for S s: Co su tat o with NACCIMA Creation of IFRS Academy NUC to update syllabus of Tertiary institutions institutions. Creation of a dedicated Website Review existing legislation that are inconsistent with effective implementation of IFRS Update of Information Technology (IT) Systems and Chart of Accounts in the public sector.
43

Working on tertiary institutions W k


Linkage and awareness programme Course content for Tertiary institutions T i the Trainers Train th T i
44

On A d O Auditing f firms and Entities dE

Technical Partners Forum Li i Liaison meetings i

45

WHAT ARE REGULATORS TO CONSIDER NOW?

46

Primary regulators are to shape their j i di ti l titi th i jurisdictional entities p p perspective of IFRS by opening y p g discussions with the management of such entities on the potential risks and benefits of IFRS.
47

SET THE TONE (by raising the following key questions).

Has management aligned key stakeholders? What is management doing about communications? What steps are being taken to educate the organization? i ti ?
48

Non Technical accounting issues

Set up help desk to assist in assessing other issues like t i th i lik tax, internal processes and controls, p regulatory and statutory reporting, technological infrastructure, and infrastructure organizational issues
49

Focus on the process.


Regulators are to focus on overseeing company s approach, timeline, companys approach timeline and remotely; budget for transition. Regulators are expected to encourage management to consider short and longterm planning issues in determining what the company needs to do now versus later.
50

51

Factors that will guarantee success

The right skills Th right equipment The i ht i t The right mindset g


52

CONCLUSION

53

There are world-wide emerging pressures with growing competition, globalisation and technological i h l i l innovations which will, if i h not, i hi h ill it has compel market operators to change.

At such, a higher standard of financial disclosure and better information for market participants (capable of underpinning disclosure based disclosure-based regulation and better ability to attract and monitor listings by foreign companies) are now unavoidable. These are the new roads to capital that are capable of promoting economic growth growth.

THANK YOU

56

THEPARADOXOFCLIMATECHANGE:THECHALLENGE FORPROFESSIONALS. FOR PROFESSIONALS

BY KIGHIR, APEDZANEMMANUELPhD,FCA apedzankighir2007@yahoo.com, d ki hi 200 @ h ENVIRONMENTALACCOUNTANT NASARAWASTATEUNIVERSITYKEFFI,NIGERIA

INTRODUCTION
CLIMATECHANGEisalongtermchangeinthestatistical distributionofweatherpatternsoverperiodsoftimethat rangefromdecadestomillionsofyears.Itmaybeachange intheaverageweatherconditionsorachangeinthe distributionofweathereventswithrespecttoanaverage. di t ib ti f th t ith tt Climatechangemaybelimitedtospecificregionormay occuracrossthewholeEarth.Inrecentusage,especiallyin thecontextofenvironmentalpolicy,climatechangeusually the context of environmental policy climate change usually referstochangesinmodernclimate..Itmaybequalifiedas anthropogenicclimatechange,moregenerallyknownas globalwarming. global warming. TheSecretaryGeneraloftheUnitedNationshascalled climatechangeadefiningissueofourera. Ithasinrecent yearsemergedasanimportantglobalchallenge. years emerged as an important global challenge

INTRODUCTIONcont INTRODUCTION cont


According to the 2007 Fourth assessment report Accordingtothe2007Fourthassessmentreport byIntergovernmentalPanelonClimatechange ( (IPCC),globalsurfacetemperatureincreasedby ), g p y 0.74duringthe20thcentury. Correspondingly,theatmosphericconcentration ofCO2,themostsignificantGHG,hasincreased from280partspermillion(ppm)inthepre industrialperiodto379ppm in2005.

INTRODUCTIONcont INTRODUCTION cont


TheUnitedStatesNationalAcademyofscience (2008),confirmthatmostoftheobservedtemperature increasesincethemiddleofthe20thcenturyhasbeen causedbyincreasingconcentrationsofgreenhouse y g g gasesfromhumanactivities(anthropogenicsources). Greenhousegasesarethosegaseousconstituentsof theatmosphere,bothnaturalandanthropogenic the atmosphere, both natural and anthropogenic (resultingfromhumanactivity),thatabsorbandemit radiationatspecificwavelengthswithinthespectrum ofinfraredradiationemittedbytheearth ssurface,the of infrared radiation emitted by the earths surface the atmosphereandclouds.Thisisknownasgreenhouse effect.

INTRODUCTIONcont INTRODUCTION cont


THEGREENHOUSEEFFECTistheworkofFourier (1824),Tyndall(1865)andArrhenius(1896).The greenhouseeffectisaprocessbywhichthermal radiationfromaplanetaryEarthsurfaceis radiation from a planetary Earth surface is absorbedbyatmosphericgreenhousegases,and isreradiatedinalldirections.Sincepartofthis reradiationisbacktowardsthesurface,energyis di ti i b k t d th f i transferredtothesurfaceandthelower atmosphere.Asaresult,thetemperaturethereis p , p higherthanitwouldbeifdirectheatingbysolar radiationweretheonlywarmingmechanisms.

INTRODUCTIONcont:GREENHOUSEGASES Source:wikipedia

INTRODUCTIONcont INTRODUCTION cont


This mechanism is fundamentally different Thismechanismisfundamentallydifferent fromthatofanactualagricultural greenhouse,whichworksbyisolatingwarm greenhouse which works by isolating warm airinsidethestructuresothatheatisnotlost byconvention,thuswarmingplantnursery. by convention thus warming plant nursery Theimplicationisthatthegaseshavemadea housethatcoverstheearth. house that covers the earth

INTRODUCTIONcont:GREENHOUSE Source:wikipedia S iki di

INTRODUCTIONCONT.CARBONCYCLE source:buzzle.com b l

INTRODUCTIONCONT.CARBONCYCLE INTRODUCTION CONT. CARBON CYCLE


Intheprocessofphotosynthesis,atmosphericcarbonisabsorbedby plants. plants Thiscarbonistransferredfromplantstotheanimalsfeedingonthem,and furthermovesupthefoodchain. p , g p Respiration,digestionandmetabolisminplantsandanimalsresultin sometransferofcarbonbacktotheatmosphere. Somecarbonalsomovestothelithospherewhentheselivingorganisms dieorwhenwoodandleavesdecay(deforestation)orwhenanimals excrete.Someoftheselivingbeingsburiedmillionsofyearsagohave excrete Some of these living beings buried millions of years ago have beenconvertedtofossilfuels(coal,petroleum,naturalgas,keroseneetc). Miningandburningoffossilfuelscausethiscarbontomovefromthe lithospheretotheatmosphere. Someofthisatmosphericcarbongetsdissolvedintheoceansandothers f hi h i b di l d i h d h absorbedbytheplantsagainintheprocessofphotosynthesisthus completingthecycle.

INTRODUCTIONcont INTRODUCTION cont


The higher the concentration of greenhouse Thehighertheconcentrationofgreenhouse gaseslikecarbondioxideintheatmosphere, themoreheatenergyisbeingreflectedback the more heat energy is being reflected back totheEarth.Theemissionofcarbondioxide intotheenvironmentmainlyfromburningof into the environment mainly from burning of fossilfuels(coal,petroleum,naturalgas, kerosene,etc.)andcementproductionhas kerosene etc ) and cement production has increaseddramaticallyoverthepast50years, seegraphbelow. see graph below

INTRODUCTIONcont INTRODUCTION cont


Theprimarynaturalgreenhousegasesinclude p y g g watervapour(H2O),carbondioxide(CO2),nitrous oxide(N2O),methane(CH4)andozone(O3)gases intheearth satmosphere.Theanthropogenic in the earths atmosphere The anthropogenic greenhousegasesincludeorganohalogen compounds,especiallychlorofluorocarbons(CFCs) andbromofluorocarbons coveredunderthe db fl b d d th monstreal protocol. Othersinclude hydrofluorocarbons (HFCs),perfluorocarbons y ( ), p (PFCs)andsulphur hexafluoride(SF6)covered undertheKyotoprotocol.

INTRODUCTIONcont INTRODUCTION cont


TheMontrealProtocol(1987,1992)isnamedafterthesecond largestcityinCanadawhereaninternationaltreatywassignedby l t it i C d h i t ti lt t i db 196countries,onSubstancesThatDepletetheOzoneLayer.The ozonelayerisalayerinEarthsatmospherewhichcontains relativelyhighconcentrationsofozone(O3).Ozonelayerwas y g ( ) y discoveredbytheBritishphysicistSidneyChapman.Chapman (1930),believesthatthislayerabsorbs9799%ofthesunshigh frequencyultravioletlight(UVB),whichisdamagingtolifeonEarth andisbelievedtocausesunburnandskincancer. and is believed to cause sunburn and skin cancer Theozonelayercanbedepletedbyfreeradicalcatalysts,including nitricoxide(NO),nitrousoxide(N2O),hydroxyl(OH),atomic chlorine(Cl),andatomicbromide(Br).Whiletherearenatural ( ), ( ) sourcesforallofthesespecies,theconcentrationsofchlorineand brominehaveincreasedmarkedlyinrecentyearsduetotherelease oflargequantitiesofmanmadeorganohalogen compounds, especiallychlorofluorocarbons(CFCs)andbromofluorocarbons. especially chlorofluorocarbons (CFCs) and bromofluorocarbons

INTRODUCTIONcont INTRODUCTION cont


Thesehighlystablecompoundsarecapableof survivingtherisetothestratosphere(Thesecond majorlayerofEarthatmosphereaftertropospherebut belowthemesosphere),whereCl andBrradicalsare p ) liberatedbytheactionofultravioletlight.Eachradical isthenfreetoinitiateandcatalyzeachainreaction capableofbreakingdownover100,000ozone p g molecules.Thebreakdownofozoneinthe stratosphere(secondmajorlayerofatmosphere) resultsintheozonemoleculesbeingunabletoabsorb g ultravioletradiation.Consequently,unabsorbedand dangerousultravioletBradiationisabletoreachthe Earthssurface.

INTRODUCTIONcont INTRODUCTION cont


1992UNFCCC With192memberStates,UNFCCCsetsanoverall frameworkforinternationaleffortstotackleclimate change.Theconventionplacesaheavierburdenon change. The convention places a heavier burden on developedcountriestoreduceGHGemissionsunder theprincipleofcommonbutdifferentiated responsibilities .Whiledevelopingcountriesarenot responsibilities. While developing countries are not boundbyanyspecifiedemissionreductiontargets,by 2000developedcountrieshadtoreducetheirGHG emissionsto1990levels.Theyarealsorequiredto emissions to 1990 levels They are also required to promoteandfacilitatethetransferofclimatefriendly technologiestodevelopingcountriesandtocountries witheconomiesintransition. with economies in transition

INTRODUCTIONcont INTRODUCTION cont


TheKyotoProtocol(1997,2005)isacityinsouthernJapan whereaninternationaltreatylinkedtotheUnitedNations FrameworkConventiononClimateChange(UNFCCCor FCCC),aimedatfightingglobalwarmingwassigned.The UNFCCCisaninternationalenvironmentaltreatywiththe UNFCCC i i t ti l i t l t t ith th goalofachieving"stabilizationofgreenhousegases concentrationsintheatmosphereatalevelthatwould preventdangerousanthropogenicinterferencewiththe prevent dangerous anthropogenic interference with the climatesystem.KyotoProtocoldealswithgreenhousegases suchashydrofluorocarbons (HFCs),perfluorocarbons (PFCs)andsulphur hexafluoride(SF6)TheProtocolwas (PFCs) and sulphur hexafluoride (SF6) The Protocol was initiallyadoptedon11th December1997inKyoto,Japan andenteredintoforceon16th February2005.AsofJuly 2010,191states ,

INTRODUCTIONcont INTRODUCTION cont


AsofJuly2010,191stateshavesignedandratifiedtheprotocol. ThemajorfeatureoftheKyotoProtocolisthatitsetsbinding Th j f t f th K t P t l i th t it t bi di TARGETSfor37industrializedcountriesandtheEuropean communityforreducinggreenhousegas(GHG)emissions. The outcome of the meeting was the Kyoto Protocol in which the TheoutcomeofthemeetingwastheKyotoProtocol,inwhichthe industrializedcountriesandeconomiesintransitionthesocalled Annex1countriesagreedtocuttheiroverallGHGemissions duringthefirstcommitmentperiod(20082012)byabout5% relativetothelevelsemittedin1990(thebaselineyear).National l ti t th l l itt d i 1990 (th b li ) N ti l targetsrangefrom8%reductionsfortheEuropeanUnionandsome others,6%forJapanandCanada,0%forRussia,andpermitted increasesof8%forAustraliaand10%forIceland.

INTRODUCTIONcont INTRODUCTION cont


Theprincipalhumansourcesofthesegasesinclude:Carbon p p g dioxide(CO2),whichisproducedmainlyfromfossilfuels throughburning,powerplantsanddeforestation.The methane(CH4)isproducedmainlyfrompaddyrice methane (CH4) is produced mainly from paddy rice fields,livestockdigestionprocessesthroughmanureand livestockfermentation,coveredlandfills,landuseand wetlandchanges,coalmining.Nitrousoxide(N2O)is ( ) producedfromagriculturalactivitiesthroughnitrogenbased ( ) p fertilizerandcattlewastefeedlots.Ozone(O3)isproduced throughcarexhaustpollutantssuchascarbonmonoxideand nitrogenoxide.Thestudytriestobringtolimelightthe dangersassociatedwiththegreenhousegasesandtodraw dangers associated with the greenhouse gases and to draw stakeholdersattentiontotheirenvironmentalandsocial responsibilityregardingtheimpendinghumancatastrophes.

INTRODUCTIONcont INTRODUCTION cont


THEEFFECTOFGLOBALWARMING.Twomajoreffectsof globalwarmingwereidentifiedi)Increaseof temperatureontheearthbyabout3 to5 C(5.4 to9 Fahrenheit)bytheyear2100.ii)Riseofsealevelsbyat Fahrenheit) by the year 2100 ii) Rise of sea levels by at least25meters(82feet)bytheyear2100.Theincrease inglobaltemperaturesisbelievedtobecausingabroad rangeofchanges.Sealevelsarerisingduetothermal expansionoftheocean,inadditiontomeltingofland ice.Thetotalannualpowerofhurricaneshasalready ice The total annual power of hurricanes has already increasedmarkedlysince1975becausetheiraverage intensityandaveragedurationhaveincreased(in addition,therehasbeenahighcorrelationofhurricane powerwithtropicalseasurfacetemperature)

INTRODUCTIONcont INTRODUCTION cont


Changesintemperatureandprecipitation g p p p patternsincreasethefrequency,duration,and intensityofotherextremeweatherevents,such asfloods,droughts,heatwaves,andtornadoes. as floods droughts heat waves and tornadoes Othereffectsofglobalwarmingincludehigheror loweragriculturalyields,furtherglacial retreat,reducedsummerstreamflows,species t t d d t fl i extinctions.Asafurthereffectofglobal warming,diseaseslikemalariaarereturninginto g, g areaswheretheyhavebeenextinguishedearlier

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALS
ChallengetoHumanHealthPractitioners Chapman(1930),believesthatthesunshighfrequencyultravioletlight ( ) (UVB),whichisasaresultofdepletedozonelayerisdamagingtolifeon Earthandisbelievedtocausesunburnandskincancer,hotter atmosphereleadingtoheatwavesandmigrationwithincities,Stagnant waterduefloodingmayincreaseinfectionssuchasmalariaandwater d fl d f h l d bornediseases. ChallengetoNaturalReliefOrganisationslikeNEMA,RedCrossand InsuranceProfessionals i)RisingsealevelsmayleadtohurricanesliketherecenthurricaneKatrina thatravagedtheU.S.A,ii)floodingliketherecenttsunamifloodingthat threatenedhumanexistenceacrossAsia.iii)Storms,iv)wildfirestriggered bystorms,v)Lossofloveonesandpropertiesaswitnessedduringtsunami by storms v) Loss of love ones and properties as witnessed during tsunami andHurricaneKatrina.vi)Naturaldisasterreliefwillbecomehardertofind asorganizationslikeRedCrossandNationalemergencymanagement Agencymaybeputunderstrain.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALS CHANGE FOR PROFESSIONALS CONT ChallengetocoastalinfrastructureandValuation Challenge to coastal infrastructure and Valuation Professionals Landowners deeply affected by climate Landownersdeeplyaffectedbyclimate changewillsufferassetvalueloss,suchas familieswhomigrateawayfromcement factorysites,miningsites,oilspillageandgas flaredsites,beacheslikeVictoriaIslandand Ikoyi inNigeriamaybeaffectedbyrising Ik i i Ni i b ff db i i oceanwaves.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT EconomicandSocialDevelopmentProfessionals Economic and Social Development Professionals i)Foodsecuritywillbethreatenedasdrought andnaturaldisasterswilldestroyexisting and natural disasters will destroy existing crops,ii)Waroverwaterasaresultofdrought maydevastatesocieties,iii)TheUN may devastate societies iii) The UN millenniumdevelopmenttargetmaybecome difficulttoachieve. difficult to achieve

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


C a e ge o c a t ots ChallengeToAircraftPilots Commercialairlinerstypicallycruiseataltitudes of912km(30,00039,000ftabovesealevel)in temperatelatitudes(inthelowerreachesofthe stratosphere). Theydothistooptimizefuelburn, mostlyduetothelowtemperaturesencountered tl d t th l t t t d nearthetropopause andthelowairdensitythat reducesparasiticdragontheairframe.Italso reduces parasitic drag on the airframe. It also allowsthemtostayaboveanyhardweatheror extremeturbulence.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


ChallengetoSailors,globaltradeandsecurity. AccordingtoUNCTAD(2009),Internationalmaritime transportcarriesover80percentofthevolumeofworld tradeandisvitaltoglobalizedtrade.Likeothereconomic sectors,itisfacingadualchallengeinrelationtoclimate t it i f i d l h ll i l ti t li t change:theneedtoreduceitscontributiontoglobalwarming Internationalshippinggeneratesaround3percentofglobal CO2emissions from fuel combustion and the need to adapt emissionsfromfuelcombustion andtheneedtoadapt totheimpactsofclimaticchanges.Ifleftunchecked,these emissions,whicharenotcurrentlycoveredbytheUNFCCC framework,areexpectedtoincreasebyafactorof2.2to3.1 , p y overthenextfourdecades.Atthesametime,maritimeand relatedtransportsystemsarealsolikelytobedirectlyand indirectlyaffectedbyvariousclimaticchanges,suchasrising sealevels,extremeweathereventsandrisingtemperatures, l l t th t d ii t t withbroaderimplicationsforinternationaltradeand development
.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


ChallengetoEnvironmentalTax(GreenTax)Practitioners: Environmentaltaxationisoneofthethreepronemeasures (Systemsofregulations,taxationsandmarketbased instrumentsofenvironmentalpolicy)introducedby governmentsallovertheworldtopreventenvironmental degradation.Environmentaltaxationreferstoanemission chargeorfeecollectedbygovernmentperunitofpollution emittedintotheairorwater.Thepolluterpaysprinciple. itt d i t th i t Th ll t i i l Thismeasurebecamenecessaryasthetraditional regulatoryenvironmentalpolicyintroducedinthe1970s wasnotmanagingenoughtopreventfurtherunacceptable was not managing enough to prevent further unacceptable environmentaldamage.Inaddition,itwasfearedthatthe costsofattemptingtomakeitachievethismaybegreat.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


Theenvironmentalpolicymakersthenstartedthinkingofalternatives suchastaxesandmarket basedinstruments.Thisisbecause:i)Therehas beenincreasedawarenessofthepowerandpotentialsofmarketsanda neworientationtowardsmarketsinpublicpolicy.ii)Increasedrecognition ofthelimitationsofgovernmentsingeneralandthetraditionalsystemof f h l f l d h d l f environmentalregulationsinparticular.iii)Increasedconcernthatsuch systemswerenotadequatelycopingwithenvironmentalproblemsbut wereimposingsubstantialeconomiccosts,leadingtoanewinterestin were imposing substantial economic costs leading to a new interest in otherinstrumentsthatmightoffermorecosteffectiveenvironmental policy.iv)Thedesiretomakefurtherprogresswiththeimplementationof the polluter pays principleandtointernalizetheenvironmentalcostsinto thepolluterpaysprinciple and to internalize the environmental costs into thepricesoftherelevantproductsandactivities.Thegreentaxeshave theirownchallengessuchasi)assigningtherightleveloftaxation,ii)The q y , ) p issueofequityandconsumerwelfare,iii)TheproblemwithEcotax reformerswhoinsistthat,introductionofpollutertaxesshouldberevenue neutral.Duetotheabovechallenges,marketbasedinstrumentsarebeing encouraged.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


Somenationalandsubnationalinitiativestodealwith climatechangehaveintroducedsomeregulations,taxes andlevieslikei)the2004CaliforniaregulationsonGHG emissionsfrommotorvehiclesandtheJapangreen taxationplanforautomobiles,aclimatechangelevyinthe t ti l f t bil li t h l i th UnitedKingdom;a2005climatechangeplanforCanada; AustraliasGHGabatementprogramme;acarbontaxand negotiatedGHGagreementinNewZealand;a2005lawon negotiated GHG agreement in New Zealand; a 2005 law on renewableenergyinChina;anationalbiodiesel programme inBrazil;GHGactionplansin30statesinthe UnitedStates;CalifornialawsonaState widecaponGHG United States; California laws on a Statewide cap on GHG emissions. InNigeriathemainmethodofmitigatingGHGemissionsis throughregulations,flaringfines,chargesandtaxes. through regulations flaring fines charges and taxes

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


ChallengetoAccountingProfessionandEnvironmental g g Accountants TheEUGreenhousegas(GHG)EmissiontradingScheme(EU ETS) In2005,theEuropeanUnion(EU)createdanewcommodity market theGreenhousegas(GHG)EmissiontradingScheme g ( ) g (EUETS)worth21billionEurosayear(Casamento2004).The marketisdividedintotwophases.Firstphase2005 2007 inclusive,Secondphase2008 2012inclusive.TheEUETS inclusive Second phase 2008 2012 inclusive The EU ETS requiresoperatorsofcertaininstallationsfromsectors coveredbytheschemetosurrender,by30Aprileachyear, allowancesequaltotheannualverifiedGHGemissionsfrom suchinstallationintheprecedingyear.Operatorswhofailto complywiththisconditionfaceapenaltyfornoncompliance

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALSCONT CHANGE FOR PROFESSIONALS CONT


ThepenaltyforthefirstphaseoftheEUETS(January2005 toDecember2007inclusive)issetatof40Eurospertonne risingto100Eurospertonne forthesecondphase(2008 2012).Theschemeisbasedontheconceptofcapand trade,wherebythetotalvolumeofGHGemissionsare t d h b th t t l l f GHG i i effectivelycappedbylimitingthenumberofallowances madeavailable.Participantsarealsoallowedtomanage theirpositionbytradingallowances.Forexample,if their position by trading allowances For example if emissionsexceedthenumberofallowances,anoperator canobtaintherequiredvolumeofallowancesby purchasingthemonthemarket.Alternatively,ifan purchasing them on the market. Alternatively, if an operatorhasexcessallowances,theyareabletopotentially profitoffthesebysellingthem.

ENVIRONMENTALCHALLENGESOFCLIMATE CHANGEFORPROFESSIONALS CHANGE FOR PROFESSIONALS


Theschemeisexpectedtocoversome12,000 p , installationsacrossanumberofsectors,including energy,productionandprocessingofferrous metals(e.g.ore,steel),minerals(e.g. metals (e g ore steel) minerals (e g cement,ceramics)andpulpandpaper.Interms ofgases,whilethedirectivethatestablishesthe schemecoversabasketofsixGHGs,thefirst h b k t f i GHG th fi t phaseoftheschemeonlycoverscarbondioxide. AccordingtoCasamento,intheUKalone,the g , , allocationofallowancestooneindividualentity forathreeyearperiod(basedontheUKdraft NationalAllocationPlan,January2004)is65m National Allocation Plan January 2004) is 65m allowances.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALS FOR PROFESSIONALS


CapandTradeProgrammes TheUnitedStatesCarbonCapandTradePlanisapolicy beingpracticedbythestateofCalifonia andbeing proposedbyPresidentBarackObamaatnationalthat wouldessentiallyputapriceoncarbondioxideemissions byauctioningoffpermitstoemitthegas.Thecapwould workbysettingamaximumamountofcarbontobe emittedintheUnitedStates,andthetradewouldallow itt d i th U it d St t d th t d ld ll thecarbonemitterstofreelytradecarbonpermitsamongst themselves. Th l Theplanwouldlikelybemodeledaftertwoothercapand ld lik l b d l d ft t th d tradeprograms,theUnitedStatesAcidrainprogramme, andtheEuropeanUnionsEUETS.

ENVIRONMENTALCHALLENGESOF CLIMATECHANGEFOR CLIMATE CHANGE FOR PROFESSIONALS KyotoCleanDevelopmentMechanism(CDM)andtheJoint


Implementation(JI).

Two separate "flexibility mechanisms"coveremissions Twoseparate flexibilitymechanisms cover emissions reducingprojectsundertheKyotoProtocol.Thefirstisthe CleanDevelopmentMechanism(CDM),underwhichAnnex 1countriescanearnemissionscreditsforcertaintypesof projectsinitiatedaftertheyear2000indeveloping countries(Annex2).CDMprojectsearncreditscalled CertifiedEmissionsReductions,orCERs.ThesecondisJoint Implementation(JI),whichcoversGHGemissionsreduction I l t ti (JI) hi h GHG i i d ti projectsthatareimplementedjointlybetweentwoormore developedcountries(Annex1).JIprojectsgeneratecredits calledEmissionReductionUnits,orERUs. called Emission Reduction Units or ERUs

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


TheInternationalFinancialReportingInterpretations Committee(IFRIC)ofInternationalaccountingstandard boardinmay2003,issuedadraftinterpretation(D1)on emissionrightsandcalledforalternativecommentsand cameoutwiththefollowingguidelinesandpolicies:i)An t ith th f ll i id li d li i i) A assetforallowancesheld:Emissionallowances,whether allocatedbygovernmentorpurchasedinthemarket,are intangibleassetsandshouldbeaccountedforin intangible assets and should be accounted for in accordancewithIAS38,IntangibleAssets.Allowancesthat areallocatedforlessthanfairvalueshallbemeasured initiallyattheirfairvalue.Allowancesshallnotbe initially at their fair value. Allowances shall not be amortized,butaretobetestedforimpairmentunderIAS 36,ImpairmentofAssets.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT

ii)Agovernmentgrant:Whenallowancesare ) g g allocatedbygovernmentforlessthanfairvalue, thedifferencebetweentheamountpaidandfair valueisagovernmentgrantthatshallbe value is a government grant that shall be accountedforinaccordancewithIAS20, GovernmentGrantsandDisclosureof GovernmentAssistance.Accordingly,thegrantis G tA i t A di l th ti initiallyrecognizedasdeferredincomeinthe balancesheetandsubsequentlyrecognizedas q y g incomeonasystematicbasisoverthecompliance periodforwhichtheallowanceswereallocated.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


iii)Aliabilityfortheobligationtodeliverallowancesequalto emissionsthathavebeenmade:Asemissionsaremade,aliabilityis emissions that ha e been made As emissions are made a liabilit is recognizedfortheobligationtodeliverallowancestocoverthose emissions(ortopayapenalty).Thisliabilityisaprovisionthatfalls underIAS37,Provisions,ContingentLiabilitiesandContingent d IAS 37 P i i C ti t Li biliti d C ti t Assets.Theliabilityshallbemeasureda tthebestestimateoftheexpenditurerequiredtosettlethe presentobligationatthebalancesheetdate.Thiswillnormallybe thepresentmarketpriceofthenumberofallowancesrequiredto coveremissionsmadeuptothebalancesheetdate.However,ifthe participantsbestestimateisthatsomeortheentireobligationwill besettledbyincurringacashpenalty,it(i.e.theparticipant)shall measurethatpartofitsobligationsatthecostofthepenaltyrather p g p y thanatthemarketpriceoftherelevantnumberofallowances.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


ChallengetoInvestmentFinancePractitioners g InvestmentInGreenBondsAndClimateBonds:The greenbondsareissuedinordertoraisethefinancefor environmentalprojectswhileClimatebondsareissued i t l j t hil Cli t b d i d toraisefinanceforinvestmentsinemissionreduction orclimatechangeadaption.Thetwocanbeissuedby g p y government,multinationalcorporationsorBanks. CurrentlythelargestinvestmentpoolfocusedonLand Use,LandUseChangeandForestry(LULUCF)projects Use Land Use Change and Forestry (LULUCF) projects istheWorldBank'sBioCarbon Fund,whichinvestsin biosequestration projectsaroundtheglobe.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


Biosequestration istheprocessofremovingexcesscarbondioxide(CO2) fromtheatmosphere(3.67tonsCO2 1 ton sequestered carbon) through from the atmosphere (3.67 tons CO2 =1tonsequesteredcarbon)through afforestation.TheKyotoProtocol'sCleanDevelopmentMechanism(CDM) recognizescarbonsequestrationthroughforestryasawaytomitigate globalwarmingandalsoallowsindustrializedcountriestooffsettheir carbonemissionsbyinvestinginforestryprojectsindevelopingcountries (UNFCCC,2003) Carbonsequestrationprojects'areofeconomicandenvironmental benefitstoAfrica,theworld'spoorestcontinent.Africancountriesneed increasedinvestmenttosupportpovertyalleviationandinfrastructure development.Withahighdependenceonlandandforestsfor subsistence,thesecountriesalsorequireeffectivestrategiestocombat ff thegrowingthreatofwidespreadnaturalresourcedegradation. Accordingly,effortstomitigateclimatechangethroughcarbon sequestrationprojectscouldbringinmoneybothtoraiselocalincomes sequestration projects could bring in money both to raise local incomes andregeneratenaturalresources(Kituyi,2002).Currently,carbon sequestrationprojectsinAfricaarelocatedinKenya,Ugandaor Tanzania Burkina Faso Madagascar

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


WorldBank'sBioCarbon Fundiscurrentlythebiggestinvestorof carbonsequestrationprojectsinAfricaTheseincludeTanzania b t ti j t i Af i Th i l d T i ,Kenya,Uganda,Mauritania,Senegal,Sudan,Benin,Mozambique, MadagascarandEthiopia. Other prominent carbon investors in Africa are the Global OtherprominentcarboninvestorsinAfricaaretheGlobal EnvironmentFacility(GEF),theUnitedStatesAgencyfor InternationalDevelopment(USAID),theForestAbsorbingCarbon Emissions(FACE)Foundation,andtheEuropeanUnion.The CommunityResearchandDevelopmentCentre(CREDC),UN C it R h dD l t C t (CREDC) UN DevelopmentProgramme (UNDP)/GlobalEnvironmentFacility SmallGrantProgramme (GEFSGP),theGlobalGreengrants Fund ( (GGF)andtheEnvironmentalRightsAction/FriendsoftheEarth ) g / Nigeria Investorsinclude:TokyoElectricPowerCompany,Okinawa Electric,andthenationsofCanada,Italy,LuxemburgandSpain.

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT FOR PROFESSIONALS CONT


ChallengetoProfessionalFarmers,CommunityLeadersandPoliticians. CarbonSinkinitiatives:Projectsinvolvingtheestablishmentofcarbon "sinks,"ornaturalreservoirsforcarbondioxidesuchastrees,soil,andthe ocean,areeligibleforgeneratingcreditsundertheCDMorJI.However, suchactivitiesarelimitedtoafforestationandreforestationonlandthat wasnotforestedin1990,perthetermsofthe"LandUse,LandUse f d h f h " d d ChangeandForestry(LULUCF)"rubricoftheKyotoProtocol. Majordevelopmentalbenefitsforlocalcommunitiesfromtheseprojects p includeanincreasednumberoftimberandnontimberforestproducts fromregeneratedforests,employmentopportunitiesfromforestry activities,andincreasedincomesfromthesaleofcarboncredits. TheBioseqeustration canbringaboutSustainableDevelopment, BiodiversityConservation, EcologicalRestorationsuchas afforestationand Biodiversity Conservation Ecological Restoration such as afforestation and reforestationcanoftengenerateotherlocallyvaluedecosystemservices suchasimprovedwaterqualityandreducedsoilerosionand sedimentation(Scherr etal.,2004)andcanimprove SoilsandLand Productivity

ENVIRONMENTALCHALLENGESOFCLIMATECHANGE FORPROFESSIONALSCONT
Nigeriain2003,underthespecialunitofClimate g , p changeintheFederalMinistryofEnvironment publishedthefirstNationalCommunicationunderthe UNFCCC.ThiscommunicationpresentsNigeriasgross UNFCCC Thi i ti t Ni i nationalemissionsbysourceandbysinks. The summary of national emissions of greenhouse Thesummaryofnationalemissionsofgreenhouse gasesshowthatCO2has192Tg CO2,Carbon Monoxide(CO)17TgCO,Methane5.9Tg CH4,Non MethaneVolatileOrganicCompounds(NMVOC)2.2Tg Methane Volatile Organic Compounds(NMVOC) 2 2 Tg NMVOC,Othersinclude660Gg ofNO2,12Gg ofN2O MAJORSOURCESOFCARBONDIOXIDEEMISSIONS MAJOR SOURCES OF CARBON DIOXIDE EMISSIONS

MAJORSOURCESOFCARBONDIOXIDE EMISSIONS
LANDUSEANDLANDUSECHANGEANDFORESTRY (LULUCF) 1% 6% 3% GASFLARING

20%

40% TRANSPORT

OTHERENERGY

30% ELECTRICITY

INDUSTRIALPROCESSES

MAJORSOURCESOFMETHANEEMISSIONS

4% 18%

2% 32% WASTEWATERTREATMENT(WWT) ENERGY LIVESTOCK

19%

RICECULTIVATION MUNICIPALSOLIDWASTE(MSW) 25% OTHERAGRIC

MAJORSOURCESOFCARBON MONOXIDE
1% 21% 28%

TRANSPORT GASPLARING SMALLCOMBUSTION 25% 25% AGRICULTURE WASTE

THEPARADOXOFCLIMATECHANGE THE PARADOX OF CLIMATE CHANGE


APARADOXisaseeminglytruestatementorgroupofstatements thatleadtoacontradictionorasituationwhichseemsto d f l i th t l d t t di ti it ti hi h t defylogic orintuition. Therehasbeenavarietyofdisputes,significantlymorepronounced inthepopularmediathaninthescientificliterature,regardingthe in the popular media than in the scientific literature regarding the nature,causes,andconsequencesofglobalwarming.Thedisputed issuesinvolvethecausesofincreasedglobalaverageair temperature,especiallysincethemid20thcentury,whethersucha warmingtrendisunprecedentedorwithinnormalclimatic i t di d t d ithi l li ti variations,whetherhumankindhascontributedsignificantlyto it,andwhethertheincreaseiswhollyorpartiallyanartifactofpoor measurements.Additionaldisputesconcernestimatesofclimate p sensitivity,predictionsofadditionalwarming,andwhatthe consequencesofglobalwarmingwillbe.

THEPARADOXOFCLIMATECHANGE
i)AccordingtoUNCTADconferenceonMaritimetransportandclimatechange,although predictionsbasedoncurrenttrendsalreadysuggestedanenormouschallenge,itmustbe di i b d d l d d h ll i b stressedthattherewasaninherentdegreeofuncertaintyassociatedwiththosepredictions. Naturalsystemswerecomplexandnonlinear,andtherewasaveryrealriskthatgrowing GHGconcentrationscouldtriggervariousfeedbackmechanismsthatwoulddriveclimatic changesandtheirconsequencestolevelsthatwereextremelydifficulttomanage. ii)TheKyotoProtocol'sfirstcommitmentperiodrunsfrom2008through2012,andwhether the the signatorieswillmeetthe5%globalreductiontargetremainsuncertain. iii)AccordingtoAnthonyGiddens,asociologistthecentralparadoxofclimatechangepolitics isthatelectoratescan'tgraspthesignificanceofclimatechangebecauseitistoo abstract,andnotdramaticenough. iv)Evenmorecontradicting,istheEuropeanUnion sownclimatechangepolicies,toutedas iv) Even more contradicting, is the European Union's own climate change policies, touted as themostprogressiveintheworld,aretoblame.TheEUwideemissionstradingsystem determinesthetotalamountofCO2thatcanbeemittedbypowercompaniesandindustries. Andthisamountdoesn'tchange nomatterhowmanywindturbinesareerected.

RECOMMENDATIONS RECOMMENDATIONS
Designingproductsthatareenergyefficientandemitting lessgreenhousegasesi.e buyingfuelefficientcarsand applianceswhileavoidingtokobo carsandappliances, Investinginalternativeenergysourcessuchassolarenergy andwindenergy, Constructinghomesthatcanwithstandfloodingrisk. Afforestation and Reforestation to act as biosequestration AfforestationandReforestationtoactasbiosequestration strategy. Introductionofemissiontaxes Eliminating the consumption of meat and going vegan i e Eliminatingtheconsumptionofmeatandgoingvegani.e vegetarianismtoavoidmethaneproducinglivestock.

RECOMMENDATIONScont RECOMMENDATIONS cont


Encouragingcarbonneutrality,cappingourglobalcarbonemissionand emissionstradingschemesasitisbeingdoneinEuropeanUnion emissions trading schemes as it is being done in European Union countries.Thisisachievedbyissuingtradablecarbonpermitsthatmajor pollutersmustbuyforeachtonofcarbontheysendintotheatmosphere. Inthisscenarioofcarbonemissiontrading,companiesarelimitedto certainlevelofcarbonemissionbasedonpasthighlevelofemission,i.e certain level of carbon emission based on past high level of emission i e theiremissionlevelsaregrandfathered.Acompanythatemitssmaller amountsofgreenhousegasesthanitdidinthepastmaysellitspermitted emissionscreditstoonethatgeneratedmorethanitdidinthepast.The ideaistoencouragemorecompaniestoproducefeweremissionswhile idea is to encourage more companies to produce fewer emissions while stillgrowing. IntroductionofGreenbondsandclimatebonds y, g, g g, Finally,awarenessraising,knowledgesharing,educationandinformation dissemination isneeded.Weshouldconsiderthepossibilityofincludinga compulsorysubjectonclimatechangeorEnvironmentalaccountinginthe undergraduatecurriculumandICANsyllabus.

THANKYOU THANK YOU

SPEECH BY THE PRESIDENT/CHIEF EXECUTIVE, DANGOTE GROUP, ALHAJI ALIKO DANGOTE, CON, AT THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA (ICAN) 41st ANNUAL ACCOUNTANTS CONFERENCE, AT THE INTERNATIONAL CONFERENCE CENTRE (ICC), ABUJA, ON 18th OCTOBER, 2011

The President, Institute of Chartered Accountants of Nigeria (ICAN), Members of the Council, Distinguished Chartered Accountants and Invited Guests, Gentlemen of the Press, Distinguished Ladies and Gentlemen, I feel highly honoured and privileged to stand before this gathering of distinguished chartered accountants and other key stakeholders in the Nigerian economy, to speak on the topic: The Changing Roles of Chartered Accountants in Value Creation and Business Sustainability. The topic is very relevant and timely, particularly now that the Federal Government is spearheading an all-embracing economic reform agenda for the country as part of its vision of making Nigeria an economic super power by the year 2020. You will agree with me distinguished ladies and gentlemen that businesses can only be sustained by doing the extra-ordinary through value creation by various
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professionals like you distinguished chartered accountants and professional bodies, like your respected institute through this kind of commendable initiative of organizing Annual Chartered Accountants conference, where topical issues are carefully chosen as themes and thoroughly discussed. I am aware other professional bodies have copied this laudable initiative of ICAN. My only wish and prayer is that your communiqu at the end of this conference will go to the relevant sectors for implementation. I hope the Institute has an effective feedback and monitoring mechanism in this regard.

Value Creation in Business


The primary objective of any business is the maximization of shareholders value. This can only be achieved through value creation in the business. The way value is created in a service industry or finance industry is quite different from the way value is created in a manufacturing industry or public sector, but the objective remains the same. In the manufacturing industry, increase in production volume and capacity utilization, product quality, sales volume and value, research and development, new products and markets, reduction of wastages, efficient logistics and distribution infrastructure, financing costs, availability of highly skilled manpower especially in the areas of engineering and frequent changes in government Fiscal and Monetary policies amongst others are key parameters that impact
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greatly in value creation. A service business will rely on knowledge and skill of its workers. In the service industry, value is created mainly through effective and efficient service delivery. Examples of which are too numerous to mention. When Profits Do Not Create Value Sometimes, making profits and creating value do not coincide. For instance, when you are trading, you are not really adding as much value to the economy as in manufacturing. In fact you are adding value to your trading partners economy. In Dangote Group, one of our major business objectives is to make Nigerian economy grow by creating value addition businesses in the manufacturing sector. Dangote Cement Plc, apart from being the leading Nigerian cement company with Pan-African expansion plans, control over 50% of the market share and is currently the company with the highest market capitalization on the Nigerian Stock Exchange. Our other manufacturing business interests are in Sugar and Salt Refining, Flour Milling, Pasta and bags production. Four of our subsidiaries are quoted on the Nigerian Stock Exchange. Today, our Group is the largest employer of labour in the country outside the Federal Government. Currently, we have over 15,000 direct employees, with many Chartered Accountants in Strategic and Policy decision making positions. About 150 of our employees are Chartered Accountants (ICAN Members), who are helping to drive our vision.
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We are immensely proud of them. We sponsor our staff to several MCPE Training Programmes as well as Annual Conference to update their technical knowledge and skills. Ladies and gentlemen, I am sure that you will agree with me that in manufacturing, apart from creating jobs locally, you also add value by harnessing your natural resources and solid minerals, while saving foreign exchange for the country. It often gets to a point where it is not only about making money anymore, but also about giving back to people and the environment. This brings me to the concept of Corporate Social Responsibility (CSR). At Dangote Group, we have a very robust CSR strategy in place as part of our giving back to the society. Dangote Foundation set up in 1993, is the vehicle through which we drive our various CSR initiatives in areas such as health, education, youth empowerment, infrastructural support services such as transformers, provision of water and disaster relief. Dangote Foundation has impacted on lives both within and outside the country. We have recently donated several millions of Naira to the various flood victims all over the country, and also internationally to the various neighbouring African countries and Pakistan.

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Similarly, we are providing vocational and technical training through Dangote Academy to our youth, who will be employed in our various companies and other companies as well at the end of their 1-year training programme. We have recently approved a take-off grant of N1billion for the academy. Distinguished Ladies and Gentlemen, despite the lack of adequate infrastructure and challenging environment, we are expanding our various production capacities and devising several ways of not only remaining in business, but being market leaders in any business of our choice. This strategy of ours best described the topic of my presentation, Value Creation and Business Sustainability.

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The Changing Roles of Chartered Accountants in the Value Creation and Business Sustainability
Chartered Accountants add value in various ways, some of which are enumerated below; Vision and Mission definition Feasibility Studies and Financial Projections Audit and Assurance Tax Planning and Management Company Secretariat and Shareholders Relationship Management Receivership and Liquidation Financial Reporting and Compliance (IFRS) Enterprise Risk Management Enterprise Resource Planning (ERP) Corporate Governance CSR/HSE (Social Accounting Issues)

The Chartered Accountants new roles apart from being Chief Finance Officers (CFO), include Chief Business Officer (CBO), Chief Operating Officer (COO), and Chief Strategic Development Officer (CSDO).

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The quality of Chartered Accountants and the high standards of the profession need to be jealously guarded. The growing demand for Chartered Accountants should set the members of the profession thinking of their new roles as business partners in the dynamic operating global economy. It is being increasingly recognised that Chartered Accountants should no longer confine themselves merely to accounting for past events, but should also broaden their horizons in terms of learning new concepts. Only then will they be able to contribute effectively to the process of economic growth. The recent adoption of the International Financial Reporting Standards (IFRS) for all Financial Statements of Publicly Quoted Companies in Nigeria is a case in point. Chartered Accountants now have to equip themselves with new skills and convert their previous data to conform to new guidelines which are best global practice. The world is now a global village and thin walls divide continents if at all. The Institute of Chartered Accountants of Nigeria (ICAN) should champion this transition to IFRS to ensure uniformity of process and practices in Nigeria. At Dangote Group, we have put in place a process that would facilitate our conversion to IFRS and Dangote Cement Plcs financial statements for the year ended December 31, 2011 will be IFRS compliant in addition to the SAS.
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The key position of Chartered Accountants in the industrial and commercial world, the high standards of professional conduct and ethics have created a situation wherein people are looking up to Chartered Accountants for leadership. Members of the profession should not be found wanting in this new responsibility. It is imperative that they take up this challenge of leadership with humility, dignity and knowledge. I am happy to note that ICAN MCPEs and other relevant trainings organized by ICAN are tailored in adequately keeping your members up to date with the dynamic changing global environment. Conclusion So where do Chartered Accountants go from here? The answer, I believe, is already obvious! Reinvention on a grand scale is the order of the day. Failure to move with the changing dynamics of the business world will put the profession at risk. Chartered Accountants must rise up to the challenges of the times by being more proactive in the decision-making process of their organization. Thank you for your time.

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Performance Measurement in the Public Sector The Accountability Challenge The Presented to The Institute of Chartered Accountants of Nigeria (ICAN) 41st Annual Accountants Accountants Conference On 19 October, 2011 By Sam. S. O. Afemikhe
1

Performance Measurement in the Public Sector The Accountability Challenge

P f t d the Accountability t bilit Performance M Measurement and th A Challenge are embedded in Aristotles statement that public funds should be spent publicly p p y The transparency and value for money challenge regarding Public Expenditure Management.

Performance Measurement in the Public Sector The Accountability Challenge

The annual government budget is a plan of what monies the government expects to receive in Revenues against how much it expects to Expend during a financial year. Managing of P bli E M i f Public Expenditure i concerned with dit is d ith Planning deciding on total expenditure total and ensuring that they are in line with macroeconomic and budgeting requirements determination of priorities and allocation of expenditure to reflect priorities. deployment of funds to achieve these priorities. Control Ensuring that funds are spent for purpose specified and that appropriations are not exceeded without appropriate approvals. Ensuring that the public expenditure provides value for money expended (economy, efficiency and effectiveness) i h l hi d T ki effective action when plans are not achieved Taking ff i
3

FIGURE 1 BUDGET PREPARATION AND IMPLEMENTATION


DETERMINATION OF PUBLIC NEEDS THROUGH THE POLITICAL PROCESS

DETERMINATION OF GOODS, WORKS AND SERVICES NEEDS TO SATISFY PUBLIC NEEDS

BUDGET PREPARATION

ALLOCATION OF RESOURCES TO MAJOR FUNCTIONS AND TO ECONOMIC CATEGORIES WITHIN FUNCTIONS

LEGISLATIVE APPROVAL OF THE BUDGET

BUDGET APPROVAL BUDGET IMPLEMENTATION


4

ORGANISATION OF THE DELIVERY OF GOODS, WORKS AND SERVICES

FIGURE 2 PHASE IN THE BUDGET IMPLEMENTATION PROCESS


BUDGET APPROPRIATION

APPORTIONMENT

COMMITMENT/ORDER OF GOODS, WORKS AND SERVICES

ADMINISTRATIVE PHASES

RECEPTION/VERIFICATION

PREPARATION AND ISSUE OF PAYMENT ORDERS

PAYMENT

FINANCIAL PHASE
5

Performance Measurement in the Public Sector The Accountability Challenge

A good budget promotes efficient delivery of public goods and services across sectors (e.g. health, education, transportation, etc.), and does so in a fiscally prudent and sustainable manner, i.e. working within a budget constraint. In terms of accountability, traditional budgetary systems focus on ensuring that public expenditure is spent for the purpose specified. Expenditure is approved by NASS and monitored to ensure that the expenditure is in accordance with legal and regulatory requirements.

Traditional Budget prevents fraud in public expenditure and achieves narrow financial control BUT suffers the limitation that it

Focuses on inputs (money and expenditure on inputs such as


salaries, overheads etc). This is an obstacle to transparency as it is not obvious as to the service being provided. D id information on the cost of achieving policy i h f hi i li Does not provide i f Does not provide basis for objective cost/benefit analysis.
6

Performance Measurement in the Public Sector The Accountability Challenge

In order to lay the foundation for performance y p measurement and thus accountability, Public expenditure should be informed by

Comparison of costs against the expected benefit of


expenditure Focus on value b i provided b expenditure F l being id d by dit Traditional budgets focus on costs but cost are not measured comprehensively. Focus being on cost in cash terms. Non cash costs depreciation, non funded liabilities under social costs such as environmental costs etc. etc are excluded Focus is on flows not stock of assets and liabilities Emphasis on single year has implication for current d i i t d benefits d not receive fit do t i decisions as f t future costs and b sufficient attention (MTFF/MTEP is changing this!).
7

Performance Measurement in the Public Sector The Accountability Challenge

Budget Implementation (Public Procurement) A good P bli P d Public Procurement S t t System should: h ld - Deliver Value - Have fairness in perception and reality - H Have t transparency ( ll d fi d regulation, procedures and (well defined, l ti d d open to public scrutiny) - Apply clear standard tender documents with complete information - Give equal opportunity to all - Uphold Accountability and ethical standard (holding practitioners responsible for obeying and enforcing the rules) Technical qualification following advertised ITT Award to the Lowest cost Responsive bidder Certification a BPP confirmation that: - Process is right - Winner is right g - Cost is right Performance Measurement/Post Review
8

Performance Measurement in the Public Sector The Accountability Challenge

Budget Performance is in two fold That what is budgeted is spent Issues are - Capacity - Implementation - F di Funding That what is spent delivers the desired outcome (Sunday Guardian Headline of October 8, 2011: Federal Government: Many Contracts, Little Result) y , ) - Projects are not abandoned - Projects are delivered with economy and efficiency ffi i - Are effective/attain their set objectives.

Performance Measurement in the Public Sector The Accountability Challenge

Objective of performance measurement in public expenditure Is to bring greater results orientation and accountability to PEM by results-orientation focusing on what government achieves with the money it spends. Move beyond preparation of budgets and financial monitoring of expenditures to evaluating whether government programmes work and whether budgets actually deliver services. Focus on the outputs, the reach, the outcomes and the impact of public expenditure and programmes p p g This Involves: Definition of specific policy goals or objectives outcomes Definition of programme/project level performance targets outputs Linking budget allocations to these goals (ensuring a logical sequence from outputs to outcomes in projects and programmes funded). M Measuring and evaluating results of programmes and projects i d l ti lt f d j t Basing new budget allocations on results Establishing new accountability relationships and changing the incentives of budget managers by making them responsible for showing whether outputs were met.
10

Performance Measurement in the Public Sector The Accountability Challenge

Objective of performance measurement in public expenditure. That political leaders: Have information to enforce achievement of output targets

Have incentive to actually enforce achievement of output targets Are called to account for both the amount of money they spend and their results results.

Performance issues which are relevant at every stage of the budget cycle for individual projects should receive the needed focus: Before hand - Is this the best project to fund? - Will the project perform well? p j p During - Is the implementation of the project going well according to p plan? After - Has the project delivered the outputs and outcomes expected?
11

Performance Measurement in the Public Sector The Accountability Challenge

Performance Measurement and Accountability The Missing Link Performance Indicators Inputs/Outputs Examples Output Efficiency/Productivity Examples: - Numbers of man-days expended per repair made (Efficiency) - Number of students transported divided by the cost of transportation - (Productivity) Outcomes (Efficiency, Productivity) Examples - Repair cost per kilometer of roads that were repaired to satisfactory conditions (Efficiency) - Number of patient seen per doctor per day (Productivity) - Average Number of invoice processed by accounts staff
12

Performance Measurement in the Public Sector The Accountability Challenge

Performance Measurement and Accountability The Missing Link It is very easy to be entirely focused on inputs in the public sector and ignore results (outcomes) Measurement of results is the link to outcomes analysis and input/output evaluation.

Measurement is a call to action If you do not measure results, you cannot tell success from
failure

If you cannot see success you cannot reward it If you cannot reward success, you are probability rewarding
failure

If you cannot see success, you cannot learn from it success If you cannot demonstrate result, you cannot win public support.
13

Performance Measurement in the Public Sector The Accountability Challenge


A Lesson from the USA In the United States of America (USA) for instance, Public Sector Performance Measurement is guided by the Government Performance and Results Act 1993. (GPRA). GPRA itself is an offshort of Planning, Programming and Budgeting System in USA Department of Defence that is result oriented budgeting Section 2(b) of this act requires spending and targets which clearly: agencies to develop performance plans

Establish performance goals to define the level of performance to be achieved by a project/programme activity; Express such goals in an objective, quantifiable and measurable form unless authorised to be in an alternative form; Briefly describe the operational process, skills and technology and the human, capital, information or other resource required to meet the performance goals; l Establish performance indicators to be used in measuring or assessing the relevant output, service levels and outcomes of each programme activity; Provide a basis for comparing actual programme results with the established performance goals; and Describe the means to be used to verify and validate these values.
14

Performance Measurement in the Public Sector The Accountability Challenge

Performance Measurement Tools - BPP carries out: Prior reviews Post reviews. - Auditor General Audits and Report to NASS (PAC). - P f Performance M Measurement t - Benchmarking - Value Analysis - Value for Money Reviews Performance Measurement - Performance Measurement is an important tool for evaluating value for money in the public sector. - A survey of public sector managers in some local authority and health sector department in the UK (Jackson 1984) regarded the best features of performance measures to be: the ability to make comparisons of actual performance against targets targets, previous periods, or similar departments or programme the ability to highlight areas of interest and the relevant questions to ask the ability to provide a broad range/comprehensive picture of a service the identification of trends over time the development of local benchmarks, norms or targets. 15

Performance Measurement in the Public Sector The Accountability Challenge

Value Analysis A look back opportunity Th review of the effectiveness of the management of capital projects i f th ff ti f th t f it l j t The from approval through installation together with any methodologies applied in the process. Carried t i C i d out in order to test value for money control at all levels i l di d t t t l f t l t ll l l including Governance project execution. Value analysis reviews a projects effectiveness in the following ways;

The reconfirmation of the objectives that underlined the project in its conception stage and in ensuring that on completion of the project, the objectives are still relevant. The confirmation that the activities and output of the project are consistent with its mandate and are relatively linked to the attainment of the objectives. Assessing the impact and effects both intended and unintended resulting from the execution of the project and in considering whether. the unintended effect outweighs the benefits of the projects; and the project in any way or manner complement, duplicate, overlap or work at cross purpose with other projects and to what extent.

16

Performance Measurement in the Public Sector The Accountability Challenge

Value Analysis A look back opportunity (contd.)

Revenue or cost savings reported since the completion of the project with particular reference to: the necessary performance indicators relating to the project outcomes; confirmation that the project has achieved what was expected; and assessment of reasons for failure to meet objectives

Value analysis would evaluate whether there are better cost effective alternative projects which could have achieved the objectives better or delivering the existing objectives.

The USA GPRA requires that 2% of project cost be set aside for value analysis The challenge here : Do we learn lessons Yes, we must! : Do we pursue process improvement? This is imperative otherwise we will never step up!!
17

Performance Measurement in the Public Sector The Accountability Challenge

Mind the Gap! p Why benchmark To establish the gap/Performance deficit Reasons to benchmark activities: To establish the difference To set the highest possible standard To learn from Best in Class (BIC) ( ) Creating synergy of ideas Reduction in prevention costs Appraisal opportunities Reduction in failure costs
18

Performance Measurement in the Public Sector The Accountability Challenge

Chart 1 Performance Gap

Gap Gap
Performance

Actual Performance

Target Performance

Best Practice

19

Performance Measurement in the Public Sector The Accountability Challenge

Benchmarking can deliver major benefits

Achieving economy in the form of lower prices and higher productivity Achieving efficiency by comparing the costs of providing services and the contribution these services make to the organisation with what is achieved in other organisations Achieving effectiveness in terms of actual business objectives realized compared with what was planned p p Help to expose corruption and foster accountability and transparency.

Starting down the road to successful benchmarking means asking the following fundamental questions: What is wrong with what we do? How can we do it better? Will it give us a competitive edge or improved service delivery Will our work force be able to change? How much will it cost?

Benchmarking is therefore not only an Accountability tool but also a process improvement tool.
20

Performance Measurement in the Public Sector The Accountability Challenge

Key p y process improvement Benchmarking Questions p gQ

Where do we want to be? How do we get from here to there? What can be done to close the gap? g How can the positions be reversed to narrow rather than widen the gap? How far will you go to adopt and adapt new practices? What is involved, how much will it cost and how long will it take? What are the broader implications particularly for change management?
21

Performance Measurement in the Public Sector The Accountability Challenge

Value for Money Reviews. VFM is the Validation of Project/Service for Economy, Efficiency & Effectiveness Economy Validating Quantity, Quality and Price - Contracting Strategy Validating input output - Project execution risk management schedule execution, etc. Effectiveness Validating the project or service ultimately delivered. - Look back review value analysis and benchmarking
22

Efficiency

Performance Measurement in the Public Sector The Accountability Challenge

Figure 3 Auditing the 3Es


ACTUAL INPUTS [Efficiency] (the ratio of actual input to actual outputs) ACTUAL OUTPUTS

[Economy] (the ratio between planned inputs and actual inputs in terms of unit)

[Effectiveness] (the ratio of actual outputs to planned outputs)

PLANNED INPUTS

PLANNED OUTPUTS (Objectives, goals etc.)

23

Performance Measurement in the Public Sector The Accountability Challenge

Overarching challenge is Cultural Managing the necessary change. Record keeping - A Accuracy of d t and related d i ti f data d l t d derivatives - Timeliness of Reports Mandatory:

At CAPITAL (CAPEX) sanction and RECURRENT (OPEX) approval: All Business, Technical, cost and Schedule data is submitted in a form that ll th t allows P f Performance M Measurement and B t d Benchmarking M t i t h ki Metrics to be calculated (This would represent planned metrics) At completion: Actuals (at the same level of detail as the estimates) Business, Business Technical cost and Schedule data is submitted in a form that allows Performance Measurement and Benchmarking Metrics to be calculated (This would represent actual metrics) At completion: Comparison of the metrics (Business, Technical Cost and Schedule) both within the region and with other similar facilities world wide to establish potential and target benchmarks.
24

Performance Measurement in the Public Sector The Accountability Challenge

Public Private Partnership (PPP) require transparency B t way t secure iimprovements iin public services given t bli i i Best to scarce government resources Bringing private sector management and financial skills to create b tt VFM i th public sector in the bli t better t Public Finance Initiative (PFI), PPP to design, build, finance and operate public facility or service with cost recovered from future earnings Risk in project (financial, technical, legal, political, commercial etc.) usually shared to party best equipped to manage them unlike the traditional procurement Competition should be injected into PPP tenders using a tow staged tender method Cost transparency is essential for public confidence and minimisation of public back charge Projects need to be benchmarked in all respect for cost/benefit j p to the people to be maximised Should be better integrated into our annual/MTEP programme
25

Performance Measurement in the Public Sector The Accountability Challenge

Key Accountability Questions 1) How can the bureaucracy in budget implementation be made more efficient to allow for smoother budget for performance. 2) Can government embrace performance measurement in its activities 3) Can government pursue Value for Money (Economy, Efficiency and Effectiveness) in its activities 4) The challenge is corruption and inefficiency This can be squarely confronted with Value Analysis; and Benchmarking. Benchmarking 5) The key question is Do we learn from our mistakes? 6) Are we ready to put politics and self interest aside and pursue process improvement so that we can close rather than widen the gap? 7) Can we hold the public sector accountable by service charters that define output and outcomes in every budget line item?

We will be deemed ready when we answer YES to each and everyone of these questions. 26

Performance Measurement in the Public Sector The Accountability Challenge

CONCLUSION It is important that the Nigerian public sector should emphasise performance and value for money not only to enhance productivity, economic growth and thus raise the general standard of living of the citizenry but above all to ensure accountability.

This objective can be delivered by the application of Performance management.


27

Measurement

in

our

Public

expenditure

28

INFRASTRUCTURETRANSFORMATIONANDSOUNDFINANCIAL MANAGEMENTFOR NIGERIASOCIOECONOMICDEVELOPMENT. Apaperpresentedatthe41stAnnualAccountantsConference A t d t th 41 t A lA t t C f by TheCoordinatingMinisterfortheEconomy&theHonourable MinisterofFinance Minister of Finance (CME&HMF) DR(MRS)NGOZIOKONJOIWEALA

GLOBAL CONTEXT

UNCERTAINTIES IN THE WORLD ECONOMY:

POOR FISCAL SUSTAINABILITY / DEBT OUTLOOK

DEBT CRISIS IN EUROPE DEBT CEILING / BUGDET CRISIS IN THE USA

SLOW GROWTH IN JAPAN POLITICAL TURMOIL IN THE MIDDLE EAST & NORTH AFRICA INTERMITTENT FOOD PRICE CRISIS IMPACT OF CLIMATE CHANGE IN SUMMARY, WE FACE A MORE UNCERTAIN GLOBAL ECONOMY:

185 CRISES IN THE 1980s COMPARED TO 360 OVER THE LAST DECADE

HOWEVER, GLOBAL UNCERTAINTY IS MITIGATED BY STRONG ECONOMIC PERFORMANCE IN CHINA AND INDIA, WITH GROWTH FORECASTED AT 7+% PER ANNUM.

PROJECTED WORLD REAL GDP GROWTH: 3.2% in 2011, 3.6% in 2012, and 3.6% in 2013.

WhilethesovereigndebtcriseshavebeenmostpronouncedinonlyafewEurozone countriestheyhavebecomeaperceivedproblemfortheareaasawhole.DebtGDP ratioaroundtheregionisdeterioratingwithGreeceandItalyratiosalmostclimbingto 120%.Wherethenisthesafehaven? 120% Where then is the safe haven?

DIRECT POSSIBLE IMPLICATIONS FOR NIGERIA


OIL ACCOUNTS FOR 70% OF TOTAL BUDGET REVENUE. MORE VOLATILITY IN ECONOMIC GROWTH Pro-cyclical Public Expenditure Profile: Oil Revenue and Expenditure (1971-2010)

300 xpenditure % Change in Revenue/Ex 250 200 150 100 50 0 -50 -100 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

% Change in Oil Revenue

% Change in Total Expenditure

MACROECONOMIC REFORMS AND STABILITY


KEY CHALLENGES AND PRIORITIES:
(A) FISCAL OPTIMIZATION

FISCAL DEFICIT HAS BEEN RISING, AT 3.51% IN 2010. TARGET 3% STARTING 2012; DEVELOP FOUR-YEAR MTEF

RECURRENT EXPENDITURE UNACCEPTABLY HIGH AT 73.4% OF TOTAL EXPENDITURE RELATIVE TO COMPARABLE COUNTRIES TARGET BELOW 70% BY 2015

CAPITAL EXPENDITURES STAGNANT, 25% TOTAL EXENDITURES TARGET UP (1 5% PER YEAR) 5% BY 2015 (1.5%

DOMESTIC DEBT HIGH AND RISING US $31 BILLION OR 16.4% GDP. TARGET HELD STEADY AT 16.4% OF GDP

MACROECONOMIC REFORMS AND STABILITY


( ) OTHER TARGETS & SOLUTIONS (C)
GDP GROWTH NON-OIL GDP

7-8% PER ANNUM 8-10% PER ANNUM INCREASE BY 5% INSTRUMENT TO REGULATE

GROWTH
FDI SOVEREIGN

WEALTH FUND
SOVEREIGN

PRO-CYCLICALITY. PRO CYCLICALITY SUPPORT INVESTMENT AND BUDGET


RESTORE TO PREVIOUS

CREDIT RATING

RATING. INVESTMENT GRADE (BBB) BY 2015

I f t t Infrastructure transformation: A key p component of vision 20:2020


Mr. President is committed to investing in priority sectors in the areas of Security, Infrastructure, Agriculture, Manufacturing, Hou sing, Entertainment services, education and health. Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure. Still infrastructure Still, the sector accounts for about 33% of GDP and two-thirds of employment.

So much has been done on infrastructure

CAPITALBUDGETEXPENDITUREONINFRASTRUCTURE 2006 2007 N'Billion N'Billi N'Billion N'Billi Power Transportation works(Roads) works (Roads) Railways 73.587 72.783 72 783 0.885 51.664 149.127 149 127 8.828

2008 N'Billion N'Billi 27.878 77.36 77 36 6.943

2009 N'Billion N'Billi 96.898 115.487 115 487 15.642

Total

250.027 414.757 32.298

Aviation 0.359 7.341 10.484 10.313 28.497 Total147.614216.96122.665238.34725.579 InadditionthesumofUS$5.375billionwasapprovedandsourcedfromExcessCrudeSavingsAccountas interventionfundforpowersectorbyFederal,StatesandLocalGovernmentsinthesumofUS$2.463billion, US$1.948billionandUS$.963billionrespectively. $ $ Source:FederalGovernmentFinancialStatements

Whatisthe What is the directionon di ti Infrastructure?

Investing in infrastructure Power Sector


INFRASTRUCTURE
POWER

LONG-TERM STRATEGY :

GOVERNMENT INVESTMENT IN LARGE COAL PLANTS AND HYDRO (DUE IN 7 YEARS)

COAL HYDRO SUPERGRID

3,500 MEGAWATTS 3,500 MEGAWATTS


DUE IN 4 YEARS TO COST US$ 4 BILLION.

INTERIM STRATEGY (CONTINGENT UPON IMPLEMENTATION OF COST REFLECTIVE TARIFF


REGIME)

NIPP

4,775 MEGAWATTS WITHIN 3 YEARS 6,000 MEGAWATTS 5,000 MEGAWATTS RECOVERED CAPACITY.

PURCHASE FROM BULK TRADERS PRIVATIZED POWER PLANTS

.investing i i f t t i ti in infrastructure requires sound fi i d financial i l management well planned and strategically mapped out.but funding is crucial!!!! out but

FundingPowerProject Funding Power Project


Comments 1 2 3 4 5 6 7 8 9
10 11

Bankable? Bankable Bankable Bankable Bankable Bankable Bankable Bankable Bankable NotBankable NotBankable Bankable

Mambilla(2,600MW) Zungeru(700MW) Gurara(350MW) Kaduna(900MW)Powerplant Abuja(1350MW) RehabilitationofKainjiDam RehabilitationofJebba Rehabilitation of Jebba RehabilitationofShiroro Rehabilitation&Extensionof TransmissionLines SuperGridProject SmallHydroPowerPlants

Estimated Cost(b) Cost (b) $2.60 $2.20 $0.350 $1.10 $1.52 NA NA NA $2.10 $6.67 NA

FundingSource EnhancedBudgeting+Exportcredit (China/Brazil) EnhancedBudgeting+Exportcredit (China) EnhancedBudgeting+Exportcredit IPP** IPP** PPP Grant+PPP(N4bngrantfrom Grant + PPP (N4bn grant from Japanforrehabilitation) PPP EnhancedBudgeting+Concessional Loan EnhancedBudgeting+Concessional Loan EnhancedBudgeting+Concessional Loan

Source: NPC

Investingininfrastructure roads,rail,Ports & aviation i ti

Concreteplansareinplacetoconcludeon going Concrete plans are in place to conclude ongoing projectsontheseinfrastructures.Thefollowing investmentstargetshavebeensettoachieve investments targets have been set to achieve thevision20:2020ontheseProjects:
Roads:Coastal roads,bridgesandother keyhighways k hi h $3.5billonrequired Railway:Rehabilitationof existinglinesandbuild newlines $13billionrequired Ports:Developa deepseePortand improveservicesin improve services in existingPorts $5billionrequired

Funding of Roads and Bridge Projects


Comments Bankable? Estimated Cost (b)
$619m

Funding Source

Shagamu-Benin-Asaba Expressway Abuja-Kaduna-Kano

Existing/Ongoing rehab. & upgrade Upgrade & Concession New New Ongoing New

PPP

$300m

PPP

2nd Niger Bridge Loko-Oweto Abuja-Lokoja Niger Delta Coastal Road

$253m (N80b) $54b (360) N59b ($391m) N1,800b ($12b)

PPP Enhanced Budgeting + O&M + PPP Enhanced Budgeting + O&M + PPP Enhanced Budgeting + Various Development Banks Enhanced Budgeting + O&M + PPP Enhanced Budgeting

Ibadan-Ilorin-Jebba Kano-Maiduguri

Ongoing New

N18b N140b ($933m)

Lagos-Ibadan Apapa-Oshodi Ajaokuta Access Roads j

On concession Ongoing Ongoing g g

N89b ($593m) N5.6b (37m) N2.5b ($17m) ($ )

PPP Enhanced Budgeting Enhanced Budgeting g g

Funding of Sea Ports and Inland River Ports


Project Title Bankable/Unbankable Estimated Cost Funding Source

1 2

Lekki Deep Sea Port Akwa Ibom Deep Sea Port Onitsha Inland River Port Baro Inland River Port

Bankable Bankable

NA NA

PPP PPP

Bankable

N4.2b

Enhanced Budgeting + O&M

Bankable

N3.6b

Enhanced Budgeting + O&M

5 6

Oguta River Port Degema River Port

Bankable Bankable

N2.7b N1.7b

Enhanced Budgeting + O&M Enhanced Budgeting + O&M

Funding of Aviation Projects


Project Title 1 2 MMIA International Airport Terminal Remodelling Abuja International Airport Terminal Remodelling (Airside (Ai id contract work t t k awarded Kano International Airport Terminal Remodelling Enugu International Airport (Terminal R (T i l Remodelling) d lli ) Port Harcourt International Airport (Terminal Remodelling) Bayelsa Airport Maiduguri, Benin, Calabar, M id i B i C l b Akure, and taxiway at Kano and MMIA Calabar International Airport (Terminal Remodelling) Bankable/Unbankable Bankable Bankable Estimated Cost C t N21b N20.8b Funding Source Enhanced Budgeting for Airside and PPP for Terminals Enhanced Budgeting for Airside and PPP for Terminals

3 4 5

Bankable Bankable Bankable

N13.5b N10.5b N17.3b

Enhanced Budgeting for Airside and PPP for Terminals Enhanced Budgeting for Airside and PPP for Terminals f T i l Enhanced Budgeting for Airside and PPP for Terminals Regular Budgeting Regular B d ti R l Budgeting

6 7

Un-bankable Un-bankable U b k bl

N1.96b N0.9b N0 9b

Un-bankable

N14.2b

Enhanced Budgeting for Airside and PPP for Terminals

FundingofHousingProjects
ProjectTitle Bankable/Unbankable Estimated Cost FundingSources 1 600,000HousingUnits underPPParrangement Bankable 104.74 PPP

240,000affordablehousing unitsbyFHA

Unbankable

72.35

FMBNtobefullycapitalisedtoatleast 100billion

RecapitalisationofFMBN Recapitalisation of FMBN

Unbankable Un bankable

17.23 17 23

Soundfinancialmanagementinmeeting infrastructuresneed i f t t d

Enhancedbudgeting a ced budget g


PerformancebasedBudgeting

Effectivecashpolicy Effective cash policy


TreasurysingleAccount

Soundpayrollmanagement:Personnel Sound payroll management: Personnel costingrising


IPPIS

QualityFinancialReporting
AdoptingIFRS/IPSASGIFMIS Adopting IFRS/IPSAS GIFMIS

..Stillonfinancialmanagement Still on financial management

BOOSTINGREVENUEANDPLUGGING LEAKAGES

Lets take it nationwide. .still on financial management

subsidiesremoval SovereignWealthFund

THE END

ICAN41stAnnualAccountants Conference

ImprovingAccountingandAuditing PracticesGlobally:therolesofIFAC, RegionalAccountancyBodiesand DevelopmentPartners,andLessons fromExperience.

ByEdOlowoOkere,Ph.D. Director, CoreOperationsServices, AfricaRegion,TheWorldBank.


InternationalConferenceCentre,Abuja. October19,2011.

Improving Accounting and Auditing Practices Globally: the Roles of IFAC, Regional Accountancy Bodies and Development Partners, and Lessons from Experience.
Introduction The President of the Institute of Chartered Accountants of Nigeria (ICAN) ICAN Council Members, Panel of Discussants Distinguished Ladies and Gentlemen.

It is a great pleasure to address you today, and I would like to thank the Institute for inviting me to this important event, and in particular for arranging such a distinguished panel of speakers. I would also like to take advantage of being on this podium to express my gratitude to ICAN for recognizing me as one of their distinguished Stars during their 2011 Annual dinner and awards last April. I have been asked to discuss the role of IFAC, Regional Accountancy Bodies, and Development Partners in the improvement of global accounting and auditing practices. Broadly, I will discuss this topic in three parts. First, I will discuss the fundamental question of why it matters, i.e. why is it important to improve accounting and auditing practices. In this process, I will define the benchmark for good accounting and auditing practices. In the second part of the presentation, I will discuss how IFAC is strengthening accounting and auditing practices. I will take stock of the status of compliance with SMOs in the world and in Africa, and discuss the support that professional accountancy organizations have been receiving from IFAC, Regional Accountancy Organizations and Development Partners. I will conclude by addressing an important question for the Institute as well as the Accountancy profession in Africa: given the lessons learned, what should be done differently going forward?

Part I: Why is it important to improve accounting and auditing practices, and what is the benchmark for good practices?

Why is it important to improve accounting and auditing practices? The 2008 financial crisis in the United States and the world has exposed critical flaws in how financial systems operated and were regulated. For many years to come, policy makers, academics, regulators, economists, etc will continue to learn lessons from and write about this crisis. One thing that is pretty sure is that investors confidence has been badly shaken, and more than any other players in the market, the accountancy and auditing profession has been challenged. Let me share with you a key statistic of the Working Group on lessons learned from the Financial Crisis of the Public Company Accounting Oversight Bodies1 Investor Advisory Group: nine of the failed financial institutions, including Lehman Bros, Fannie Mae, Countrywide, had received unqualified audit opinions within months of their demises. As a result, serious questions have been raised about both the quality of these financial institutions financial reporting practices and the quality of audits that permitted those reporting practices to go unchecked. While it is difficult to blame the auditors for all the failures of the capital market, investors and policy makers are asking where the auditors were, and why, as the last guardians, they did not protect the publics interest. There continues to be questions about the quality of financial information on which all major economic and market decisions are made. It is a well known fact that lack of transparency imperils effective governance in economic entities. A crucial role of the accountancy profession is to help in providing reliable information for effective decision making, transparency and accountability. This role makes the accountancy profession one of the most important pillars of the financial system of a country. Thus, a strong accountancy profession can significantly contribute to strengthening the national financial system and international financial architecture. As you know, the critical role of the accountancy profession is not limited to the private sector. Well-trained accountants and auditors, that are properly regulated and are held to high ethical codes by a well functioning professional accountancy organization, are needed for the

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB also oversees the audits of broker-dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection.
1

effective functioning of public accountability institutions, including the offices of accountantgeneral, auditor-general, and also in support of the committees of public accounts. In fact, the effective functioning of a country public financial management and accountability system depends to a significant extent on having qualified accountants and auditors as operators of the system.

What is the benchmark for good accounting and auditing practices? The benchmark for good accounting and auditing practices were described in the paper entitled The International Financial Reporting and Accounting Issues: Imperatives of Attainment of Economic Development of Nigeria that I presented here in Abuja during your 39th Annual Accountant Conference. It comprises three key building blocks: International Accounting and Auditing Standards, Processes for Applying International Accounting and Auditing Standards, and A Mechanism for Enforcing Compliance with International Accounting and Auditing Standards.
Processes GoodCorporate Governance Enforcement

Standards International Financial Reporting Standards (IFRS)

HighQuality Controlswithin AuditFirms

Regulatory Oversight

International Standardson Auditing(ISA)

SoundProfession wideQuality Assurance

HighQualityandReliableFinancialReporting Figure: Benchmark for Good Accounting and Auditing Practices

The international accounting and auditing standards consist of the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the International Standards of Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB). The processed of applying standards include, at the minimum: (i) good corporate governance framework, (ii) high quality controls within audit firms, and (iii) sound profession-wide quality assurance. The enforcement mechanism needs to be truly independent, and be capable of monitoring and enforcing compliance with the accounting and auditing standards, ensuring that companies adopt and maintain sound governance arrangements, and that the professions quality assurance mechanism are maintained and are effective. I am quite impressed by the considerable progress that has been made since the 39th Annual Accountant Conference in putting in place most of these building blocks of high quality accounting and auditing practices. A roadmap for the adoption of IFRS has been developed and adopted, and the FRC law has been passed and the body constituted to put in place a robust regulatory oversight for financial reporting in Nigeria. It shows that your conferences are not just talks but they do lead to concrete actions and improvement in practices, and I would like to seize this opportunity to congratulate the Institute, and its leadership and members. To conclude this section, I would like to submit that improving accounting and auditing practices matter. It is necessary to enhance the performance of both the private and public sectors of an economy. The alignment of the accounting profession and the regulators around common objectives and application of principles-based standards will enable companies to produce consistent financial information globally, which is necessary for investments. Enhanced financial transparency helps to improve accountability, and therefore contributes to improving governance and efficiency of economic institutions. Accountancy professionals complying with high quality accounting and auditing standards can contribute to providing safeguards against malpractices and misuse of funds, and act as an important variable to improve governance and anti-corruption measures, which may ultimately result in improved citizen confidence and trust in public institutions.

Part II: How is IFAC strengthening accounting and auditing practices globally? What is the status of compliance with SMOs in the world generally and in Africa specifically? What support has IFAC, Regional Accountancy Organizations and Development Partners been providing to accountancy professional organizations?

How is IFAC strengthening accounting and auditing practices globally? Ladies and Gentlemen, the global profession more than any other players in the financial market has been at the forefront of global standards, thanks notably to the International Federation of Accountants (IFAC). Besides its role in developing international auditing and accounting standards as well as related pronouncements, in 2004 IFAC launched a Member Body Compliance Program as an integral part of its 2003 reforms. The Compliance Program entails a set of indicators, namely Statements of Membership Obligations (SMOs or Statements) that provide clear benchmarks to current and potential IFAC members to assist them in ensuring high quality performance by professional accountants. Essentially, the seven SMOs serve as a framework for credible and high-quality professional accountancy organizations that are focused on serving the public interest by: (a) supporting the adoption and implementation of international standards; and (b) maintaining adequate enforcement mechanisms to ensure professional behavior of their individual members. Participation in the Program is mandatory for the 164 members and associates in 125 countries. Five of the Seven SMOs (SMO 2, 3, 4, 5 and 7) cross reference to the five sets of international standards established by the four independent standard-setting boards supported by IFAC and the International Accounting Standards Board (IASB). The other two SMOs (SMO 1 and 6) establish best practice for Quality Assurance Reviews and Investigation and Disciplinary processes. In accordance with IFAC Constitution and the text of the SMOs, all IFAC members and associates are required to adopt and support implementation of relevant international standards (i.e. international accounting, auditing, ethical, education, and public sector accounting standards), and best practices within their countries, recognizing that in many jurisdictions the mandate to establish standards and practices does not exist within the member but in some other regulatory body. In these instances, member bodies are expected to use their best endeavors to advocate to those having the relevant mandate and support the adoption of the standards.

The IFAC Member Body Compliance Program is a staff driven program reporting to the Chief Executive Officer. The implementation and operation of the Program is overseen by the Compliance Advisory Panel (CAP) that also provides advice to the staff. The CAP is comprised of six highly experienced professionals, one from each major geographic region of the world. The Program is also subject to external oversight by the Public Interest Oversight Board (PIOB). The total number of staff supporting the Program has steadily increased over the last six years as the three phases of the Program were implemented. As of 2011, the Program is administered by an Executive Director and a team of seven professional and two administrative staff. The staff has broad global experience with skills in over 10 languages, including French, Spanish, Russian and Arabic. The overriding objective of the Compliance Program is to encourage continuous improvement in the practice of accountancy through an ongoing assessment of IFAC members and associates actions to meet the requirements of the SMOs. The Program has been implemented in three distinct phases: Part 1, launched in 2004, was a fact gathering exercise about the legal, regulatory and standard-setting frameworks in each jurisdiction represented by an IFAC member or associate. Part 2 was launched in 2005 and allowed IFAC members and associates to self-assess their degree of compliance with the requirements of the SMOs. Finally, Part 3 was launched in 2007 when IFAC members and associates were requested to draft Action Plans on activities to make progress on the adoption and implementation of international standards, the enforcement mechanisms, and the improvement of the quality of audit. Furthermore, IFAC is assisting Professional Accountancy Organizations in emerging and developing countries through its Professional Accountancy Organization Development Committee (PAODC), previously known as the Developing Nations Committee. Africa is represented in the PAODC by three nominees from the Institute of Chartered Accountants of Tunisia, the Institute of Certified Public Accountants of Kenya, and the Zambia Institute of Chartered Accountants. The PAODCs three key objectives are to: (i) develop the capacity of the accountancy profession to produce high-quality financial information and sound financial management systems capable of supporting financial stability, economic growth, and social progress; (ii) increase awareness building and knowledge sharing regarding international standards adoption and implementation; and (iii) engage and deepen development partnerships with the international donor community, regional organizations, and public / private

sector. There is a strong link between the work done by the Compliance Advisory Panel and the PAODC. For instance, PAODC members support outreach and technical assistance efforts to further the completion of Part 3 Action Plans. In addition, IFAC contributes to the Reports on the Observance of Standards and Codes (ROSC) Accounting and Auditing Program of the World Bank, which assesses accounting and auditing practices in Banks member countries in order to determine the degree of compliance with international standards. This assessment plays a broader and more macro role in determining whether countries are complying with adopted standards. Recognizing the importance of SMO compliance, the World Banks ROSC Accounting and Auditing reviews and follow-up activities give much emphasis on assessing the institutional capacity of professional accountancy organizations to comply with the SMOs.

Compliance status with SMOs in the world and in Africa The World Bank ROSC Accounting and Auditing assessments and the SMO compliance program provide a good overview of the status of accounting and auditing practices in the World and in Africa. During the past ten years, the World Bank Africa region has undertaken 36 ROSC Accounting and Auditing assessments in 33 countries,2 including Nigeria. As of today, a relatively high number of the IFACs Compliance Program Action Plans (153) have been published on the Program website. A large part of these Action Plans have also been updated as the CAP and IFAC staff consider that it is very important to keep Action Plans up to date to reflect the Program related activities that are currently being pursued by IFAC members and associates. The CAP and staff have also established a monitoring process to review the progress of IFAC members and associates with respect to the implementation of the action plans they are implementing to further meet the requirements of the SMOs. This monitoring process allows them to frequently obtain information about IFAC members progress with respect to the adoption and implementation of the international standards on accounting, auditing, ethics, public sector accounting and best practices with respect to quality assurance review system and investigation and discipline mechanisms.

Please see Annex -3

So, what are the key findings of the ROSC Accounting and Auditing reviews3 and the cross-cutting issues emerging from the latest IFACs compliance review program? Overall, there is good progress globally with respect to the adoption and implementation of international standards by IFAC members and Associates, and more generally with regard to meeting the requirements of the SMOs. In cases where an IFAC member/associate is not making progress, it is usually due to specific regulatory circumstances, delays related to the political process, and/or lack of financial capacity. Members and associates from Africa are generally progressing well with respect to the implementation of their planned activities, and thereby further meeting the requirements of the SMOs. For instance, when Part 3 of the Compliance program started, there were differences between the levels of compliance of specific IFAC members in Africa when compared with other organizations from outside the region. This gap is, however, being narrowed as the less developed organizations make progress on the implementation of the activities they have planned with respect to the SMOs as well as the implementation of the ROSC Accounting and Auditing recommendations. The cross-cutting issues emerging from ROSC Accounting and Auditing reviews4 and IFACs compliance review program can be summarized as follows: Overall capacity of professional accountancy bodies. The development and effectiveness of professional accountancy organizations vary greatly within and between Regions and even within Africa. In fact, several countries in the continent still do not have professional accountancy organizations, and when they exist, these organizations often lacked the necessary resources, knowledge and skills to perform their role of building and maintaining a high-quality accountancy profession as envisaged by the IFAC guidance5. Education and Continued Professional Development. [Compliance with SMO 2: International Education Standards for Professional Accountants and Other International Accounting Education Standards Board (IAESB) Guidance]: The second area of concern is the extent to which education and training for professional accountants are consistent with the International Education Standards for Professional Accountants (IES). Overall it

For country-level information, please review ROSC A&A reports available at the following address: www.worldbank.org/ifa/rosc_aa.html. 4 For country-level information, please review ROSC A&A reports available at the following address: www.worldbank.org/ifa/rosc_aa.html. 5 IFAC publication on Establishing and Developing a Professional Accounting Body.
3

varies widely across countries in Africa. Some countries have well-developed postuniversity training, practical experience and professional examinations. In many countries in Africa, however, the requirements for professional accountancy qualification are significantly lower than the IES. For example, lack of adequate practical training and assessment in this regard, is a common picture in many countries. The public practice licensing requirements for auditors and accountants typically fell short of those specified by IES. Continuing professional development (CPD) is also one of the weaker areas in the ROSC Accounting and Auditing review countries. Indeed, in many countries in Africa, CPD has not been implemented, and where CPD requirements are specified, they are typically not monitored. Ensuring Compliance with Accounting and Auditing Standards. This is the third area of concern. The monitoring and enforcement of accounting and auditing standards is often the weakest element of the accountancy profession, reflecting inadequate capacity and/or mandate. Achieving compliance with the applicable accounting and auditing standards remains a significant challenge in majority of the ROSC Accounting and Auditing countries throughout the world, especially in Africa. For instance, several countries pinned their hopes on high quality corporate financial reporting by adopting IFRS. However, in this process, while companies are required to comply with the requirements of IFRS, in practice compliance is uneven and inadequate. In fact, many countries in the Africa Region still have not put in place any arrangement for implementing IFRS and ISA. Code of Ethics. Many Accountancy professions in the region have adopted the Code of Ethics of the IESBA without modifications, including all subsequent amendments. However, challenges remain in the implementation of the various codes. Professional accountants must, however, strive to comply with the ethical standards of their organizations given the great expectations from investors, the public, and policy makers.

How are regional accountancy organizations and development partners facilitating compliance with SMOs and contributing to the overall efforts to improve accounting and auditing practices?

Regional accountancy organizations and development partners have supported the profession in many ways, including advocacy, analytical work, technical assistance and capacity building projects. We have already mentioned a few of them, including the important role played by the World Bank in the ROSC-Accounting and Auditing Assessments. In addition, during the past ten years, the Africa Region Financial Management Unit of the World Bank has established an impressive record of 41 capacity building projects6 in different Africa countries, and more are underway. The main focus areas of these projects include: (i) updating the legal framework of accounting and auditing; (ii) developing and strengthening professional accountancy organization; (iii) strengthening professional

accountancy education and training

arrangements,

including continuing professional

development; (iv) strengthening institutional arrangements for issuing, disseminating, monitoring and enforcing internationally comparable accounting and auditing standardse.g. IFRS, ISA, and IPSAS; and (v) upgrading curriculum, and accounting and auditing instruction in higher educational institutions. Furthermore, as you all know, the World Bank Africa Region supported the establishment and eventually the launching of the Pan African Federation of Accountants (PAFA) in Senegal in May 2011. We see PAFA as an important vehicle to accelerate the development of the profession in the continent, and to strengthen its voice on the global stage. PAFA will need to build on the work done by other sub-regional organizations, such as the Association of Accountancy Bodies of West Africa (ABWA) and the Eastern, Central and Southern Africa Federation of Accountants (ECSAFA). These associations have supported their member bodies in various ways to improve accounting and auditing practices mainly through networking, knowledge sharing, advocacy, and direct assistance to less developed members. The World Bank has in turn supported these regional organizations to provide services to their member bodies and individuals in practice. In addition to supporting individual country professional accountancy bodies, the World Bank had also supported sub-regional accountancy

Please see Annex 2

organizations so they can better serve their member bodies. For example, the World Bank provided two grants to ECSAFA to strengthen and harmonize accounting and auditing practices and standards in the private sectors of member countries. Similarly, the World Bank provided a grant to ABWA to facilitate the adoption of international standards and improve professional accounting practice in member countries, and support the implementation of the Accounting Technician Scheme of West Africa (ATSWA). Let me pause here to thank ICAN for its excellent work and capacity building efforts in ABWA countries, especially during the implementation of the ABWA IDF Grant. The implementation completion review of the grant rated the achievements of the development Objectives as highly satisfactory. As a testimony, during the PAFA conference, I was approached by several French speaking countries in the region who commended ICAN for its leadership during the implementation of the grant. They insisted on your efforts to reduce the language barriers and support less advanced professions in the sub-region through capacity building activities. I strongly encourage you to continue these efforts. This leads me to the concluding section of this presentation where I will try to address the following questions: What more should IFAC, regional accountancy organizations and development partners be doing to facilitate the development of the profession, and to improve accounting and auditing practices in Africa? What are the lessons learned from past and current activities of FAC, regional accountancy organizations and development partners, and what should be done differently going forward?

Part III: What are the lessons learned from past and current activities of IFAC, regional accountancy organizations and development partners, and what should be done differently going forward?

Several lessons can be drawn from the various efforts to improve accounting and auditing practices in developing countries, including analytical reviews, policy advice, technical assistance, and implementation of projects/grants, but I will just highlight here the key ones. A common lesson learned from the implementation of Bank-funded operations, for example, to support the improvement of accounting and auditing practices is that reforms cannot be completed under one project or grant. There is always a need for follow-up activities and

additional funding. Also, we have observed that there is a need for greater ownership of reforms by the profession, i.e. ownership beyond the government or oversight/regulatory agency. Another important lesson is that reform actions need to be better sequenced and designed in ways that are aligned with the capacity of individual professional bodies and countries. Interestingly, we found in many countries that the divergence of practices between public and private sectors add to the complexity of reform activities as well as the efforts required to implement them. Finally, capacity strengthening is required at the individual national

professional accountancy organization level as well as at the sub-regional or regional accountancy organization level. While interventions at the sub-regional or regional level can help to reach several national accountancy bodies, they cannot tackle all the areas where improvements are needed because of differences in country contexts as well as the need to engage with country stakeholders that are often not represented in sub-regional or regional accountancy organizations.

In closing, let me share with you few areas where I believe we can do things differently going forward. Funding of reforms. There is a need to secure a pool of resources for accounting

and auditing reforms that various stakeholders could contribute to, and less developed accountancy bodies could then access, as appropriate. IFAC and the World Bank are currently spearheading an initiative in this regard, which would result in an MOU between IFAC and development partners. The challenge is to broaden this initiative so other stakeholders could also participate in the initiative. Improving the sequencing of reforms is key. Given the challenges in the sector

and the weak capacity of many professions in the continent, we need better design and sequencing of reforms in a manner similar to the platform approach for public financial management a few years ago. This would ensure that there is a strong foundation for reforms and one reform action builds on previous action(s). Ownership and sustainability of reforms. This is a major challenge and it calls

for more commitments by members of the profession. Membership contributions are still a major challenge leaving the professions with very few means to achieve their goals. Hence, there is a need for members to step up and contribute to the development of the profession by giving more

time and being up to date in their contributions. Reforms cannot be sustainable without commitment and ownership from members of the profession. Improved focus on compliance. The issue of compliance is a global challenge

and needs bold action from the profession. It is not sufficient to have good standards and rules in place; it is important to ensure that there is strong compliance with the rules and standards. Strong monitoring of compliance is therefore essential to ensure the credibility of the profession. Compliance with Ethical standards: While investors and public confidence is

easily shaken, it is hard to restore. It is by holding to high standards that we will be able to gain [or regain] this confidence. The profession is emerging, to some extent, untouched from the 2008 crisis, but this could be the last time investors, policy makers, and other players are overlooking any implication of this profession in global financial crises. We need to remember that the quality of the information we are certifying or providing will impact on peoples assets, lives, and future. Therefore, more than ever we need to play our role of last guardians, and take the necessary steps to achieve the objective of high quality financial information and thereby renew confidence in the Profession. Reducing the barriers between the public sector and the private sector. This

is an area where more needs to be done. The profession should be developed in such a way that it serves the interests of both the public and private sectors. Therefore, compliance with SMO 5, International Public Sector Accounting Standards and other IPSASB pronouncements should be part of the Professional Accountancy bodies strategies. It implies not only a strong collaboration with public sector oversight institutions, but also gradual development and integration of public sector curriculum into professional accountancy qualifications. IFAC, regional accountancy organizations and development partners can and should do more to assist the profession in the overall process of improving accounting and auditing practices globally, and developing the accountancy profession in Africa. What IFAC and regional accountancy organizations can do will to a large extent depend on your role and financial contributions as members of the global profession. I mean ICAN and its members have a key role to play. I mentioned earlier on your commendable role in ABWA activities. A similar role is expected in PAFA activities, and I hope we can continue to count on your goodwill.

Finally, I would like to leave you with one important thought: ICAN can and should play a leading role in improving the capacity of less advanced professional accountancy organizations in Africa. Being a strong professional body in Africa, ICAN has a responsibility to assist its less developed professional accountancy bodies in neighboring countries to improve and become well developed professional accountancy bodies. In this regard, ICAN may learn from the experience of twinning partnership role played by ICAEW, ICAS, Irish CPA Institute, ACCA, Indian Institute of Chartered Accountants, Royal NIVRA (professional accountancy organization of the Netherlands), and others with less developed professional accountancy bodies. ICAN has comparative advantages in many areas, which can be deployed in capacity building and technical assistance to less professional accountancy bodies in the rest of Africa, and why not in outside Africa as well. I would like to end my presentation by congratulating the organizers of this conference for an excellent job. Also, many thanks to you, distinguished ladies and gentlemen, for your attention. God bless.

Annex 1: World Bank Supported Accountancy Development Projects in Africa Region


1. IDF project--ABWA-Strengthening and consolidation of professional accounting and auditing practices in ABWA (FY2006) 2. IDF project--Benin: Strengthening capacity of the accountancy profession (FY2007) 3. FIRST Initiative project--Botswana: Updating accounting and auditing legislation (FY2006) 4. FIRST Initiative project--Botswana: Supporting establishment of the Botswana Accounting Oversight Authority (FY2009) 5. IDF project--Botswana: Strengthening Botswana Institute of Accountants (FY2008) 6. IDF project--Burkina Faso: Support to the Chartered Accountant Board (FY2010) 7. IL project--Burundi: Strengthening the accountancy profession as a component of Financial and Private Sector Development Project (FY2010) 8. IDF project--Cameroon: Support to the accountancy profession (FY2010) 9. IDF project--Comoros: Supporting implementation of IFRS as a part of the project Capacity Building in Banking Supervision (FY2010) 10. IDF project--Cote dIvoire: Support for the accountancy profession (FY2010) 11. IDF project--DRC: Strengthening accounting and auditing institutional framework and practices (FY2005) 12. IDF project--ECSAFA: Harmonization and Upgrading of Accounting and Auditing Practices in SADC Region--Angola, Botswana, DRC, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Mauritius, Seychelles, South Africa, Tanzania, Zambia, and Zimbabwe (FY2002) 13. IDF project--Ethiopia: Support to the accountancy profession (FY2010) 14. IDF project--The Gambia: Strengthening the accounting profession (FY2010) 15. FIRST Initiative project -- The Gambia: Strengthening the regulatory framework of accounting and auditing (FY2011) 16. IDF project--Ghana: Institutional support to the accountancy profession (FY2010) 17. FIRST Initiative project--Ghana: Strengthening the Institute of Chartered Accountants, Ghana (FY2010) 18. IDF project--Ghana: Support to the accountancy profession (FY2006) 19. FIRST Initiative project--Kenya: Establishing audit quality review program at ICPAK (FY2005) 20. FIRST Initiative project--Kenya: Strengthening accounting and auditing legal framework (FY2011) 21. IDF project--Lesotho: Capacity Building of the Institute of Accountants (FY2008) 22. IDF project--Liberia: Strengthening the Liberian Institute of Public Accountants (FY2010) 23. FIRST Initiative project--Malawi: Developing ROSC A&A follow-up Country Action Plan (FY2008) 24. IDF project--Malawi: Strengthening the accountancy profession (FY2009) 25. IDF project--Malawi: Support to the accountancy profession (FY2002) 26. IDF project--Mauritania: Support to the accountancy profession (FY2005) 27. BB support--Mauritius: Drafting the Financial Reporting Act (FY2003) 28. FIRST Initiative project--Mauritius: Establishing the Financial Reporting Council (FY2005) 29. IL project--Mozambique: Strengthening the accounting profession and enhancing corporate financial reporting, as a component of Competitiveness and Private Sector Development Project (FY2009) 30. IL project--Mozambique: Supporting IFRS implementation, as a component of Financial Sector Technical Assistance Project (FY2006) 31. IL project--Nigeria: Capacity strengthening of the Nigerian Accounting Standards Board (NASB), as a component of Federation Government Economic Reform and Governance Project (FY2005) 32. IDF project--Nigeria: Enhancing the quality of accounting practice (FY2006)

33. IDF project--Nigeria: Capacity strengthening of ICAN to support national and regional accountancy development (2010) 34. IL project--Rwanda: Institutional capacity building of the Institute of Certified Public Accountants of Rwanda, as a component of Private Sector Competitiveness and Enterprise Development Project (FY2008) 35. IDF project--Senegal: Support to the accountancy profession (FY2006) 36. IDF project--Sierra Leone: Support to the accountancy profession (accounting and auditing standard setting and dissemination) (FY2006) 37. FIRST Initiative project--South Africa: Drafting Auditing Profession Act (FY2004) 38. FIRST Initiative project--Tanzania: Updating accounting and auditing legislation (FY2006) 39. IL project--Tanzania: Strengthening capacity of National Board of Accountants and Auditors (NBAA), as a component of Financial Sector Support Project (FY2006) 40. IDF project--WAEMU: Development of accounting regulation institutions and auditing profession (FY2009) 41. IDF project--Zimbabwe: Strengthening accounting and auditing oversight at PAAB (FY2011)

Annex 2: Some Examples of the World Bank-funded Accounting and Auditing Capacity Building Projects in the 1. ABWA-Strengthening and Consolidation of professional Accounting and Auditing Practices in ABWA
Description of the project: The objective of this grant request is to facilitate the adoption of international standards and improve professional accounting practice in ABWA member countries. To achieve the above objectives, the grant financed the following main categories of activities: 1. Dissemination of International Standards in Accounting, Auditing and Education 2. Development of a Harmonized Framework for Professional Accounting Education and Practice 3. Knowledge Management Also, the grant supported ABWA to put in place the Accounting Technicians Scheme West Africa (ATSWA). The objectives on the Scheme are as follows: i. To provide a recognized qualification for the accounting and auditing staff employed in the public sector, industry, commerce and in various offices of practicing accountants. ii. To help meet the need for middle-level accounting personnel in the economy especially for the accounting and finance departments of various government agencies and parastatals. iii. To give status to Accounting Technicians iv. To provide an opportunity for the Accounting Technicians to progress towards Professional Qualification as Chartered Accountants The ATWSA scheme has been developed and ongoing in West African countries. In this regard: (a) All 12 study packs of the ATSWA uniform education and examination scheme has been printed and made available to participating countries. The Insight which contains past questions and suggested solutions has also been translated to French. (b) The French version of the syllabus is being studied by the Francophone member countries with a view to harmonizing same with the OHADA system. (c) Over 3,200 students from Nigeria, Ghana and Liberia have successfully completed the ATSWA scheme.

2. Botswana--Updating accounting and auditing legislation; and Supporting Establishment of the Botswana Accounting Oversight Authority
Description of the project: This project provided assistance to the Ministry of Finance to prepare draft laws--Accountants Act, and Financial Reporting Act--to modernize legal backing for the Botswana Institute of Accountants; and establishment of the Botswana Accounting Oversight Authority. The project also includes support for start-up work of the Botswana Accounting Oversight Authority. The two laws were passed by the National Assembly of Botswana in July 2010.

3. Botswana--Strengthening Botswana Institute of Accountants


Description of the project: This project supported the establishment of a twinning arrangement between Botswana Institute of Accountants and a strong professional accountancy body. The twinning partner provided assistance to the BIA to launch a national professional accountancy examination, and to put in place arrangements for functioning as a modern professional accountancy organization. The project also includes a

component on upgrading accounting and auditing curriculum and teaching in higher educational institutions.

4. Eastern, Central and Southern African Federation of Accountants (ECSAFA)


Description of the project: The purpose of this grant is to contribute to the strengthening and harmonization of accounting and auditing practices and standards in the private sectors of the region. Its specific, verifiable objectives are to: facilitate the access of the regions accountants and auditors to international standards; train a group of peer reviewers from among regional professionals to help accountants and auditors understand and implement the internationally recognized standards; and create among the regions accountants and auditors a new understanding of international expectations that will serve as a basis for harmonization of practice in the profession throughout the region. The three pronged approach will address the need for harmonization in the accountancy profession and will improve the business climate: raising standards of accounting and auditing; ensuring Compliance with Standards; and strengthening ECSAFA Secretariat to remove obstacles for compliance and monitor progress.

5. Ghana--Strengthening the Accounting Profession


Description of the project: This project aims to strengthen the capacity of Ghana's national professional accountancy body, Institute of Chartered Accountants-Ghana (ICAG). Specific focus of this project is on enhancing international recognition of the professional accountancy qualification awarded by ICAG. A twinning arrangement with a strong professional accountancy body is being established to achieve the project objectives.

6. Ghana--Institutional Support to the Accountancy Profession


Description of the project: This project supports further strengthening of the Institute of Chartered Accountants, specifically through 1) providing support for the dissemination and sensitization of the reporting requirement of IFRS; 2) developing and delivering specialized training programs for public sector accountants on IPSAS; and 3) providing support for the development of electronic resource libraries and on-line learning centers for the trainee accountants, members and the general public.

7. Kenya--Audit Quality Review Program


Description of the project: This project assisted the Institute of Certified Public Accountants of Kenya (ICPAK) to strengthen its capacity to assist its members in enhancing the quality of audit. The project supported ICPAK to develop its practice review capacity, and inform its members about the process of monitoring the audit activities. A generic audit practice manual was also developed and disseminated under this project.

8. Liberia--The liberian Institute of Certified Public Accountants


Description of the project:

Although this project was prepared and approved before launching the ROSC A&A exercise, the project implementation is planned to be shaped in line with the policy recommendations of ROSC. The objective of this project is to transform and empower LICPA by building its capacity to be able to educate, train and regulate the accountancy profession in Liberia. The overall expected outcome is improved transparency and accountability in both the private and public sectors through better financial reporting and oversight arrangements. This project will also support strengthening of the secretariat of LICPA.

9. Malawi--Strengthening the Accountancy Profession


Description of the project: This project supports the establishment of a twinning arrangement between Society of Accountants of Malawi (SOCAM) and a strong professional accountancy body. The twinning partner provides technical assistance to SOCAM mainly to strengthen its institutional capacity to comply with the Statements of Membership Obligations of IFAC, and to develop and operationalize a national professional accountancy qualification.

10. Mauritius--Preparation of the draft "Financial Reporting Act." The law was enacted in 2004.
Description of the project: ROSC program supported the Ministry of Industry, Financial Services and Corporate Affairs to develop a new law--Financial Reporting Act. The new law provided legal backing for accounting and auditing standard setting in compliance with international standards, establishment of the Mauritius Institute of Accountants, and establishment of the Financial Reporting Council as an independent oversight body.

11. Mauritius--Establishing Financial Reporting Council


Description of the project: This project assisted with the establishment and initial operation of the Financial Reporting Council (FRC) in Mauritius. This project has supported actions for strengthening and effectiveness of the accounting and auditing industry in Mauritius. The two main outputs of the project were: (i) the successful establishment of the FRC, including its executive arms, complete with policies and procedures documentation and a safe transition of responsibilities from existing regulators; and (ii) the assessment, development and delivery of a capacity building program to ensure the sustainability of the FRC.

Mozambique--Competitiveness and Private Sector Development (sub-component: strengthening the accounting profession and enhancing corporate financial reporting)
Description of the project: A sub-component of the Competitiveness and Private Sector Development Project supports operationalization of the newly established professional accountancy body through twinning arrangement with a strong member body of IFAC. Prior to launching of this project, a component of the Financial Sector Technical Assistance focused on IFRS implementation in the banking sector; and provided training to the corporate accountants on IFRS, and developed IFRS implementation materials.

12. Nigeria--Federal Government Economic Reform and Governance Project

(A sub-component on Private Sector Accounting and Auditing)


Description of the project: A sub-component of the project focused on improving financial reporting practices by strengthening the institutional capacity of Nigerian Accounting Standards Board (NASB). The project activities aimed at implementation of some key recommendations of the ROSC A&A report and a part of the country action plan.

13. Nigeria--Enhancing the Quality of Accounting Practice


Description of the project: The project assisted ICAN to develop the capacity to do technical research and curriculum development, and to implement an enhanced curriculum for professional accounting education, and to monitor quality compliance by its members with standards and codes of ethics.

14. Nigeria--Capacity Strengthening of ICAN to Support National and Regional Accountancy Development
Description of the project: The Objective of this project is to consolidate the achievements of the previous capacity building project, to build upon the foundation laid during the past few years, and to further strengthen institutional capacity of ICAN through twinning arrangement with a strong member body of the International Federation of Accountants (IFAC). This project aims at enabling ICAN to achieve mutual recognition arrangement with the twinning partner and some other strong professional accountancy bodies in OECD countries. Also, ICAN aims to reach and maintain internationally recognized level of quality assurance, and to be able to better lead national accountancy profession and development, as well as to adapt to new changes.

15. Rwanda-- Competitiveness and Enterprise Development Additional Financing (component: accounting and auditing)
Description of the project: A component of the Competitiveness and Enterprise Development Project supports institutional capacity building of the newly established Institute of Certified Public Accountants of Rwanda, through twinning arrangement with a strong member body of IFAC.

Annex: 3 Countries with Completed ROSC Accounting and Auditing in Africa Region FY 02 (July 1, 2001 June 30, 2002) 1. Kenya FY 03 (July 1, 2002 June 30, 2003) 2. Mauritius 3. South Africa FY 04 (July 1, 2003 June 30, 2004) 4. Ghana 5. Nigeria FY 05 (July 1, 2004 June 30, 2005) 6. Senegal 7. Tanzania 8. Uganda FY 06 (July 1, 2005 June 30, 2006) 9. Botswana 10. Cameroon 11. Sierra Leone FY 07 (July 1, 2006 June 30, 2007) 12. Malawi 13. Zambia 14. Burundi FY 08 (July 1, 2007 June 30, 2008) 15. Ethiopia 16. Madagascar 17. Mozambique 18. Rwanda FY 09 (July 1, 2008 June 30, 2009) 19. Benin 20. Cote dIvoice 21. Mali 22. Niger 23. DRC

FY 10 (July 1, 2009 June 30, 2010) 24. Burkina Faso 25. Congo 26. The Gambia 27. Kenya (second review) 28. Lesotho 29. Sudan 30. Togo FY 11 (July 1, 2010 June 30, 2011) 31. Central African Republic 32. Gabon 33. Liberia 34. Mauritius (second review) 35. Nigeria (second review) 36. Zimbabwe

Annex 4: SMO Compliance status in Africa Compliance Responses and Part 3 Action Plans
Country 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CAMEROON COTE D'IVOIRE EGYPT GHANA KENYA LIBERIA MADAGASCAR MALAWI MAURITIUS MOROCCO NAMIBIA NIGERIA SENEGAL SIERRA LEONE SOUTH AFRICA SOUTH AFRICA SWAZILAND TANZANIA, UNITED REPUBLIC OF TUNISIA UGANDA ZAMBIA ZIMBABWE Institute The Institute of Chartered Accountants of Cameroon Ordre des Experts Comptables et Comptables Agrs de Cte d'Ivoire The Egyptian Society of Accountants & Auditors The Institute of Chartered Accountants (Ghana) Institute of Certified Public Accountants of Kenya The Liberian Institute of Certified Public Accountants Ordre des Experts Comptables et Financiers de Madagascar The Society of Accountants in Malawi Mauritius Institute of Professional Accountants Ordre des Experts Comptables du Royaume du Maroc (Morocco) (Certified Public Accountants Association) Institute of Chartered Accountants of Namibia The Institute of Chartered Accountants of Nigeria Ordre National des Experts Comptables et Comptables Agrs du Sngal The Institute of Chartered Accountants of Sierra Leone, (ICASL) The South African Institute of Chartered Accountants The South African Institute of Professional Accountants Swaziland Institute of Accountants National Board of Accountants and Auditors (NBAA) Ordre des Experts Comptables de Tunisie Institute of Certified Public Accountants of Uganda Zambia Institute of Chartered Accountants The Institute of Chartered Accountants of Zimbabwe Status: Member Body / Associate Member Body Member Body Member Body Member Body Member Body Member Body Member Body Member Body Associate Member Body Member Body Member Body Associate Member Body Member Body Member Body Member Body Member Body Member Body Member Body Member Body Member Body Part 3 Action Plan

Jul.2011 Dec.2010 Feb.2011 Jul.2011 Sep.2011 May11 Jul.2011 Aug.2011 Apr.2011 Feb.2011 May11 May11 Mar.2011 May11 Aug.2011 May11 Sep.2009 Sep.2011 Jul.2011 Jul.2010