The second meeting of the OECD Eurasian Corporate Governance Roundtable, on «Transparency and Disclosure,» was held 7-8 June in Tbilsi, Georgia. It was hosted by the National Securities Commission of Georgia, the Georgian Stock Exchange, and the International Regional Federation of Accountants and Auditors Eurasia (IRFAA). The agenda included speeches and papers by key officials from the host country, OECD, and the International Finance Corporation, as well as discussions by panels of experts about many significant issues of transparency and disclosure of financial information.
In his welcoming remarks, Mr. Seiichi Kondo, Deputy Secretary-General of OECD, stressed the need for interdependence and cooperation among four major actors in the quest to achieve good governance: governments, international organizations, business, and civil society. According to Mr. Kondo, if any one of these actors fail, all fail, and no one of them should be dominant. He also said, «For a country in transition, good governance practices are essential for strengthening democracy; promoting economic prosperity, social cohesion, and environmental sustainability; and maintaining confidence in public institutions.
In his opening discussion of transparency and corporate governance, Mr. Rainer Geiger, OECD Deputy Director for Financial, Fiscal and Enterprise Affairs, listed some important elements of transparency:
- Communication between management, shareholders, and [other] stakeholders
- True and fair view of the company’s situation, performance, and prospects – which he related to the quality of information, in which IAS, independent audit, and internal monitoring play key roles
- Reliable and material information, both financial and non-financial, for disclosure to stakeholders.
The relationship between IAS and transparency and disclosure was further emphasized in a presentation by Mr. Sergei Balchenko of IRFAA. With the help of papers prepared by researchers from the countries represented, he analyzed, country by country the gap between full IAS implementation and the actual situation of development and application of accounting standards in the Eurasia area.
Many other speakers and panel members also mentioned the need for IAS, along with their discussions of such governance issues as the duties and functions of the board of directors, the need for strong independent auditors, the roles of regulatory authorities, and the impact of governance on availability and cost of capital.
ICAR was represented at the conference by Mr Donald Beskine, Managing Director. His speech included a discussion of the principle focus of IAS on the decisions of investors and creditors and their impact on capital markets throughout the world. He also mentioned that the needs of investors and analysts have been primary drivers in the development of IAS, rather than the stewardship aspects of governance. However, IAS is also an important element in the measurement and improvement of the stewardship of enterprise directors and management. There was discussion about the differences between IAS and US GAAP and whether one was more suitable. Donald Beskine proposed and it was mutually accepted that both US GAAP and IAS are high quality systems and either is suitable to be adopted as a basis of economic decision-making. In fact, they are converging and the differences will diminish to insignificance in the next several years. The vital issue is to get on with the process of adoption.
Readers of Accounting Report who wish to obtain information on the papers and speeches presented at this conference may access IRFAA website http://www.irfaa-eurasia.org.