ARTICLE - Progress in Motion: CLMVs Ongoing Commitment to IFRS Adoption

Progress in Motion: CLMV’s Ongoing Commitment to IFRS Adoption
Key Takeaways from the CLMV Reporting Conference 2023
Aucky Pratama (Executive Director, AFA)

As member bodies of the International Federation of Accountants (IFAC), the Professional Accountancy Organisations (PAOs) of the ASEAN Member States must comply with the requirements of the IFAC Statements of Membership Obligations. Adoption and implementation of international standards and best practices are critical components for the PAOs’ successful compliance and the strengthening of the accountancy profession in their respective jurisdictions.

For developing economies such as Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV), a transparent and accountable financial reporting ecosystem is fundamental to attracting investment and stimulating economic growth. Adoption and implementation of IFRS Accounting Standards and IFRS for SMEs Accounting Standard becoming more of a necessity than a luxury.

AFA together with the Lao Chamber of Professional Accountants and Auditors (LCPAA) organised the CLMV Reporting Conference 2023 to facilitate the sharing of the latest developments in IFRS. The conference also served as a platform for discussion between key stakeholders of the CLMV jurisdictions and representatives of IFAC, the International Accounting Standards Board (IASB), and the Asian-Oceanian Standard-Setters Group (AOSSG).

These are my key takeaways from our discussion:

Planning is essential, but commitment is everything. Adoption and implementation of standards is a never-ending and resource-intensive journey. A clear, realistic, measurable, and flexible plan tailored to the jurisdiction’s aspirations and conditions is only half the equation. A strong commitment for continuous learning and consistent improvement from all stakeholders, under the leadership of the key decision makers is just as important. A robust and accommodative legal and regulatory framework is a strong indication of a jurisdiction’s commitment to adopt and implement the standards.

International standards, local context. There is no one-size-fits-all plan for a successful adoption and implementation of the standards. Achieving the objective of enhancing reporting comparability does not have to come at the expense of the jurisdiction’s local characteristics, such as legal frameworks, business practices, and cultural norms. Localising the international standards while maintaining their principles is an important step towards building stakeholders’ acceptance and ensuring their applicability in the jurisdiction.

Learning by doing. Lack of technical capacity is a common and known issue for many jurisdictions, including the CLMV. To sustain its adoption and implementation efforts, a jurisdiction cannot continue to rely on external support and must build its own pool of local experts. Thus, an inclusive, ongoing, and up-to-date education program must be an ever-present part of a good adoption and implementation plan. Moreover, stakeholders need to consider the benefits of starting and learning from their journey over waiting for a perfect plan that does not exist.

Don’t reinvent the wheel. According to the IFRS Foundation, more than 160 jurisdictions adopt, require, or permit the use of the IFRS Accounting Standards, or converge their local standards into the global standards. This allows jurisdictions to learn from the experiences of others while fine-tuning their adoption and implementation plans. Stakeholders must collaborate, avoid overlaps, and leverage the collective resources available to deal with implementation costs and infrastructure limitations.

Re-live our discussion and watch a full recording of the CLMV Reporting Conference 2023 in AFA’s YouTube page.

Category: ASEAN Accountants | Post on 29 Juni 2023