The rapid spread of collapse from East Asia through Eastern Europe and on to South America has done a great deal to force international organisations, including the World Bank and the IMF, to take a greater interest in financial issues to ensure stability. Now, at the two massively influential bodies' annual meetings in Washington this week, the bank and the IMF have given very public backing to the importance of accountants in improving the financial architecture around the world. It is a difficult time for the two organisations. While the West wants to see financial trade barriers lifted, many of those countries that saw their economies hit the rails just a couple of years ago are more wary of liberalisation. Meanwhile economists and politicians are beginning to question the economic medicine the IMF, led by Michel Camdessus and his deputy Stanley Fischer, has prescribed. To make matters worse, a fresh scandal has hit. The IMF is still smarting from recent disclosures that $200m of its loans to Russia may have been diverted through banks including the Bank of New York in what is believed to be the biggest fraud of all time. That the profession should take centre stage in what is essentially a debate about financial management should come as little surprise. Many of the issues on this week's agenda are meat and drink to most accountants: data dissemination, transparency (in this case of fiscal, monetary and financial policy) and regulation as well as more general accounting, auditing and corporate governance issues. World Bank vice-president Jules Muis has taken the lead over the past year by recruiting a number of accountants to the bank, recognising that it should become an example of how proper audited accounts can prove the foundation to strong investment and, in turn, a thriving economy. He has also sought to recruit more accountants to the bank itself. Chief among these is John Hegarty, the ex-head of the European accountants body FEE. Both Hegarty and Muis were present this week at the launch of a new initiative designed to bring together the lessons of the Asian economic crisis and the importance of strong financial information. The Global Forum on Corporate Governance, which will allow private and public-sector members to share their experiences, was launched officially on Monday by Peter Woicke, International Finance Corporation managing director. The IFC is a member of the bank and is the largest multilateral source of loan and equity financing for private-sector projects in the developing world. It has a major interest in ensuring that investors feel assured that their money will be wisely spent. Supporting him was Joanna Shelton, deputy secretary general of the Organisation for Economic Cooperation and Development. The event marked the official unveiling of the OECD's corporate governance principles, which will form the central plank of the forum's work. Heading the initiative is World Bank private-sector development director Magdi Iskander. His work will build on the foundations already laid by Muis. The initial push behind the launch began months ago with self-assessment forms sent to developing countries. That was followed by investor surveys, which have attempted to identify where reforms are needed. The initial findings highlight the fact that the most important issue for these countries is the need for international accounting standards, a crucial first step to a major improvement in the reliability of financial information. A newly established accountancy task force - backed by a private-sector advisory group and a policy dialogue and development forum - will take this information forward and develop the role of accountants in the future of corporate governance. Ahead of this week's meetings, Iskander explained the importance of the bank's refocusing. 'Corporate governance is fundamentally a political process in which the government, the private sector and the other stakeholders must join hands to come up with a reform agenda which is tailor-made to the specific needs of countries,' he said. If the basics of corporate governance are to be applied internationally, accountants will have to play a greater role within the bank. Muis has pledged that Hegarty will not be the only appointment from the profession, but there is still a long way to go in terms of education if Iskander's aim of 'a sustainable culture of enforcement and compliance' is to be achieved.
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