Mark Gold is president of the Association of Chartered Certified Accountants (ACCA) and a senior partner at Silver Levene, the largest ACCA accountancy practice in the UK. He was in Kingston, Jamaica last week to attend the 29th Annual Institute of Chartered Accountants of the Caribbean (ICAC) Conference at the Jamaica Pegasus hotel, where he took time out to speak with Sunday Finance about the role of accountants and the need for businesses to adhere to proper financial reporting standards.

Sunday Finance: What role do you believe the accounting profession plays in ensuring economic sustainability?

Gold: I think it’s absolutely one of the core elements. First of all, the global accounting profession itself has a role at every level, whether we are talking about SMEs (small and medium-sized enterprises) or going amongst the very top end of the very large companies. The role of the accountant is really to help those companies grow, to protect the assets of those businesses – which in very large businesses are where pension funds would be held – and to help ensure those companies can raise finance at all levels.

Sunday Finance: Many have blamed accountants and in particular auditors for the financial crisis from which economies around the world are slowing emerging. Has the situation negatively impacted on how the profession is now perceived?

Gold: When it really boils down to it when you look at everything that happened at these companies – the Enrons and World com etc – it was very much more based on ethics, which is very much at the heart of what the accounting professional does. So I think to blame accountanct is too easy and incorrect, it really was an ethical thing going on at various companies. Has the accounting profession rose to the challenge? I think it has in a lot of different ways. For example, now, we are in discussion with large businesses; we are there with the Governments to see how better we can make sure that the work of the finance professional protects the assets of businesses.

Sunday Finance: Are more stringent regulations the way to go in terms of avoiding future financial shocks?

Gold: I think one of the greatest things that has happened, which ACCA supports, is this idea of global regulation. And that’s at two levels – accounting standards and auditing standards. As we can see particularly with the last global crash and on a day to day basis, we are all affected by what goes on in other parts of the world and its very important that potential investors and people looking at these businesses have the ability to read the accounts and understand exactly what they are saying – Everything has the same standards. And certainly what ACCA supports is much more principle-based standards than rule-basd standards

Sunday Finance: SMEs have long had an issue with International Financial Reporting Standards (IFRS), which they claim are overly stringent and irrelevant for their businesses which don’t have public accountability. This prompted the International Accounting Standards Board (IASB) to implement new standards for SMEs to provide a less complex alternative to the full IFRS, but yet there are still complaints. What’s your position in this conflict? Do you think the IASB has struck the right balance with the latest standards for SMEs or do you think there needs to be another review?

Gold: Although I’m president of the ACCA, I’m an SMP (accountant) based in central London, where we have about 6,000 SMEs (clients). That’s what I do on a day to day basis and when I travel the world for ACCA, I meet with SMEs all the time. There is no doubt that SMEs have particular needs and regulation can sometimes be overburdensome for them. But I think what is happening at the moment, particularly with international standards, it will benefit SMEs. Now, what it mustn’t be is an overreaction where because there has been a financial recession, we come back and hit SMEs too hard. Its about having the right rules in place. SMEs are essential to every economy, here in Jamaica and in the UK; nearly 95 per cent of businesses are SMEs. I think we have a long way to go with IFRS but in a way these are brand new rules and the ACCA is very passionate at ensuring that SMEs aren’t over-regulated, but the right regulations are applied to them.

Sunday Finance: Do you think SMEs need to view proper reporting standards more in terms of an investment than an expense?

Gold: SMEs need to know that if they take regulations on board, they are going to find it easier to get finance and the majority of finance are coming from banks. One of the biggest pressure (on disclosure standrds) is coming trough from the banking community and venture capitalist – they need to be able to understand the accounts. What a good accountant, what a good SMP would do is to show SMEs how they can put these regulations into practice without costing a lot and that is not as burdensome.

Sunday Finance: What do you make of the argument that individual countries should have their own standards that its businesses could adapt to?

Gold: It’s interesting you say that because even the US, which has the US GAAP (Generally Accepted Accounting Principles) of course, is looking at the IFRS. Why? Because for international business you have to be able to understand a set of accounts through one set of standards. Again, I am going to go at the people who invest. If a country is going to get in with investments, international standards will have to be key. I think its more a case, not if a country wants it own standards, but can it afford to have its own standards.

Sunday Finance: In some circles, accounting is known as the “boring’ career. Why is it fun for you – or is it?

Gold: I love it. When I was about 15 and doing my O Levels in the UK, we had an economics teacher who was quite a successful businessman and had just come back to teaching late in life. He was passionate about business and in fact everybody who was doing commercial subjects with him got really passionate for business at that time. And that’s the passion of accounting. It is about business and business is at the heart of everything. The heart of business is about creating wealth, protecting that wealth and enhancing that wealth, and that’s what we as ACCA members deal with on a day to day basis.

PHOTO: Mark Gold

Gold… The ACCA is very passionate at ensuring that SMEs aren’t over-regulated, but the right regulations are applied to them. (Photo: Lionel Rookwood)