ICAJ NEWS

IFRS Are Critical To The Economic Development Of Jamaica

The devastating social and economic effects of recent international financial crises and corporate mismanagement have intensified efforts towards the reform of market systems.

According to IDB Country Representative, Mr. Keith Evans, the reform of market systems worldwide has focused attention on the use of international accounting and auditing standards and the regulatory environment in which they are being used. Mr. Evans was speaking at a recent cocktail reception at the Hilton Kingston Hotel to launch a Technical Cooperation Project between the Institute of Chartered Accountants of Jamaica (ICAJ) and the Inter-American Development Bank (IDB).]

"These standards are an indispensable element in the measures designed to enhance transparency in the private sector in order to improve the investment climate and foster market efficiencies. As such, international accounting and auditing standards are becoming essential planks in the construction of economic development strategies throughout the region," Mr Evans noted.

He described the move by the ICAJ to adopt international accounting and auditing standards as being timely and critical to enhancing the usefulness of annual financial statements of local businesses and improving Jamaica's financial reporting structure. The move, he added, was also a model for the member countries of CARICOM, as they forge ahead with efforts to create a CARICOM Single Market and Economy (CSME) and a Regional Stock Exchange, to which end, adherence to internationally recognised standards in accounting and auditing are vital elements.

The Technical Project was proposed by the ICAJ as part of its efforts to improve the enforcement and compliance framework of the local Accountancy profession. The Board of Directors of the Inter-American Development Bank, through its Multilateral Investment Fund, approved grant funding to support the implementation of the project and a Technical Cooperation Agreement signed between the ICAJ and the IDB.

In outlining details of the Project, ICAJ President, Mr Linroy Marshall explained that the Project was intended to strengthen the regulatory framework of the accountancy profession and will assist accountants and businesses to effectively apply International Financial Reporting Standards (IFRS), thereby ensuring greater transparency and credibility in the financial statements of listed companies.

The transition from national standards to IFRS and International Standards on Auditing (ISA) arose from the ICAJ's decision to adopt these standards as Jamaica's national accounting and auditing standards, effective for accounting periods beginning on or after July 1, 2002. This move, according to Mr Marshall, was consistent with the trend towards the global harmonisation of accounting and auditing standards.

"Today, the world's capital markets have no borders, and participants in these markets are demanding high quality, transparent, and comparable financial information to enable them to make sound economic and investment decisions," Mr Marshall noted.

He added that a number of countries, including some of Jamaica's trading partners, have adopted or was in process of adopting these standards and so it was imperative that Jamaica implement international accounting and auditing standards to remain an active participant in the global capital market. The three-year Project will be executed by the ICAJ at a cost of US$1.015 million. The components of the project to be implemented include assisting stakeholders in the private and public sectors to apply international accounting and auditing standards. Efforts will be made to strengthen the capacity of the ICAJ to build adequate mechanisms for compliance with IFRS and ISA and establish systems and processes to ensure the sustainability of the programme.

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