A New Arab Association under the Umbrella of the Arab League 1/18/1993 

Description  , Alalam Alyoum

In a world abundant with harmful congregations that draw their strength on their unity and cohesion, and in light of the Arab awareness of the danger of this period that the whole world is witnessing, there has been a definite Arab desire to unify ranks and work diligently towards achieving the desired Arab hope of a “unified Arab conglomerate” that would be able to persevere, compete and actually invade external global markets. This conglomerate would be representative of a market that is strong with Arab material and human resources, with all that Arab lands contain as far as raw materials and metals are concerned.

In light of these dedicated efforts and those enormous resources, the accounting profession stands as definite evidence to the state of division and disunity, as the professionals are divided among two associations with one in Baghdad and the other being in Cairo. Neither of these reflects the unity of the accountants.

Related to this complicated subject, Alalam Alyoum met with the most prominent accounting personality at the Arab, regional and international levels –Mr. Talal Abu-Ghazaleh, Chairman of the Arab Society of Certified Accountants (ASCA), current Chairman of the U.N. Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, and the first Arab elected to the International Federation of Accountants (IFAC) board of directors.   

Abu-Ghazaleh: As in any country in the world, the progress and advancement of a profession requires the availability of certain elements. In regards to the accounting profession, I consider it one of the most crucial being practiced in this phase at the global level and in our Arab world in particular. In light of the current economic transformation taking place in numerous Arab countries of ours, and the adherence to market liberalization policies, making the market open before trade movement and the creation of various companies and Arab establishments working in all branches of the economic field, accounting as a vocation occupies an extremely significant and crucial place.

In its contemporary concept, accounting is considered a tool for issuing commercial and economic decisions by users of accounting statements and is no longer what it used to be before; merely a historical statement on the results of companies’ activities. Perhaps some of the most important elements that contribute to the development of the profession are the following:

-         Proper accounting education

-         A unique system for exams and qualification

-         Reliable accounting and auditing standards

-         Good organization of professional bodies

-         Legislation and appropriate monitoring apparatus to supervise adherence

Where are we in the Arab world as far as the availability of these elements?

 

Abu-Ghazaleh: The level of development in each of these elements varies greatly from one Arab country to the next. ASCA has conducted a field study that took three years and included all areas of the Arab world and it concluded the following:

First, the GCC countries (i.e. Gulf Cooperation Council) surpass the Arab level as far as the availability and development of “accounting education and training skills and accounting qualification” are concerned.

Second, Egypt is unique and excels in the field of “legislation and professional organization and quantitative availability for accountants and the variety of accounting material in education.”

Third, the Middle Eastern countries and particularly Jordan, are unique in the “foundational structure for accounting offices, the expansion of the base of expertise, the maturity of the economic foundation and strict governmental monitoring.”

Fourth, the countries of the Arab West or “Arab Maghreb” are considered to be in a phase of reformulating their accounting systems and bodies, and require a clarification of their vision as far as the direction they will take, due to these countries being affected by the French model which has changed in France itself. Afterwards, the importance of the change needing to take place in the Arab Maghreb countries comes into play.

What is the Arab position concerning the accounting profession in light of the new world order?  

 

Abu-Ghazaleh: My election as a member on the IFAC board of directors -the highest authority in the world when it comes to the accounting profession- indicates strongly that we possess an important international position and a profound effect that we must invest in intelligently to develop the vocational level in our Arab region. In an IFAC session, I have already presented an action plan since my election last October that includes ten points. Perhaps the most important of these is the suggestion of something similar to the “Marshall Plan”, to support educational programs and advance accounting skills in the developing world and our Arab region in particular. The purpose of this is to benefit from this in such a way that the profession is elevated under the IFAC umbrella.

Can you speak to us frankly on the negatives that form obstacles in the face of the profession’s development and consequently that of Arab accountants?

Abu-Ghazaleh: The negatives we are experiencing are those of any region that undergoes a phase of “growth and transformation”. I can summarize these as follows:

-         The non-existence of a common Arab governmental body that is concerned with coordination between Arab states on issues related to the vocation.

-         Non-clarity in the formation/structure, the objectives and specialization of societies and unions.

-         The painful division experienced by the General Federation of Arab Auditors and Accountants.

-         Deficiencies in accounting legislations and education to qualify certified accountants.

-         Non-adherence to accounting and auditing principles and insufficient monitoring for this adherence.

How shall we seek a united Arab conglomeration when we have two Arab federations with one in Baghdad and the other in Cairo?

 

Abu-Ghazaleh: I really don’t want to get into the details of these two federations that have been torn apart by disputes and consequently have become totally incapable to fulfill any important Arab role at this crucial time in our nation’s history.

Each federation in Baghdad and Cairo has its Secretary-General and secretariat, with each supported by certain nations.

Mr. Abu-Ghazaleh, don’t you have an Arab role and a national responsibility to resolve this issue, considering that you are the ASCA Chairman and due to your international prominence as well?

 

Abu-Ghazaleh: What is truly sad is that ASCA received the first criticisms and slander from the federation of Baghdad. What must not be forgotten is that ASCA, as the highest Arab educational body that specializes in all educational aspects and methods to advance the profession, is still fulfilling its task completely. ASCA has been able to qualify dozens of hundreds of Arab cadres at the highest international levels. ASCA also Arabized and issued international accounting and auditing standards, and held under its auspices numerous educational conferences the most recent of which will be the Third Arab Conference for Certified Accountants to be held in Bahrain under the patronage of Sheikh Khalifah Bin Salman and with the attendance of IFAC president, UN representatives and representatives from other international bodies. The society also issues the ‘Arab Accountancy magazine’ which has been released on a monthly basis for eight years in a row.

Therefore, ASCA fills a technical and educational gap in the field of professional accounting qualification in the Arab world at the best possible level in a really difficult time.

What is your honest assessment towards the multitude of organizational bodies in the profession and how this can result in problems that can complicate things further in our Arab world?

 

Abu-Ghazaleh: I think that the League of Arab States – as a body specialized in institutions of joint Arab activities and practices- can supervise the formation of a new Arab federation that will cancel the previous two. This new federation would have real legitimacy and would work as one of the organizations emanating from the Arab League, which would establish the foundations that guarantee its continuity and stability under the umbrella of Arab legitimacy. It would be created in such a way that its decisions are binding for all unions and national societies concerned with the accounting profession in the Arab world.

The existence of two Arab federations is painful and contradicts the honest Arab efforts that aim to create a “unified Arab market”.    

Doesn’t your project that you presented to the IFAC to create a regional society inclusive of all Arab unions under one conglomerate entitled “Arab Accounting Society Members of the IFAC” contradict your suggestion of establishing a new Arab federation under the umbrella of the Arab League?

 

Abu-Ghazaleh: Firstly, there is no technical or legal contradiction between the conglomerate that I intend to establish which will be inclusive of all Arab societies and unions, and the new Arab federation. The objective of the conglomerate would be to form an Arab force capable of exerting pressure in the IFAC in order to enforce its existence and Arab stance for the interest of the profession in our Arab region.

As ASCA Chairman, I will be presenting a detailed memo to the Arab League and its Secretary-General on the new proposed federation, such that neither myself nor ASCA will have anything to do with the suggested federation, because ASCA was and will remain an educational body that has no relation with unionized organizations or activities.

Can you give us numbers that reflect how many accountants there are in the Arab world?

 

Abu-Ghazaleh: In a field study conducted by ASCA that took a couple of years, it became apparent that there are half a million Arabs working in the field of accounting, whether they were working in governmental or private institutions, or in auditing offices. The percentage of these qualified to practice as certified accountants, which means practicing at the level of international professional exams did not exceed 1%; namely 5000 accountants.

We can compare this number with one country like the USA for example. About seven years ago, I attended the ceremony for the handing of the membership certificate for the half millionth certified public accountant in the American Accounting Association. The number of its members who have passed exams similar to those of ASCA are 750,000. Within the USA, the number qualified accountants there exceeds 25%. This means that the Arab percentage needs a 25-time duplication of efforts to reach the American average.