IFAC, The Pope and Good Governance by Lisa Weaver

by Heather Dandridge  06-Dec-2016 at 10:55

IFAC, The Pope and Good Governance by Lisa Weaver

The place of accountancy in a social context is often overlooked, as we place prominence on impressive financial results, growth in monetary values, and share price rises. Achievement of these aims sometimes comes with a social cost and is a result of business practices which lack integrity.

At the 2014 World Congress of Accountants in Rome, His Holiness Pope Francis reminded us of the broader responsibility of accountants, giving a speech(1) in which he urged accountants to act with integrity, acknowledging the social and economic importance of the profession. He commented:

"You professional accountants, in your activity, are alongside businesses but also families and individuals, to provide your economic and financial counsel. I encourage you always to act responsibly, fostering relations based on loyalty, justice and, where possible, fraternity, tackling with courage, above all, the problems of the weaker and the poorer."

Last week, Olivia Kirtley, President of the International Federation of Accountants (IFAC) wrote an open letter(2) to Pope Francis, in which she highlighted IFAC's commitment to strengthening governance. In particular, she referred to IFAC's Trust and Integrity - Call for Action(3), a paper which urges G-20 Leaders to "acknowledge that strong governance in the public and private sectors is at the heart of accomplishing the G-20 objectives of recovery, growth, and stability, as well as combatting fraud and corruption and restoring public trust and integrity." The paper further argues that strong financial management, transparency, accountability and enhanced governance are essential for sustainable, long-term economic growth that benefits the world's citizens.

Pope Francis probably understands issues relating to strong governance and anti-corruption only too well, having been elected in 2013 in the wake of a series of huge financial scandals at the Vatican, including alleged accounting irregularities, and accusations of widespread bribery, fraud and money laundering, which had caused the previous Pope to stand down. Shortly after his election, Pope Francis took measures to investigate these scandals, but the success of the investigations has been marred by further disgrace, whereby several of the committee members who were leading the investigation were themselves arrested for leaking confidential information to journalists.

The G-20 leaders may well agree with IFAC in that strong governance is essential in ensuring business is conducted with integrity and for the ultimate benefit of society. It is tough, however, to embed integrity and good governance in any organisation, given the pressures to achieve financial success. Even the Vatican is facing problems in this regard, finding huge resistance to the establishment of proper systems of financial governance, which IFAC's letter to Pope Francis probably brought into sharp focus.

(1) http://www.wcoa2014rome.com/media/Pope_Francis_Speech_EN.pdf
(2) http://www.ifac.org/global-knowledge-gateway/viewpoints/accountancy-profession-fighting-fraud-and-corruption
(3) http://www.ifac.org/system/files/publications/files/Trust-and-Integrity-2016-IFAC-G20-V10_Singles.pdf
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