Preparing for October's XIV World Congress of Accountants.

Bertil Edlund of Sweden, president of the International Federation of Accountants (IFAC), has a ready answer when asked why American CPAs should attend the World Congress of Accountants to be held in Washington, D.C., on October 14-18, 1992: "Because it's being held at the right time and in the right place and it has the right program." In a recent Journal interview, Edlund said, "Since the 1987 World Congress in Tokyo, the Berlin Wall has fallen, Eastern Europe and Russia itself are moving toward market economies, the European Community has become a reality and Pacific Basin countries have enjoyed unprecedented growth. The flow of capital over borders has become much larger in the last five years and is still growing rapidly. Sooner or later, the global economy will affect every accountant in the world. It is surely time for another World Congress of Accountants."

He added, "This World Congress will address a wide area of topics associated with globalization, and not just accounting issues. We will cover problems and opportunities in international capital markets, international communications techniques, developments in Europe and developments in Asia, as well as progress on the harmonization of international financial reporting standards. Thus, we have the right program. Also, the congress is being held in an American city that is a delight to visit and where CPAs in the United States can attend at moderate cost and minimum disruption to their jobs and practices."

Peter Agars, IFAC's incoming president and an Australian, is equally enthusiastic. To him the World Congress is "the best-value experience accountants will be able to get for the next five years." In addition, "It's a very important time for the future of the profession. At the congress, Bertil Edlund will present the results of the strategic planning process IFAC has undertaken over the past two years. The strategic plan that has just been completed calls for some very significant shifts in direction for accountants throughout the world and the structure of their firms, their companies and their practices. This will be a rare opportunity for American accountants to focus on what other parts of the world are doing and to exchange experiences with their international colleagues."

The upcoming congress's success will be measured against the goals set for it by its sponsor, IFAC, and its hosts, the American Institute of CPAs, the Institute of Management Accountants and the Institute of Internal Auditors. They are striving to create an atmosphere of cooperation equaling that established at the first two international gatherings of accountants held in the United States.

THE FIRST INTERNATIONAL

CONGRESS: A MANDATE

FOR UNIFORMITY

The first International Congress of Public Accountants was held in Saint Louis, Missouri, on the grounds of the Saint Louis Exposition. The congress opened on September 26, 1904, had 83 registrants and ran for three days. Attendance was high, considering the proportions of registrants to the total membership--340--of the two major organizations for accountants at that time. The Financial Record's coverage of the event mentioned that the accountant's gathering "eclipsed" the Bar Association annual meeting, which was held at the same time.

Although the congress was billed as an international event, only about 10 representatives of societies in England, Scotland and Canada attended. In addition, E. Van Dien from Amsterdam, Holland, was present as a guest of the congress and addressed it on the third day. However, he was not registered as an official representative of his society because of what the Record calls an "oversight."

In his opening remarks, Congress Chairman Joseph Edmund Sterrett, CPA, president of the Pennsylvania Institute of CPAs, referred to a problem still plaguing CPAs today when he said, "The public accountant as a sort of detective, whose chief service is to show how a thief tapped the till, is a conception of our worth that is altogether inadequate. It is true that trusted officials and employees at times betray confidence reposed in them, and that when such occasions arise it is a part of our duty to turn a searchlight upon their nefarious conduct. Such cases, however, form but a small part of our activities. Prevention is better than cure, and the public accountant serves a larger purpose in the keen, penetrating tests and proofs to which he submits the books and accounts submitted to him for audit.

"It is one of the chief functions of the public accountant so to marshall the accounts they they will set forth the facts esential to the proper management of a given enterprise, and this is a form easily understood and with such promptness that the information is current with the transactions described. Business administration cannot, for any length of time, achieve its best result unless supported by accurate detailed and constant knowledge of condition as to assets, liabilities, cost, expenses and income. This knowledge is obtainable only by the maintenance of a properly devised accounting system."

The primary topic of the 1904 congress was the uniformity of accountancy laws. The movement for a CPA designation was just picking up stream, with many states still lacking the necessary legislation. One of the goals of the congress was to give a boost to the movement toward uniformity. A Record editorial on the congress closing commented on the success of the gathering. It said, in part:

"To say that the Congress marks a distinct advance toward a united profession of accountancy in the United States is not to overrate its influence. The one fact standing out in clear relief beyond and above all its deliberations and suggestions is the imperative need for unity of purpose and effort among all American accountants, and for a uniform standard of professional qualification and accountancy practice in every state in the union.

"The convocation in Saint Louis of representative accountants from everywhere has served, as is clear upon the face of the record, to sink more than one matter of individual preference or fancied personal interest in the saner and more advanced thought of the world view or the safer and more permanent standpoint of professional advantage and advancement."

THE EIGHTH INTERNATIONAL

CONGRESS: WIDENING

ACCOUNTING HORIZONS

The Eighth International Congress of Accountants was held in New York City on September 23-27, 1962. It was a truly international affair. A total of 83 accounting organizations from 48 countries sent 3,728 delegates, making it by far the largest meeting of professional accountants held until that time.

President John F. Kennedy sent an opening message: "Your Congress, meeting at the invitation of the American Institute of CPAs, offers an excellent opportunity for the exchange of information and ideas. As we gain confidence in each other's policies of economic disclosure, accounting can indeed become an international language of business. As a result, capital will flow more freely and the international exchange of goods and services will increase more rapidly. Many of the problems with which you will concern yourselves during your meeting will, I am sure, bear directly on the ability of all of us to strengthen the spirit of international economic confidence."

In a similar vein, John L. Carey, then executive director of the AICPA, said in his column in the March 1961 issue of the membership newsletter, the CPA, "It is hoped that the meetings will strengthen the foundation for the vast extension of international accounting practice which thoughtful observers believe will result in international investment and trade over the next few years. Many professional arrangements between CPAs of the United States and colleagues in other countries are likely to have their inception at the New York meetings."

Frederic G. Donner, chairman and chief executive officer of General Motors, was one of the principal speakers also calling for the internationalization of the accounting profession. He said, "Accounting must become more nearly an international language. This congress and its predecessors have provided a forum for discussing accounting principals and practices, as well as differences in auditing standards. I am sure that we all share the hope that out of these discussions will come the improved understanding that is fundamental to the advancement of international commercial relations."

Arthur K. Watson, chairman of IBM World Taste Corporation, added his voice to those expressing a need for accountants to become involved in international trade. Watson observed, "Capital skillfully managed reaps more than profits for its owner. It can, and must, flow through the world to provide training in nations where few have had the opportunity to learn. It can, and must, bring needed services where they haven't existed before. You ladies and gentlemen understand the tools of measuring capital. Your influence grows as world affairs grow more complicated. I think this is healthy. I think the world needs your tradition of objectivity, of rational evaluation and your sterm ethical code. The measuring tools for capital are in strong hands."

The Eighth International Congress of Accountants was a distinct success; it set the wheels in motion to move toward international accounting and auditing standards, issues that now rest in the hands of organizations such as IFAC and the International Accounting Standards Committee.

THE XIV WORLD CONGRESS:

ACCOUNTANTS IN A

GLOBAL ECONOMY

The emergence of a global economy has implications for all accountants, according to Edlund and Agars. Agars believes "many CPAs have not yet prepared themselves for the inevitable impact on their clients and their business." However, he said, "the trend toward globalization is bound to affect them and their clients in the next few years. That is why our program is so important. It will alert and update accountants on these developments and prepare them for the changes that will take place."

Edlund and Agars agree that complete standardization of international accounting practices may not be possible because of the desire for individual countries to preserve sovereignty. However, they strongly believe further harmonization of international accounting standards is possible. This is particularly true in light of heightened demand for funds in international capital markets, where comparability is most important.

Edlund believes accountants familiar with the global market have an important role to play in helping Eastern European countries convert to market economies. "Accounting has been a success story over the last few years because accountants react to market needs. There is a need for both management accountants and auditors in these countries. They are looking for advice and help in establishing training and education programs."

Agars looks for "far greater accountability" in international capital markets as competition for available capital intensifies between developing nations, Eastern European nations and aid programs. "Accountants have always been an important part of the accountability process," he said, "and I can see the role of the accountant only becoming even more important in the next several years."

A CHANCE TO HAVE FUN, TOO

The World Congress will be complemented by an accounting business show, featuring hardware and software exhibits from major vendors to the profession. In addition, a number of social events are planned. A half-day tour of Washington, D.C., is scheduled for participants and their guests. A reception following the opening session will be held in one of Washington's most spectacular sites. An evening of cultural entertainment will be provided, and special indepth tours will be available for persons accompanying congress participants.

Gene R. Barrett is a news editor of the Journal.

Mr. Barrett is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.