G20 Summit Analysis

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June 5, 2012 The Group of Twenty C/O Ambassador Patricia Espinosa Cantellano Secretary of Foreign Affairs Ministry of Foreign Affairs Ave. Juárez #20 Col. Centro, Cuauhtémoc, México, D.F., 06010 Mexico By e-mail: pespinosa@sre.gob.mx GLOBAL SUSTAINABILITY AND GROWTH RECOMMENDATIONS FOR THE G-20 LEADERS’ SUMMIT – JUNE 18-19, 2012 Dear Ambassador Patricia Espinosa Cantellano: The International Federation of Accountants (IFAC) is pleased to present the following recommendations for consideration at the G-20 Leaders’ Summit on June 18-19, 2012 in Los Cabos, Mexico. These recommendations focus on actions aimed at promoting global sustainability and growth, and are directed towards several of the stated priorities of the Mexican presidency of the G-20. This letter follows previous submissions to the G-20 in 2009, 2010, and 2011, and a letter submitted earlier this year. The first letter for 2012 was addressed to G-20 Deputies and Finance Ministers and focused solely on public sector financial management, transparency, and accountability (www.ifac.org/publications-resources/ifac-makes-recommendations-g-20). This current submission is addressed to G-20 Leaders, and as noted earlier, focuses on global sustainability and growth. Priorities of the Mexican Presidency of the G-20 In developing and presenting recommendations pertaining to global sustainability and growth, IFAC is providing matters for consideration that are relevant to the stated priorities of the Mexican Presidency of the G-20. In particular, IFAC believes that the following recommendations, if adopted, will contribute to: (i) achieving economic stabilization and structural reforms as foundations for growth and employment; (ii) strengthening the financial system and fostering financial inclusion to promote economic growth; (iii) improving the international financial architecture in an interconnected world; and (iv) promoting sustainable development, green growth and the fight against climate change. As a profession that has its foundation in a range of measurement, reporting, analysis, advisory, and assurance techniques, of information that is both financial and non-financial, the accountancy profession is well placed to provide solutions—and assist in finding solutions—to many of the current problems being confronted by the global community. The skills and expertise of the accountancy profession are critical to

advancing economic stability, strengthening financial systems and architecture, and promoting long term sustainability and growth. With this in mind, IFAC makes the following recommendations. Global solutions to global problems Recommendation 1 IFAC recommends the adoption and implementation of:   International Financial Reporting Standards (IFRS); International Standards on Auditing (ISAs); and Auditor independence requirements set out in the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (IESBA); across all jurisdictions.



Recommendation 2

IFAC recommends that the G-20 works to support strengthened resourcing and governance arrangements of international regulatory organizations (including standard-setters) that have clearly defined expectations and responsibilities.

The problems highlighted by the global financial crisis demonstrate the inter-connectedness of the global economy, and the systemic risks that are present when there is a lack of high-quality, coordinated approaches to regulation. Inconsistent and poor quality—“non-converged”—regulation of key global industries and sectors provides opportunities for regulatory arbitrage and heightens the potential that global risks will not be appropriately identified and addressed. In turn, this can impede the attainment of global growth, and long term sustainability. With this in mind, IFAC considers it critical that the G-20 continue its momentum and ambition for regulatory reform and convergence that has been developed over the...
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