Tuesday 23 February 2016
As the remnants of storms Henry and Gertrude pass over the UK zone of IFRS Land, it's not too surprising to see a rise in holiday bookings to warmer climes. The mid-term school vacations will soon be with us and with it a chance to escape the wind and the rain. So, as I prepare for a trip to the Middle East I won't be too surprised to hear, yet again, the retort of "not another holiday in Dubai".
Well, actually no, not another holiday; in fact, as with about 95% of my recent journeys across that region this will be a training assignment; after-all, whether it be Dubai, Abu-Dhabi, Oman, Jordan, Saudi and beyond, these are tremendous lands of tremendous learners. And, with the business press excitedly reporting that Iran is now firmly 'open for business' could it be that this great cultural land might soon be an addition to that list?
It's all seemingly happened so very quickly. Multi billion dollar deals for new airliners, cars, telecoms, etc. etc. have already been signed between Iran and the west. "They have everything" has been one quote, suggesting that the doors of a new $50 billion sweet shop have seamlessly opened. Oh, how it all looks so easy.
My (accounting) response to this excitement; well, hold on a minute, maybe Iran doesn't have everything, at least not just yet. For one, does it have good Corporate Governance? As we've reported before in these pages, one link in the chain so often missing as countries develop new frameworks is the big governance issue.
It could well be that the signing of the deals was the easy part. As the Financial Times reported, this is "a business environment marked by scarce data, tax evasion, out-dated accounting practices, corruption…..". This of course is not a criticism. It's a comment on the reality of situations we've come across many times, for history suggests that long term development and sustainability can not really survive without having in place the foundations of strong and secure controls, processes, and behaviours. As with the signing of those big money deals that of course does not happen overnight; fact.
Does IFRS play a part in this? I would say so. Whilst one could argue that the list of countries now permitting or requiring IFRS certainly doesn't guarantee an environment free from bad practice, the use of a globally accepted and quality norm must surely help in encouraging a permanent shift to 'the good'. The IASB's list of adopters currently does not include Iran, yet the push for IFRS will no doubt now increase. And of course the same applies for IPSAS for the government and non-profit sectors.
So, for Iran, for businesses trading with Iran, and for all countries developing their corporate governance practices, maybe the following resume is true.
"The forecast is looking very bright, albeit with some stormy conditions expected in the short and medium term, but clearing".
Wherever you are this weekend, enjoy your time and stay warm.
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