Knowledge-based Economy: A View into the Next Millennium

Knowledge-based Economy: A View into the Next Millennium Alan ANDERSON • Senior Vice-President, • Member and Public Interests, • American Institute of Certified Public • Accountants (AICPA) • United States

Knowledge Based EconomyA View Into the Next Millennium Alan W. Anderson Sr. Vice President -AICPA

Foundation for the Future • Must work to protect the public interest under the current reporting models • Must work to develop approaches and programs to respond to demands for assurance under “New Economic” models

Periodic Historical Cost-basis Financial Statements Reliable Systems Method of Information Dissemination Financial and Non financial Measures Corporate Accountability Understandable Disclosures Building Upon Our Foundation

Why? • The current reporting model is no longer sufficient. • Not timely – its after the fact news. • Not informative enough. • Ignores many factors of performance. • So far, calls for change and some action. • Now it’s time for coordinated action.

Coordination is Needed • Many reporting efforts are ad-hoc and not always comparable between companies. • Current ideas are progressing, but slowly. • Competition between ideas will hold each other back while the market waits for a leader. • Need a way to create to allow ideas to work together.

Blueprint for the Future • A new reporting model alone is not enough: • Is based on Internet time, • Is reported first on the Internet, and • Provides forward-looking information. • The Profession must prepare for the convergence • Corporate Readiness and CPA Firm Readiness

Real Time Reporting Current Model is the Foundation

Real Time Reporting Project: Trust Family – Systrust

Real Time Reporting Project: Performance View VMRC

Real Time Reporting Project: XBRL

Real Time Reporting Project: FASB Projects SEC Plain English Goals VMRC XBRL

Real Time Reporting Project: COSO ERM Project New Fraud Efforts Audit Committee Rules Audits of Codes of Ethics Trust Family ( Privacy) Environmental Reporting

Real Time Reporting Current Model is the Foundation

IIN MISSION IIN- Mission • Global Leadership Role in: • Thought Leadership • New Product Development • Benefiting the Global Profession • A Vehicle for: • Effective and Efficient Collaboration • Deployment of new products to National Institutes Members

Why Set up IIN? • The Business Case • Facilitates the Rollout of New Services Globally • Eliminates the need to negotiate: • A New Agreement • For Each New Service • For Each New Country • New Services – Member Choice

IIN - History • Started IASN in 1999 • Initial meetings Focused on Webtrust • Discussed IFAC interest deploying new services to member bodies in July 2000 • IIN concept created January 2001 • Agreement in concept reached October 2001 • Formal Adoption of IIN in July 2002

VMRC • Value Measurement and Reporting Collaborative • A collaborative with accounting profession and information users to create a framework for better reporting.

VMRC • Goals: • Identify best practices. • Debate existing concepts. • Test existing and new concepts. • Modify concepts, as necessary. • Develop framework to allow for comparability between: • Organizations. • Within Industries

VMRC • Create: • Comparability • Consistency • Transparency • Principles/Criteria

VMRC Benefits • For the accounting profession: • Take the lead (our logical role) • Make sure the models protect the public. • The accounting profession as an innovator. • New students

Knowledge-based Economy: A View into the Next Millennium