2nd ANNUAL CONFERENCE ATHENS, 22 -23 APRIL 2002

1. 2nd ANNUAL CONFERENCE ATHENS, 22 -23 APRIL 2002

2. Mr. Francesco Serao PRESIDENT, FCM

3. Dear Ladies and Gentlemen, authorities representatives of the Member Institutes, colleagues and friends; I am most honoured to address you and our most respectable guests, in my capacity as the new President of this Federation, here in Athens today. My intention, in this brief speech, is to share with you my thoughts and feelings on the future steps of our Federation.

4. First of all I would like to pay homage to my predecessor, Mr. Hasem Hassan, whose wisdom and ability made the creation of this Federation possible. He is a remarkable President but also a remarkable person and on behalf of the Federation I am honoured to offer you this plate.Our countries form together a defined region; we share common business patterns and common professional needs.

5. The main reason for setting the Federation was to provide a regional answer to the international challenges, which our profession is facing. Let me stress out that our common mission is not only to provide our views on international developments and their impact on our profession but to be an integral part of this international the process and play an active role in shaping the international context.

6. The first step is that of being able to work together and express, where possible, a common view on international developments. I would say that this first step has been fully achieved by this Federation in its first two years through the guidance of my predecessor.

7. Now, the future task is to achieve the second stage, and play an active role in proposing, shaping and participating at the standard setting process. Being actors and not only spectators, this should be our motto when questioning ourselves on an international stall level.

8. The field of professional services follows the same market rules, with regard to the central importance of innovations, highlighted by economists as Schumpeter and Solow, and worth for the primary and secondary sectors of the economy. Indeed, we have to concentrate on searching the added value that innovation of product or process can benefit our profession, as individuals and as a community.

9. I believe that our Federation has to addressed its efforts on three different levels: the first one is the level of the single professional, where we have to provide the innovative intellectual means for his best professional education.

10. The development of professional standards, in the accounting, the auditing and the ethics area would allow our members to provide professional services at the highest level, and be recognised by the market as its natural interlocutor.

11. The second level, where we have to propose an innovative approach, is the institutional level. I truly believe that the FCM can operate not only for the benefit of the individuals but also for the benefit of its member bodies

12. The exchange of institutional experience, as to the organisation and functioning of technical committees, as well as the expression of institutional positions on debated issues, will ultimately benefit all our institutes. The Federation has established four technical committees through which it will operate and consolidate its opinion on issues which are of international and global interest.

13. Finally, there is a third level of innovation, which I consider of prior importance and particular. The Federation itself, as an associated structure, can in fact pose itself with an innovative approach in comparison to the more traditional approach of the existing international organisations. Our Federation should link and create a direct dialogue with students and trainees.

14. We have to enhance the image and the opportunities that potential future professional shall associate with our profession. We can dialogue directly with universities in the Mediterranean region and develop joint projects for the benefit of the trainee students and the research community.

15. The exercise of our profession is a sum of different components. Figures, schemes regulations and decrees are single components of a system, which must be integrated with abilities and strategic view. Our profession is based on the capacity of analysis and synthesis, on the ability to innovate the professional service with each new client. I would like to highlight and invite you all to consider as the following developments as the basis for the forthcoming activity of our Federation:

16. following the dramatic consequences of the ENRON case, at a global level, our countries have to provide their best efforts to define a common position on Independence issues through the Ethics committee. The amendments to the IFAC code on the independence section have been recently approved and the Committee on Auditing of the European Commission is finalising its recommendation. Therefore, the issue of auditor’s independence is relevant and urgent, and has to be dealt with at a common level;

17. in the accounting area we assisted to the significant structural change of the IASC (International Accounting Standard Committees), reshaped into IASB (International Accounting Standard Board) and which has now acquired its autonomous institutional role. At a European level, the decision to introduce IASs as mandatory accounting standards for all listed companies, starting 2005, and the related recognition of the IASB as the international standard setter is a significant development which has to be considered by this Federation;

18. different countries in the Mediterranean are already considering IASs and their impact on national standards. This led the FEE (Fédération des Experts Comptable Europeens) to propose the EFRAG/European Financial Reporting Advisory Group) which provides for a system of disclosure and enforcement of IASs at a European level and the basic study of the differences between the International and the national standards;

19. the relevance of SMEs at a global and the significant level of economic transactions which are headed through SMEs led also the United Nations, through the ISAR (International Standards on Accounting and Reporting) Group, to propose a structure for the accounting rules for SMEs. The proposal is based on a three level disclosure system, according to the dimension of the enterprise. The project is officially approved and of course will be compared with the similar project of the IASB itself for SMEs;

20. in the auditing field we assist to a similar development for the ISAs (International Standards on Auditing), since the end of last year. The IAASB – International Auditing and Assurance Standards Board will be the new entity, recognised at international level, for developing auditing and assurance standards;

21. the IFAC itself as an organisation has proposed to set its agenda in accordance with a strategic plan which redefines the role of IFAC as the International organisation that represents our profession – in public, industry, commerce and in government;

22. a special attention is now paid to SMPs (Small and Medium Practices) needs, which were identified by a past IFAC task force and now dealt with through a dedicated IFAC working group, formally approved in November 2001. I am sure that we all share the same feeling of how difficult it is to capture the nature of our professional services and communicate it to the market.

23. We are localised in a certain country, but then our needs are common, as a growing part of our professional practice become global and internationalised in content. It is therefore of prior importance for this Federation to address the needs of SMPs. We must support any scientific effort to analyse and well understand the environment in which SMPs operate.

24. In the educational field, the emphasis on promoting global designations and international mutual recognition of professional qualifications. The difficulties in exercising the accountancy and auditing profession in a globalised market can be overcome through international agreements between the Institutes themselves, through self-regulation, in advance of any legal development. The market needs a very wide scope of consultancy service.

25. The traditional auditing, taxation and accounting services, strongly related to local regulation, are now to be integrated by other knowledge - legal, economic and technological - necessary for providing clients and businesses with the best global consultancy services;

26. finally, I would like to mention another international initiative known as IIN (International Innovation Network), which should enable our professions to share projects and products resulting from the most advanced technological efforts.As a Federation our mission can be fully achieved with a common effort and that we have now the tools and the determination to go on the same path.

27. The Mediterranean Federation of Accountants is keen to provide its point of view and to stimulate the international debate at the highest levels, in line with the objectives of FCM and the other major regional organisations.Thank you all, again, for being supportive and sharing the way forward with me.