Second World Accounting Summit in Middle East to address local implementation of IFRS

That is the verdict of financial specialists attending the next World Accounting Summit in Dubai next month.

The five-day meet will bring together more than 300 leading international and local accounting experts, regulators and standard setters at Al Murooj Rotana Hotel, Dubai from May 27-31. The main debating topic will be the successful regional implementation of the global standard for accounting and reporting, IFRS.

The region's rapidly increasing market capitalisation, fuelled by a growing band of new listed companies, is increasing the pressure on local business to enhance financial disclosure. But a clearer legal framework is needed, the experts say, to mandate full transparency and outline the rules of enforcement.

Abbas Ali Mirza, managing partner of Deloitte Middle East and author of a new book on IFRS, said: "There has been substantial progress on IFRS in the last two years. The European Union adopted IFRS for listed companies in 2005, and Australia has applied the rules across the board. UAE banks have adopted IFRS as best practice along with large Middle East companies such as Etisalat, and Saud Bahwan Group of Oman."

Mirza added: "Legislation will enforce standards for all, including for the majority of the Middle East business community which is not currently listed. But genuine implementation issues with IFRS exist in the Middle East, and they need to be brought to the attention of international standards setters."

World Accounting Summit organisers IIR say this year's gathering in May is a valuable opportunity to address the grey areas of IFRS implementation, and make the case for the representation of emerging markets on the board responsible for the IFRS framework.

Shabnam Rawal, Group Director for Conferences and Training of summit organiser IIR Middle East, said:

"IFRS accounting practice allows profits to be calculated based on the fair value of shares and investments as opposed to bottom line results. But do regional stock markets, which are smaller and less active than their international counterparts, produce an accurate indication of profitability?"

Rawal added: "IFRS sets strict standards for the disclosure of transactions by related parties, but what constitutes fair and appropriate disclosure in the Middle East, which is socially and culturally very different to the West? These questions will be addressed at the World Accounting Summit in May."

Taking place from May 27-31, the World Accounting Summit welcomes a wide selection of industry speakers including Robert Garnett, Chairman of IFRIC and Board Member of IASB in the UK; and Richard Martin, Head of Financial Reporting at The Association of Chartered Certified Accountants (ACCA).

Dr. Habib Al Mulla, Chairman of the Dubai Financial Services Authority (DFSA); and Dr. Ahmed Bin Abdula Al-Moghames, Secretary General of the Saudi Organisation for Certified Public Accounts, will also address delegates.

Despite the challenges, convergence on accounting procedure for the Middle East is increasingly a matter of when not if. Currently in the draft stage, the UAE Company Law is expected to enshrine IFRS, and regional legislators are following suit.

Deloitte's Abbas said: "At more than US$1 trillion, the market capitalisation of the region represents three per cent of the world total, and around 100 regional IPOs are in the pipeline. The heightened activity of regional stock exchanges demands a better quality of accounting and reporting in order to avoid the mistakes of Western markets. But the reporting of non-listed companies is equally important, and both legislation and voluntary best practice are needed to raise standards across the board."