Interview: Olivia Kirtley, IFAC President
Olivia Kirtley talks to Robert Outram about her role as President of IFAC, the accountancy body that strives for the highest standards of reporting, ethics and education worldwide.
Olivia Kirtley's stint as President of the International Federation of Accountants (IFAC), the worldwide organisation for the accountancy profession, began in November 2014, following two years as deputy president.
A native of Kentucky in the southern US, she says she has a love of travel, which is just as well. IFAC has more than 175 members and associates in 130 countries and jurisdictions, which means that in her two-year term, Kirtley will have clocked up quite a few air miles.
IFAC represents around 2.5 million accountants, including the membership of ICAS, but many may not be fully aware of its role in helping to promote the profession, and good professional practice, around the world.
Olivia explains: "IFAC is a global body and first of all, we try to act in the public interest. We're made up of our member bodies... they expect us to be the global voice. We don't want to be in competition with the member bodies, we want to be complementary to them."
She adds: "Different parts of the world will have different views on issues where there might be national interests at stake, but the foundation of IFAC is our commitment to high-quality financial reporting, high-quality ethical standards and behaviour, and high-quality education. On those things we have a common voice and a global voice.
"I have found during my presidency that IFAC can open doors for the national bodies sometimes, when your home country's government doesn't necessarily hear your voice quite the same as it might hear a global voice."
A strong standard setting model
IFAC doesn't set international financial reporting standards, but it facilitates the setting of reporting standards for governments by the International Public Sector Accounting Standards Board, and auditing standards by the International Auditing and Assurance Standards Board.
IFAC also supports the International Ethics Standards Board for Accountants, the body setting worldwide ethical standards for the accountancy profession.
Olivia says: "Many people don't fully understand how strong our model [for standard setting] is and how well it works; and that it's independent from all parties.
"We are always interested in continuous improvement where it can be made, but we do have a model that works extremely well. We have global representation, we have representation from practitioners and non-practitioners, and we have robust processes as regards setting the strategy and going out for public consultation."
'The core of good governance'
Of course, as she points out, setting standards is only half the battle. Arguably the hardest part is ensuring that they are adhered to. One of the biggest challenges is persuading national governments – used to setting their own rules – to follow international standards for financial reporting.
She says: "There is a lot of momentum in that direction right now. There are some great examples of why it is in the best interest of governments to adopt international standards, because unless you have all the information you need, you are not going to make the best decisions, for this generation and the next."
New Zealand, which was an early adopter of International Public Sector Accounting Standards, weathered the global financial crisis better than most, and there is a willingness to adopt international standards in developing world countries like Morocco and Kenya. As she puts it: "Accounting is at the core of good governance."
If you are going to make progress in building a stronger economy and fighting poverty, you have to have a strong accounting profession
Growing the accountancy profession
Harmonisation for its own sake is not the priority of IFAC, however. For Olivia Kirtley, one of the most important aspects of the IFAC mission is 'capacity-building'; bringing the profession up, in all regions and nations, to the level of the best. She calls this "game-changing " and points out that this makes the greatest difference in those parts of the world where the professional infrastructure is weak or non-existent.
"In Africa, three-quarters of the continent's accountants are located in just two countries: South Africa and Nigeria. Around the world, many countries do not have the structures in place for a strong accountancy profession or the number of qualified accountants that they need.
"If you are going to make progress in building a stronger economy and fighting poverty, you have to have a strong accounting profession; and you have to build the capacity to have qualified accountants working in the government."
Creating opportunities for women in finance
As someone who started out at a time when there were still few women in the accountancy profession, Olivia is particularly interested in how barriers of culture and perception can be overcome to create more opportunities for women in finance, worldwide.
She recalls meeting with women from across Africa at the Mauritius conference, "We were talking about how we could combine our success stories and our knowledge to provide solutions for other women to be able to move forward.
"One of the obligations of being a leader is to help others to reach their maximum potential and to encourage them, and give them the tools and the resources and the mentoring that they need to do that."
"Being IFAC President is a big commitment in terms of time, but the rewards are greater than the commitment – they always have been. The rewards are the people I meet, the ideas I hear, the insights I have become aware of and the contacts I have made... it's great to sit around a table with all those smart people and benefit from their experience.
"We often know what needs to be done but not the how, and the people you meet are the best resource for answering that."
Olivia Kirtley started out as a CPA with Ernst & Ernst – the firm that eventually became EY – and spent the first decade of her career in professional practice, before moving into industry.
She was CFO of power tool manufacturer Vermont American, a US-based business with an international reach.
Olivia says this has helped in her international role: "I'd been involved in buying businesses in China, France and Germany... and going into China was a lot more challenging, then, than it is now."
She also feels, however, that it's not just her business experience that has helped her to work with people of very different cultures and backgrounds: "I grew up in a rural background, a working, farming community, so I can relate to people on many different levels."
Olivia's involvement with the wider profession began at national level, with senior roles in the American Institute of Certified Professional Accountants (AICPA). She was elected as the first female chair of the AICPA's board of directors in 1998, and she was chair of the AICPA board of examiners between 2000 and 2003, where she led the computerisation of the US CPA examinations.
In 2002 and 2003 she also served on the independent IFAC Task Force on Rebuilding Public Confidence in Financial Reporting, following the Enron and WorldCom scandals. That led to her involvement in the IFAC board and ultimately her current role as president.