RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/316 
7 June 2010 
 (10-3109) 
Council for Trade in Services  
  
 
ACCOUNTANCY SERVICES 
 
Background Note by the Secretariat
1 
  I. INTRODUCTION 
1. This Note has been prepared at the request of  the Council for Trade in Services, with a view 
to stimulating discussions in the Council on accountancy services.  It provides background information, and updates a previous Note on trade in accountancy services (S/C/W/73, dated 4 December 1998).  This Note focuses on  developments and  issues considered to be most relevant to 
the GATS;  it is not intended to provid e a comprehensive account of the sector.
2   
2. Since the previous Note, significant events have occurred involving the accountancy sector, 
including adoption by the WTO Counc il for Trade in Services of the Disciplines on Domestic 
Regulation in the Accountancy Sector  on 14 December 1998;  the Enron collapse, which resulted in 
the demise of one of the former "Big Five" accoun ting entities;  the Asian financial crisis and the 
World Bank/IMF Reports on the Observance of Sta ndards and Codes (ROSC) initiative;  and the 
international attention that regulatory issues have  received in connection with the current global 
economic and financial crisis.3 
3. As highlighted in the previous version of this  paper, accountancy is an essential input in the 
production of both physical goods and other services.  Perhaps most important is accountancy's role in 
respect to the implementation and enforcement of prudential requirements and other financial 
regulatory measures.  Despite the extensive interna tional networks of the biggest firms, geographic 
markets for accountancy are still considered to be national, or even sub-national, due to pervasive 
entry and conduct regulation that varies significantly between regulatory jurisdictions.4  
Consequently, the structures of the remaining "B ig 4" accountancy firms, unlike most of their 
multinational clients, more closely resembles those of franchising networks. 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. 
2 It should also be mentioned that the asymmetrical availability of sources of information across 
regions can well be observed in the Note. 
3 In addition, there has been a further shift in the governance of  international accounting standard-
setting, including the emergence of independent external oversight bodies, while the international audit firm networks have further evolved their business models and structures.  With respect to the current financial crisis, 
accountancy practices have largely not been blamed, but substantial change s have nonetheless been envisioned 
as a part of dealing with the crisis.  See also  section IV of WTO document  S/FIN/W/73, 3 February 2010, for a 
discussion of the financial crisis. 
4 As observed by the previous Note (para 3), "P erhaps the most significant issue in respect to 
international trade in accountancy services is the wi despread nature of local qualification and licensing 
requirements, both in regard to individual practitioners and as conditions for the ownership and management of 
firms." S/C/W/316 
Page 2  
 
  II. DESCRIPTION OF THE SECTOR 
4. The domain of accountancy services has b een defined differently by WTO Member 
governments, and the boundaries with other regulat ed professions (e.g. the legal profession with 
respect to taxation) or non-regulated services provide rs (e.g. management consultants) are therefore 
not delineated consistently.  With respect to the Services Sectoral Classification List 
(MTN.GNS/W/120), accounting, auditing and bookkeepi ng services are part of subsector "A." of "1. 
Business Services
" The corresponding classification number under the United Nations' "Provisional 
Central Product Classification"(CPC) is 862. 
5. Under the Provisional CPC, the category of "Accounting, auditing and bookkeeping services" 
is further sub-divided, as follows: 
Accounting and auditing services (CPC 8621)  
 
• Financial auditing services (CPC 86211) 
Examination services of the accounting records and other supporting evidence of an organization for the purpose of expressing an opinion as to whether financial statements of the organization present fairly  its position as at a given date and the 
results of its operations for the period ende d on that date in accordance with generally 
accepted accounting principles. 
 
• Accounting review services (CPC 86212) 
Reviewing services of annual and interim financial statements and other accounting 
information.  The scope of a review is less than that of an audit and therefore the level of assurance provided is lower 
 
• Compilation of financial statements services (CPC 86213) 
Compilation services of financial statements from information provided by the client.  
No assurances regarding the accuracy of the resulting statements are provided.  
Preparation services of business tax returns, when provided as a bundle with the preparation of financial statements for a single fee, are classified here. 
Exclusion:  Business tax preparation servi ces, when provided as separate services, are 
classified in sub-class 86302 (Business tax preparation and review services).  
• Other accounting services (CPC 86219) 
Other accounting services such as attestations, valuations, preparation services of pro 
forma  statements, etc. 
 
Bookkeeping services, except tax returns (CPC 8622)
 
 
• Bookkeeping services, except tax returns (CPC 86220) 
Bookkeeping services consisting in classifying and recording business transactions in 
terms of money or some unit of measurement in the books of account. 
Exclusion:  Bookkeeping services related to  tax returns are classified in subclass 
86302 (Business tax preparati on and review services). 
 6. The adoption of CPC Rev. 1 brought little subs tantive change in regard to accounting, 
auditing and bookkeeping services, as described in th e Secretariat document, "Detailed Analysis of 
the Modifications Brought about by the Revision of the Central Product Classification:  Professional 
Services", dated 27 March 1998 (S/CSC/W/6/Add.10, p. 4).  The revisions for accountancy are 
limited to minor changes in definition and wording.  S/C/W/316 
 Page 3 
 
 
  7. The definition of accountancy services per se  should be distinguished from the expanding 
range of activities conducted by firms:  for exampl e, the Federation of Eur opean Accountants (FEE) 
notes that "activities of professional accountants in public practice, business and government are 
increasingly varied. They include well known activities such as preparation of financial information, 
tax services, statutory audit, as well as many innovative services in the areas of sustainability, strategy 
and management consultancy"5   (Table 1) .  Consequently, as the previous Note observed, "some may 
argue that a distinction should be made, in certa in cases, between accountancy services and services 
provided by accountancy firms.  Others would argue that if a service is provided by an accountancy 
firm it is, by definition, an accountancy service".6 
Table 1:  The range of activities of the accountancy profession 
Audit and other assurance services 
Statutory audit of historical financial, statements 
(private and public sector), audit of contributions in 
kind, voluntary audit, forensic audits, operational 
audits, reports on internal controls... Sustainability 
Reporting advice on the provision of reliable 
information to stakeholders on environmental, social 
and economic performance of organisations, 
assurance engagement in relation to sustainability matters... 
Accounting 
Maintenance of financial records and preparation of 
financial information, consulting on accounting 
procedures, design and implementation of accounting 
systems and related internal controls... Legal services 
Preparation of legal documents, support to the general 
assembly, advice on company law, regulated 
insolvency services... 
Tax 
Preparing tax returns, evaluating the tax implications 
of an operation, assistance in negotiations with the 
taxation authorities and in courts... Administrative and huma n resources engagements 
Payroll preparation, preparation of employment 
contracts, relations with social security institutions, 
recruitment... 
Financial services 
Business valuation, financial due diligence, investment 
analysis, financial planning, debt restructuring and 
recapitalisation, trusteeship...  Consultancy 
Management consultancy, strategic advice, design 
and implementation of business information 
technology systems, organisation of internal controls, consulting in cash and treasury management... 
Source :  Federation of European Accountants (FEE). 
 
III. ECONOMIC IMPORTANCE OF THE SECTOR AND ITS MAIN ECONOMIC 
FEATURES 
8. As indicated above, the accountancy profession provides services that are essential to the 
functioning of any economic system.  While the sector's overall economic importance therefore 
cannot be measured only in terms of employment or  sales, relevant statistics would nonetheless help 
identify key trends.   However, significant lacunae have pers isted.  In 1998, the previous Note 
observed that many statistics for accountancy were a pparently unavailable.  To a surprising degree, 
this appears to still be the case, due at least par tly to the lack of comparable definitions.   
9. On the basis of national balance of paymen ts (BOP) data, WTO figures for exports of 
accounting, auditing, bookkeeping and tax cons ulting services (Annex 1), indicate that the 
                                                      
5 FEE Annual Report 2008, p. 7.  Similarly, the OECD observes that  services provided by the 
accounting professions "generally include  statutory and internal audits, othe r accountancy services - such as 
advice on financial controls, due diligence, and insolvency practice - and tax advisory services.  Accountants may also participate in a wide range of related business activities, such as business valuation, forensic 
investigation, strategic planning, sales and marketi ng, and information technology and human resources 
management" (OECD 2009, Policy Roundtables, Competition and Regulation in Auditing and Related 
Professions , p. 11). 
6 WTO document  S/WPPS/W/2, 27 June 1995, p. 7. S/C/W/316 
Page 4  
 
  Netherlands had the largest share in 2008, estimat ed at US$3.35 billion, followed by the United 
Kingdom and Luxembourg, at US$2.55 billion and US$1.33 billion, respectively.
7  With regard to 
imports (Annex 2), the United States8 ranked first, estimated at US$2.27 billion, followed by the 
Russian Federation and Sweden, at US$533 m illion and US$377 million, respectively.   
10. With respect to affiliate sales for accountancy , little information is evidently available.9  I t  
appears reasonable to assume, however, th at these sales are significantly larger.10  Complicating the 
issue, in some cases data have been  suppressed due to privacy concerns.11  
11. With regard to domestic sales, employment, the number and size of firms, etc., national 
statistical offices do report information for account ancy, but comparable global data is evidently 
unavailable.  Some estimates are published by indu stry researchers, for example with respect to 
Certified Public Accountants, and they show wi de variations between countries (Annex 3).  Not 
surprising, the designation of those considered memb ers of the profession has an important impact on 
the size of the accountancy sector.  In some jurisdic tions, for example, designation is equivalent to 
education, irrespective of the subsequent career  path or activities. In  others, the professional 
designation is equivalent to a functional title, whic h the holder must surrender if they cease to 
undertake accounting activities.12   
12. Selected data regarding accountancy firms, empl oyment, etc. is also available on the websites 
of national accountancy associations.  For exampl e, the Chinese Institute of Certified Public 
Accountants (CICPA) in 2006 listed 69,705 prac ticing CPAs as members, 5,671 accounting firms, 
618 branches, and 1,431 partnerships (Annex 4).  With  respect to professional activities, the American 
Institute of Certified Public Accountants (AICPA) in dicates that the great majority of its members are 
active in public accounting and business/industr y, with much smaller numbers working in 
government, consulting, education and law (Annex 5) .  Worldwide, the International Federation of 
Accountants (IFAC), the global organization for the accountancy profession, in 2010 included 159 
members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants employed in public practice, i ndustry and commerce, government, and academia.
13     
13. Of the accountancy associations, as recorded in The Accountant 's World Survey 2009 , the 
largest in terms of membership is the AICPA, with 367,569 members in 2009, followed by the CICPA 
                                                      
7 Unfortunately, there ar e no aggregate figures available for th e EU 27.  In the BOP, the category 
"accounting, auditing, book- keeping and tax consulting services" co vers "the recording of commercial 
transactions for businesses and others;  examination se rvices of accounting records and financial statements, 
business tax planning and consulting, an d preparation of tax documents".  Ther e are no bilateral trade figures for 
the US, nor for EU Members.  Simila rly, comparable worldwide data on  accountancy employment, value added 
or FATS are apparently unavailable. 
8 The break in series in US figures is due to the fact that up to 2005, data covered only 
transactions between unaffiliated par ties, while as from 2006 they co ver total trade (both unaffiliated and 
affiliated).  This revision was part of a larger, important revision of US trade in services figures as contained in 
the US Bureau of Economic Analysis Survey of Current Business  of October 2008.   
9 As noted in an earlier Secretariat document, A Review of Statistics on Trade Flows in Services  (WTO 
document S/C/W/27, 10 November 1997), statistics for many services sectors are generally unavailable, 
especially data on the trade of foreign affiliates. 
10 The USITC 2009 Annual Report of Recent Trends in US  Services Trade  observed that affiliate 
transactions were the princi pal means of providing services to overseas  customers, and accounted for 66 per cent 
of overall US  services trade volume in 2006 (p. 1-4). 
11 For example, the 2009 USITC Annual Report, with re spect to sales by foreign affiliates of US firms, 
states that "accounting, bookkeeping,  payroll services, and specialized design services data were suppressed to 
avoid disclosure of data of individual companies" (footnote c, p. 2-9).   
12 OECD 1999, Policy Roundtables, Competition in Professional Services , p.56. 
13 A listing of IFAC members and their websites can  be found at http://web.ifac.org/about/member-
bodies.  IFAC has collected national-level information regarding members, but it has not yet been published.    S/C/W/316 
 Page 5 
 
 
  with an estimated 165, 000, and the Institute of Chartered Accountants of India (ICAI) with 157,241 
(Table 2).  In terms of students the rankings are ve ry different, with the ICAI by far the largest, at 
560,880, followed by the U.K.'s Association of Ch artered Accountants (ACCA) at 347, 280 and the 
Institute of Cost and Works Accountants of Indi a (ICWAI) at 150,000  (Table 3).  The ACCA is the 
most globalized of the accountancy associations, with 55 per cent of its nearly 135,000 members 
based outside of the U.K.14  
Table 2:  World's Largest Professional Accountancy Bodies by Membership, 2009 
Accountancy Associations Membership 
American Institute of Certifie d Public Accountants (AICPA) 
Chinese Institute of Certified Public Accountants (CICPA) Institute of Chartered Accountants in India (ICAI) 
Association of Chartered Ce rtified Accountants (ACCA) 
Institute of Chartered Accountants in England and Wales (ICAEW) Consiglio Nazionale dei Dottori Commerc ialisti ed Esperti Contabili (CNDCEC) 
CPA Australia 
Union of Chambers of Certified Pub lic Accountants of Turkey (TURMOB) 
Chartered Institute of Management Accountants (CIMA) 
Canadian Institute of Chartered Accountants (CICA)  
Institute of Management Accountants, US (IMA) Institute of Chartered Accountants, Australia (ICAA) 
Canada - Certified General Accountants Association of Canada (CGA) 
Institute of Cost and Works Accountants in India (ICWAI) The Society of Management Accountants of Canada (CMA Canada) 
South African Institute of Chartered Accountants (SAICA) 
Japanese Institute of Certifie d Opublic Accountants (JICPA) 
Malaysian Institute of Accountants (MIA) 
Stowarzyszenie Ksiegowych w Polsce (SKWP) 
Singapore Institute of Certifie d Public Accountants (SICPA) 367,569 
165,000* 
157,241 
134,748 
132,411 110,469 
80,255 
79,578 76,368 
75,670 
58,907 51,338 
47,062 
42,000 40,307 
29,377 
28,237 
26,200* 
21,213 
20,000* 
Source :  The Accountant, World Accounting Survey , 2009. * Estimate  
 
Table 3:  World's Largest Professional  Accountancy Bodies by Students, 2009  
Accountancy Associations  
Institute of Chartered Accountants in India (ICAI) 
Association of Chartered Ce rtified Accountants (ACCA) 
Institute of Cost and Works Accountants in India (ICWAI) 
Chartered Institute of Management Accountants (CIMA) 
Chinese Institute of Certified Public Accountants (CICPA) CPA Australia 
Certified General Accountants Association of Canada (CGA Canada) 
Institute of Chartered Accountants in England and Wales (ICAEW) Institute of Management Accountants, US (IMA) 
Canadian Institute of Chartered Accountants (CICA)  
Union of Chambers of Certified Pub lic Accountants of Turkey (TURMOB) 
Institute of Chartered Accountants, Australia (ICAA) 
South African Institute of Chartered Accountants (SAICA) 
American Institute of Certified Public Accountants (AICPA) of Management Accountants of Canada (CMA Canada) 
National Institute of Accountants, Australia (NIA) 
National Chamber of Statutory Auditors, Poland (NCSA) 
Conseil Superieur de l'Ordre des Experts Comptables (CSOEC) 
Compagnie Nationale des Commissaires aux Comptes (CNCC) Singapore Institute of Certifie d Public Accountants (SICPA) 560,880 
347,281 150,000 
91,524 
60,000* 
48,730 
25,075 
16,165 16,032 
12,852 
12,734 12,547 
10,380 
8,830 8,380 
7,853 
7,654 
6,223 
5,739 
5,000* 
Source :  The Accountant, World Accounting Survey, 2009.       * Estimate 
 
                                                      
14 The Accountant , World Survey 2009:  Crossing borders , December 2009. S/C/W/316 
Page 6  
 
  14. Among accountancy firms, the top international networks/associations by income in 2008 are 
listed in (Table 4).  For 2009, for the more than  40 organisations surveyed by World Accounting 
Intelligence , network revenues dropped 6 per cent on aver age due to the economic crisis, to US$122 
billion.  PricewaterhouseCoopers International (PwC),  the largest network fi rm, reported fee income 
of US$26.2 billion, a 7 per cent decline.  Deloitte registered a 5 per cent drop in revenue, to US$26.1 
billion.15  KPMG reported an 11 per cent  drop in revenue.  RSM International registered an increase 
of 8 per cent, to US$3.75 billion, while at Grant Thornton International revenue contracted by 9 per 
cent to US$3.59 billion.  Baker Tilly Internationa l was the only other top-10 network to report a 
revenue increase.  Audit demand in 2009 was affect ed by severe fee reductions, while tax demand 
suffered as clients generally paid less tax, affec ting the neeed for tax planning advice.  The weakest 
area was corporate finance, while restructuring services were strong.16  
Table 4:  Top International Networks  / Associations by Income:  2008  
Firm Name Income 
(US$ mil.) Growth rate 
(%) Year ending 
Pricewaterhouse Coopers International 28,185 14 30/06/2008 
Deliotte 27,400 19 31/05/2008 
Ernst & Young Global 24,500 16 30/06/2008 
KPMG International 22,690 15 30/09/2008 
BDO International 5,145 9 30/09/2008 
Grant Thornton International 4,000 14 30/09/2008 
RSM International 3,577 19 31/12/2008 
Praxity 3,233 14 31/12/2008 
Baker Tilly International 2,956 18 30/06/2008 
Crowe Horwath International 2,895 19 31/12/2008 
Source :  World Accounting Intelligence (h ttp://www.vrl-archives.com/wai/). 
 
A. FROM THE "BIG 8" TO THE "BIG 4" 
15. Until the late 1980s, as noted in a 2009 OECD study on the auditing profession,  there were 
eight major accounting firms that provided "few services other than auditing".17  Since 2003, however, 
only four firms now audit the vast majority of la rge public companies, while deriving very significant 
portions of their income from non-auditing services.18  Reasons for the consolidation, other than the 
Enron case involving Arthur Andersen (see paragraph 35), are related to the characteristics of the 
profession, e.g. accounting firms need to be big in orde r to compete, but also include the need to cover 
litigation risks, insurance costs, and the co mplexity of conflict of interest rules.19 
16. Increased concentration does not necessarily imply a lack of competition.  Instead of prices, 
however, it focuses on reputation, which is evidentl y more important as a competitive parameter.  A 
survey by the US Government Accountability Offi ce (GAO) in 2008 suggested that the increase in 
concentration did not lead to higher prices charged by  the Big Four.  In the EU, in addition to national 
                                                      
15 For Ernst & Young, their website reported 2009 revenues of US$21.4 billion (www.ey.com). 
16 World Accounting Intelligence , Global accounting firms suffer revenue decline , January 2010  
(Available online, at http://www.vrl-financial-news.c om/accounting/world-accountin g-intelligence /issues/wai-
2010/january-2010/global-accounting-firms-suffer.aspx). 
17 OECD 2009, op. cit., p. 7.  The provision of statutory audits, in all the OECD countries, is an 
exclusive right reserved for ‘public accountants’. 
18 The current number of large accounting firms is now similar to that of the credit rating industry.  
(OECD 2009 is the main source for this and the following three paragraphs.) 
19 The US Government Accountability Office (known as the General Accounting Office until July 
2004) found that the mergers between the former Big Eight firms in the 1980s and 1990s could be explained by 
the need for accounting firms to grow in order to keep up with their clients, taking advantage of economies of scale, expanding industry-sp ecific knowledge and technical expertise, an d increasing the capital base in order to 
spread risk.  S/C/W/316 
 Page 7 
 
 
  liability rules that prevent new players from entering the market, conflict of interest rules on 
ownership have been identified as a major justification for market concentration.20 (See also the 
competition section of Part IV.) 
17. Accounting firms themselves (including the Big Four) take concerns about the existence of 
conflicts of interest within their organizational structures seriously.  Consequently, Ernst & Young 
sold its consulting practices to the French IT services company Cap Gemini in May 2000  and 
PricewaterhouseCoopers sold its consultancy business to IBM in October 2002.  KPMG divested its 
American consulting activities in January 2000, while it sold its consulting units in the UK and in the 
Netherlands in August 2002.  Only Deloitte and To uche had not divested its management consulting 
practices at that time.21 
18. The current "Big 4" accounting firms (Box 1), i.e. PricewaterhouseCoopers, Deloitte Touche 
Tohmatsu, Ernst & Young, and KPMG, are responsible fo r the vast majority of the audits for publicly 
traded companies (and many private companies) worl d-wide.  As noted above, these organizations are 
actually networks of firms rather than single entities, with members in the network generally 
operating under a common name and observing comm on professional and service standards.  At the 
national – or sub-national – level,  however, member firms are required to meet the entry and conduct 
regulations that apply in that particular jurisdiction.22  
Box 1.    The  "Big 4" Accounting Firms     
"PricewaterhouseCoopers  (PwC) refers to the network of member firms of PricewaterhouseCoopers 
International Limited, a UK limited company.  Each of these member firms is a separate and independent legal 
entity.  In most OECD countries the member firms operate under the name PwC, but some variations exist.  In 
the Republic of Korea, for example,  they are called Samil PwC.  In Ja pan, where PwC has two offices, the 
Tokyo office is named PwC HRS, whereas the Kyoto office is a co-operating firm named Kyoto Audit 
Corporation.  According to the information presented on its website, PwC provides services in the fields of 
assurance, tax, human resources, transactions, performa nce improvement and crisis management.   Its world-
wide gross revenues for the fiscal year ended 30 June  2008 equaled US$28.2 billion (out of which 13.8 billion 
was related to assurance), the highest of the Big Four organizations. More than 155,000 people in 153 countries 
worked for PwC in 2008. 
The co-ordinating entity of Deloitte Touche Tohmatsu  (DTT) is a Swiss Verein .  All the member firms are 
legally separate and independent entities, operating unde r the name “Deloitte”, “Deloitte & Touche”, “Deloitte 
Touche Tohmatsu” or other related names (for example, Deloitte Anjin LLC in the Republic of Korea).  In its 
own words, DTT “provides audit, tax, consulting and fina ncial advisory services to public and private clients 
spanning multiple industries”.  The organization is active in 140 countries and has about 165,000 employees 
(more than any other of the Big Four).  Aggregate revenues of DTT member firms for the fiscal year ended 31 
May 2008 totalled US$27.4 billion. 
 
                                                      
20 The European Commission initiated a public consultation on conflicts of interest and ownership rules 
in 2008, and found that factors affecting competition included brand recognition and perception of reputation, 
technical expertise, differences among the global reach of firms, and differences in national requirements. 
21 To some extent the sales were evidently also a result of changes in regulations.  The US Securities 
and Exchange Commission (SEC) in 2001 amended its rules regarding auditor independence.  Subsequent to the 
Sarbanes-Oxley Act in 200 2, the SEC issued new i ndependence rule s in March 2003 that placed additional 
limitations on management consulting and other nonaudit serv ices that firms can provide to their audit clients.   
22 The GAO found that the Big Four in 2007 audited almost all (98 per cent) of the largest public 
companies.  In the UK, it was found that the Big Four audited all but one FTSE 100 company, and 242 of the 
FTSE 250 companies. S/C/W/316 
Page 8  
 
   
The UK limited company ‘Ernst & Young Global Limited’ is the principal governance entity of the global Ernst 
& Young  organization.  In many of the OECD countries (such as the United States, the Republic of Korea, the 
Netherlands, Sweden and Turkey) its member firms are called Ernst & Youn g.  In some other countries the 
names are different:  for example, in Japan the member firms operate under the name Ernst & Young ShinNihon 
and in Mexico they are called Mancera.  The world-wide  revenues of Ernst & Young were 24.5 billion for the 
fiscal year ending (p. 15) 30 June 2008. The number of employees in 2008 was 135,000. The organization 
presents itself as “a global leader in assuranc e, tax, transaction and advisory services”. 
KPMG  International is a Swiss cooperative.  Member firms of the KPMG network of independent firms, which 
are located in more than 140 countries, are affiliated w ith KPMG International.  In Europe, KPMG has recently 
merged its firms in the UK, Germany and Switzerland, to be joined by its firms in the Netherlands and Spain, 
making KPMG Europe the largest accounting firm in Europe.16  According to information presented on its 
website, KPMG “provides audit, tax and advisory services and industry insight to help organizations negotiate 
risks and perform in the dynamic and challenging environments in which they do business”.  Combined 
revenues for its member firms, which employed 137,000  people last year, were US$22.7 billion for the fiscal 
year ended September 30, 2008."    
(Source :  OECD, Policy Roundtables, Competition and Regulation in A uditing and Related Professions , 2009, p. 14.) 
 
B. PROSPECTS FOR THE FUTURE  
19. The Association of Chartered Accountants  (ACCA) in 2009 released a report entitled 
Accountancy:  The future outlook .23  The report includes sections on demand and future skills, as well 
as on future business conditions.  With respect to accountancy demand, the report noted that CFOs, 
partners and senior accountants generally predicte d buoyant demand for qualified accountants in the 
short term, with almost two-thirds of those surv eyed expecting demand to increase.  Despite the 
global economic downturn, industrial growth – both  domestic and global – is expected to trigger 
greater demand for qualified accountants.  The need for accountants in developing economies such as 
China, India and in the Middle East was particularly highlighted. 
20. While many survey respondents believed th at demand for qualified accountants would 
increase because of economic growth, others fo cused on the global economic downturn.  They 
believed that a more difficult business climate w ould make the financial insights of qualified 
accountants even more valuable.  Many survey  respondents believed that the environment for 
accountancy was becoming increasingly complex, due to additional regulatory burdens, global 
competition, and innovation in business finance and transactions. 
21. With respect to accountancy skills, the most importa nt financial skill expected to be in greater 
demand was enterprise risk management , i.e. aiming to manage risks by taking an integrated view of 
the various uncertainties that exist across an organi sation.  Other frequently mentioned financial skills 
were strategic scenario planning, and skills  in improving the use of data or knowledge. 
                                                      
23 The report was based on a telephone survey of  over 750 CFOs, partners and senior accountants, 
across business sectors, across three continents, in eight countries:  Malaysia, UK, Republic of Ireland, 
Singapore, Zambia, Hong Kong, Sri Lanka and South Africa.  Respondents were from the following business 
sectors:  40 per cent public practice, 40 per cent  corporate sector, and 20 per cent public sector.  S/C/W/316 
 Page 9 
 
 
  IV. REGULATORY STRUCTURES AND RELEVANT TRADE RESTRICTIONS 
A. CURRENT REGULATORY STRUCTURES  
22. Regulation of accountancy involves certain rest rictions on entry and professional conduct, 
and while some restrictions may be a remedy to market failures and may also be based on distributional or paternalistic motives, other restrictions  may serve private rather than public interests.  
With respect to correcting information asymmetr ies between accountants and their clients, and 
preventing negative externalities to investors, bank s and creditors, regulation of auditor entry and 
educational requirements is needed, together with  more general prohibitions, e.g. on false and 
misleading advertising.
24   
23. Although self-regulation can be a useful tool, together  with public regulation, there is a risk of 
rent-seeking behaviour.  Overall, regulatory frameworks for accountancy services range from virtually 
no oversight to self-regulation to multiple regulators.   Regulations differ from country to country and 
even within a country (due to sub-federal jurisdic tions).  In addition, c lients purchasing accountancy 
services are regulated regarding the types of services they are required to have or can select.  Solutions for such cross-border inconsistencies can include the adoption of international standards to 
improve mobility, as well as mutual recognition (a nd co-operation) between regulatory bodies. 
24. The most common forms of accountancy regulatio n include quality standards and exclusive 
rights, quantitative restrictions, advertising rest rictions, price regulation, and rules on inter-
professional co-operation and business structure.  In all EU Member States, for example, statutory audit is an exclusive right of one or more prof essional groups, but market entry regulation for other 
financial services differs from country to country.  In several EU Members, exclusive rights of 
accountants are much wider than in others, because  services such as non-statutory audits, accounting 
and bookkeeping, and tax advice and tax represen tation are exclusive rights of the respective 
professions.
25    
25. In the US, all jurisdictions have laws govern ing the licensing of certified public accountants, 
including requirements for education, examination and experience.  However, while the use of the 
title “certified public accountant” in each jurisdiction is  restricted to individuals registered with the 
state regulatory authority, the other licensure requi rements are not uniform.  In addition, under all 
States’ laws, certified public accountants must make  up the majority ownership of all accounting 
firms, and other owners must be active participants in the firms.  The goal of these rules is to limit the 
potential for conflicts of interest.26   
26. The OECD's  Indicators of Product Market Regulation Database  show significant declines in 
regulatory restrictiveness in accounting, as in other professional services, between 1996 and 2003 
(Annex 6).  Between, 2003 and 2008, however, the level of restrictiveness increased slightly, 
corresponding to the changes in regula tion described below.  Overall, the Indicators  show that levels 
of restrictiveness for accountancy (and legal services)  are higher than for architecture or engineering 
                                                      
24 Competition law may be  necessary to control car tel-like behaviour and abuse of market dominance.  
Nonetheless, the OECD advises that regulation should not extend beyond what is necessary to address the 
prevailing market failures.  (OECD 2009 is the main source for this and the following six paragraphs.) 
25 In 2003, responding to a questionnaire sent out by the European Commission, a majority of the 
national accounting associations argued that appropriate entry requirements and qualifications for statutory 
auditors should be maintained, but they disagreed on whether qualified professionals should also have exclusive 
rights to offer non-audit services such as accountancy and tax advice. 
26 However, as noted below,  prohibiting certain types of business structure also makes entry into the 
accounting market much more difficu lt for potential competitors of th e "Big 4" accounting networks.   S/C/W/316 
Page 10  
 
  services.
27  The indicators measure entry regulations (licensing, education requirements, and quotas 
and economic needs tests), and conduct regulations  (regulations on the form of business and inter-
professional cooperation, advertising, and prices and fees).28 
27. Under the Member Body Compliance Program (see below) of the International Federation of 
Accountants (IFAC) all 159 members and associat es are required to assess their regulatory and 
standard-setting framework, on the basis of an IFAC  questionnaire, and to develop action plans to 
address deficiencies identified in the assessment.  Ac tion plans and assessments for all IFAC members 
and associates are publicly available.29 
B. ACCOUNTANCY DISCIPLINES30 
28. After several years of discussions, WTO Member governments in 1997 adopted the 
Guidelines for Mutual Recognition Agreements or Arrangements in the Accountancy Sector ,31 
(Annex 7 ) followed by the Disciplines on Domestic Regulation in the Accountancy Sector32 in 1998 
(Annex 8).   
29. Article VI:4 of the WTO's General Agreement on Trade in Services (GATS) states, "With a 
view to ensuring that measures relating to qualif ication requirements and procedures, technical 
standards and licensing requirements do not constitute unnecessary barriers to trade in services, the 
Council for Trade in Services shall, through a ppropriate bodies it may establish, develop any 
necessary disciplines.  Such di sciplines shall aim to ensure that such requirements are, inter alia :  
(a) based on objective and transparent criteria, such as competence and the ability to supply the 
service;  (b)  not more burdensome than necessary to en sure the quality of the service;  (c)  in the case 
of licensing procedures, not in themselves a restriction on the supply of the service".  
30. The first step in implementing the mandate of GATS Article VI:4 was the ministerial-level 
Decision on Professional Services , which established of the Working Party on Professional Services 
(WPPS).  Current work takes place in the context of the Working Party on Domestic Regulation (WPDR).  With respect to accountancy, the manda te of the WPPS had three parts:  1) the 
development of disciplines on domestic regulatio n (in accordance with the requirements of GATS 
                                                     
 
27 Available online, together with details of the methodology used, at http://www.oecd.org/ 
dataoecd/25/19/42220487.xls.  The OECD, as mentioned in the 1998 Note,  conducted a survey of regulations on 
access to professional services in the OECD area as part of its work in preparatio n for the Second Workshop on 
Professional Services which took place in 1996.  The Indicators database is described by the OECD as a 
comprehensive, internationally-comparable set of information about the state of regulation and market structures 
in OECD countries. 
28 The main sources of information used to constr uct the professional services indicators are the 
responses of OECD member governments to the Regu latory Indicators Questionnaire (see http://www.oecd 
.org/document/24/0,3343,en_2649_34833_35858776 _1_1_1_1,00.html).  The professional services indicators 
cover entry and conduct regulation in the legal, accounting, engineering, and architectural professions.  In 2008, these indicators were updated and revi sed;  they are now estimated for the years 1998, 2003 and 2008.   
29 http://www.ifac.org/ComplianceProgram/. 
30 This section is based on Dale Honeck, Developing Regulatory Discipline s in Professional Services:  
The Role of the World Trade Organization , in Yair Aharoni and Lilach Nachum (editors), "Globalization of 
Services:  Some implications for th eory and practice",  Routledge Studies in International Business and the 
World Economy, Routledge 2000, pp. 52-72. 
31 WTO document S/L/38, dated 28 May 1997. 
32 WTO document S/L/64, dated 17 December 1998.  S/C/W/316 
 Page 11 
 
 
  Article VI:4);  2) concentration on the use of international standards;33 and 3) the establishment of 
guidelines for the recognition of qualifications.   
31. The MRA Guidelines were released in May 1997.  As decided by WTO Members, the 
Guidelines  are voluntary.  According to the intro duction, "The most common way to achieve 
recognition has been through bilateral agreements".34  Core elements of the Guidelines, in addition to 
a reminder of the notification requirements under Article VII of the GATS, are recommendations on 
the form and content of MRAs.  To date, the Guidelines  appear to have had little effect in accelerating 
the low level of accountancy MRAs currently in place.35 
32. The Disciplines on Domestic Regulation in the Accountancy Sector , were adopted by the 
Council for Trade in Services on 14 December 1998.  The Accountancy Disciplines are rather concise, 
comprising twenty-six paragraphs in four pages (six  pages with the appendix).  They are divided into 
eight sections, i.e.:  Objectives, General Provisions, Transparency (five measures), Licensing Requirements (six measures), Licensing Procedures (five measures), Qualification Requirements (three measures), Qualification Procedures (three measures) and Technical Standards (two measures).  
33. The main elements of the Accountancy Disciplines  are paragraphs one, tw o, five, and six.  
Paragraph one confirms that that Article VI di sciplines are separate and distinct from market access 
and national treatment measures under GATS Articles XVI and XVII, respectively.  Paragraph two 
mandates a "necessity test" for all applicable regulator y measures, i.e. the requirement that regulatory 
measures shall not be more trade-restrictive than  necessary to fulfil a speci fied legitimate objective.
36  
In paragraph five, Members are required to expl ain upon request the specific objectives intended by 
their accountancy regulations.  In paragraph six, WTO Member governments are asked to provide an 
opportunity for trading partners to comment upon proposed accountancy regulations, and to give 
consideration to such comments.  
34. The Accountancy Disciplines are not yet legally in effect.37  Before the end of the current 
round of services negotiations, which commenced in January 2000, all the disciplines developed by 
the WPPS (now the WPDR) are to be integrated into  the GATS and will then become legally binding.  
                                                      
33 In regard to international standards, the Singapore Ministerial Declaration of 13 December 1996 
included the statement, "We encourag e the successful completion of intern ational standards in the accountancy 
sector by IFAC, IASC and IOSCO."   
34 The Guidelines further state (p. 1), "There are di fferences in education a nd examination standards, 
experience requirements, regulatory influence and various other matters, all of which make implementing 
recognition on a multilateral basis extremely difficult".  It is interesting to note that the Decision on Professional 
Services  actually refers to the establishment of guidelines  for the recognition of qualifications in respect to 
GATS Article VI:6, and not specifically to the developmen t of guidelines for MRAs (Article VI:6 states "In 
sectors where specific commitments rega rding professional services are u ndertaken, each Member shall provide 
for adequate procedures to verify the compet ence of professionals of any other Member".) . 
35 Nonetheless, it might be argued they helped to focus greater attention, at both the government and 
industry levels, on the issue of creating MRAs as a means of facilitating trade in professional services. 
36 Examples of such legitimate objectives mentione d in the disciplines are the protection of consumers 
(including all users of accounting services and the public  generally), the quality of the service, professional 
competence and the integr ity of the profession. 
37 The Decision  of the Council for Trade in Services adopting the Accountancy Disciplines (WTO 
document S/L/63, 15 December 1998) is composed of three elements.  First is a statement that the disciplines 
have been adopted by the Council, and that they ar e applicable to Members who have scheduled specific 
commitments on accountancy.  The second element states that Members will continue their work on domestic regulation, aiming to develop general disciplines for professional services while retaining the possibility to 
develop additional sectoral disciplines.  The final elemen t is a 'standstill provision', effective immediately, under 
which all WTO Members, including those without GATS commitments in the accountan cy sector, have agreed, 
consistent with their existing legislation, not to ta ke new measures which would be in violation of the 
accountancy disciplines. S/C/W/316 
Page 12  
 
  WTO Members subsequently embarked upon a major e xpansion of their efforts to develop regulatory 
disciplines under Article VI:4.  The 1999 Decision on Domestic Regulation
38 replaced the WPPS with 
a new Working Party on Domestic Regulation (W PDR).  The WPDR is mandated to develop 
generally applicable disciplines, and may develop disciplines as appropriate for individual sectors or 
groups of sectors, including professional services. 
C. RESTORING PUBLIC CONFIDENCE  
35. A 2003 report by the International Federation of Accountants (IFAC), titled Rebuilding 
Public Confidence In Financial Reporting:  An International Perspective , noted that the 1980s and 
1990s were littered with examples of reporting fail ures, generally associated with governance and 
business failures, and that the East Asian financia l crisis in the second half of 1997 also raised 
questions about the reliability of financial statements  and the role of the large international accounting 
firms.  As the report stated, however, "The collaps e of Enron {Box 2} and the related auditor issues 
are seen by many as the event that initiated the ch anged perception of the reliability of financial 
reporting .  The larger, but much simpler, reporting failures at WorldCom and issues raised at Global 
Crossing, Tyco, Adelphia, and Xerox added further ex amples, reinforcing the perception that financial 
reporting was not to be relied upon".39  
36. Among the observations in the IFAC report was th at a company with securities listed in more 
than one country would be subject both to the rules in its home country and those in the other countries in which it was listed. The presence in the ma rket of sets of information that are different, 
but each of which purported to be a fair presenta tion, undermined the credibility of each set. It 
increased the inefficiency of the market as well as added unnecessary costs.  The alternative, the 
report stated, was to agree on a “neutral” set of standards which could be accepted by every country, 
and either adopted as the country’s standards or incorporated into them.  
37. The main findings in the IFAC report are the following:  1. Effective corporate ethics codes 
need to be in place and actively monitored;  2. Corporate management must place greater emphasis on the effectiveness of financial management and c ontrols;  3. Incentives to misstate financial 
information need to be reduced;  4. Boards of  directors need to improve their oversight of 
management;  5. The threats to auditor independenc e need to receive greater attention in corporate 
governance processes and by auditors themselves;  6. Audit effectiveness needs to be raised primarily 
through greater attention to audit quality control pro cesses;  7.  Codes of conduct need to be put in 
place for other participants in the financial reporting process, and their compliance should be 
monitored;  8. Audit standards and regulation need to be strengthened;  9.  Accounting and reporting 
practices need to be strengthened;  and 10. The standa rd of regulation of issuers needs to be raised.  
                                                     
 
38 The Decision  was adopted by the Council for Trade in Services on 26 April 1999 (WTO document 
S/L/70).  Two Secretariat pa pers were also prepared:  Article VI:4 of the GATS:  Disciplines on Domestic 
Regulation applicable to all Services  (S/C/W/96) and International Regulatory Initiatives In Services  
(S/C/W/97), both dated 1 March 1999.   
39 IFAC 2003, Rebuilding Public Confidence In Financial Reporting:  An International Perspective , 
p. 7.  S/C/W/316 
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  Box 2:  CASE STUDY:  ENRON 
As noted in the 2003 report by the Interna tional Federation of Accountants (IFAC), titled Rebuilding Public 
Confidence In Financial Reporting:  An International Perspective  (see paragraph 35 above): 
"Enron provides a good example of the involvement of the many market participants and of many of  the 
weaknesses that are now recognized as systemic.  Un derlying the collapse were a number of poor business 
decisions, some commercial misfortune and some personal fraudulent behavior, but many other factors 
combined to worsen the problem.  The interests of the senior executives were supposed to be aligned with that 
of shareholders through share options.  The use of “speci al purpose entities” shifted both losses and debts off the 
company’s financial statements.  In theory, many safeguards were in place to prevent managers from boosting 
the share price through questionable accounting. The board and the audit committee appeared better qualified 
than most, but several members faced financial conflicts.   
The accounting followed now looks unacceptable, but most of it was in line w ith accepted US standards and 
practices.  The auditors had extensive experience wi th the company, but may have been too close to 
management as a result of the large number of former audit firm employees at the client.  The provision of non-
audit services gave a perception of a lack of independence.  The engagement team also appears to have 
overridden advice from the firm’s technical department.   
Where were the regulators and the other market participants?  The special purpose entities may not have been 
consolidated, but there was significant disclosure in the financial statements which might have raised questions 
as to the appropriateness of the accounting. However, the regulator wa s resource constrained and had not 
performed a recent review of the statem ents.  The rating agencies did not prob e deeply enough.  Analysts at the 
investment banks appear to have been pressured by other parts of their organizations with the result that they 
were advising clients to buy Enron stock until the moment the firm collapsed.  The investment banks profited 
handsomely over the years from serving Enron and the markets it created, including helping to establish the 
special purpose entities. Lawyers earned high fees from gi ving opinions that supported what is now seen as 
inappropriate accounting.  The media were not critical until it was too late.   
This one example demonstrates for all the participants how their roles impact the financial reporting process and 
many of the significant weaknesses that can undermine it."     
(Source :  IFAC, Rebuilding Public Confidence In Financial Reporting:  An International Perspective , 2003, p. 11.) 
 
D. ROSC  INITIATIVE  
38. In the aftermath of the international financ ial crisis of the 1990s, the World Bank and the 
International Monetary Fund (IMF) in 1999 initiate d the joint Reports on the Observance of Standards 
and Codes (ROSC) initiative, covering 12 sets of inte rnationally recognized core standards and codes 
relevant to economic stability and pr ivate and financial sector development.40  Under this approach, 
the IMF took the lead in preparing assessments in  the areas of data dissemination and fiscal 
transparency.  Modules for the financial sector are mostly derived from the Financial Sector 
                                                      
40 The twelve sets of standards cover data dissemina tion, fiscal transparency, transparency in monetary 
and financial policies, banking supervision, securities ma rket regulation, insurance supervision, payments and 
settlements, anti-money laundering and the combating of  financing of terrorism,  corporate governance, 
accounting and auditing, and insolvency and creditor rights.  (World Bank 2004, Implementation of 
International Accounting and Auditing Standards:  Lessons Learned from the World Bank’s Accounting and 
Auditing ROSC Program , September 2004.) S/C/W/316 
Page 14  
 
  Assessment Program (FSAP).
41  The World Bank took the lead in  corporate governance, accounting 
and auditing, and insolvency regimes and cr editor rights.  As noted by the OECD:  
"In particular, a sound and efficient financial system relies heavily on the various 
elements that contribute to a robust financial reporting and auditing framework. 
Accounting standards and a high-quality audit profession are called upon to ensure 
the quality of regulatory reports and public disclosures, and thus have been included 
among the twelve standards identified by the Financial Stability Forum as conducive to a robust financial infrastructure."
42 
39. The ROSC and the FSAP programmes are tools to assess financial sector vulnerability and 
development needs. They provide input to the IMF for its surveillance activities and are useful 
instruments to support the policy dialogue of intern ational financial instituti ons, policymakers, and the 
private sector. They can contribute to the design of development lending operations, assist in the 
preparation of key policy documents, and provid e benchmarks for the design and monitoring of 
technical assistance and capacity-building programs. To remain useful, assessments of progress in the 
implementation of standards are updated periodically.  
40. Objectives of the ROSC programme include an alyzing comparability of national accounting 
and auditing standards with international standard s, to determine the degree to which applicable 
accounting and auditing standards are followed, an d assessing the strengths and weaknesses of the 
institutional framework in supportin g high-quality financial reporting.  Another major aspect of the 
ROSC initiative is to assist countries in developi ng and implementing an action plan for improving 
institutional capacity, with the aim of strengthe ning the corporate financial reporting regime.  
41. The IMF and the World Bank have set up we bsites to disseminate the final ROSC 
assessments to the public.43 
E. SARBANES -OXLEY ACT 
42. In July 2002, the Sarbanes-Oxley Act (SOX) was enacted in the US as a reaction to the many 
corporate and accounting scandals.  SOX significantly revised the oversight and regulation of the US 
accounting profession, most notably by strengthening corporate governance requirements and 
improving transparency and accountability.44    
43. SOX required the US  Securities and Exchange Commission (SEC) to implement a number of 
new rules, including independence rules, to address  areas such as prohibited non-audit services, audit 
partner rotation, and conflicts of interest.45  SOX also established the Public Company Accounting 
Oversight Board (PCAOB) to oversee the audit of public companies.  Although SOX rules are 
                                                      
41 The FSAP was a joint IMF/World Bank effort in troduced in May 1999, aimed at increasing the 
effectiveness of efforts to promote the soundness of financial systems in member countries (see 
http://www1.worldbank.org/fin ance/html/fsap.html).   
42 OECD 2009, op. cit., p. 12 (see also footnote 40).  The Financial Stability Forum (now Board), 
created by the G7 in the wake of the Asian financial cr isis, was convened in April 1999 to promote international 
financial stability through information exchange and international co-operation in financial supervision and surveillance.  It brings together senior representatives  of national financial authorities (e.g.  central banks, 
supervisory authorities and treasury depa rtments), international financial institutions, international regulatory 
and supervisory groupings, committees of central bank experts and the European Central Bank (see http://www.fsforum.org).   
43 The ROSC website, including details of the 12 core standards and country modules, is available at 
http://www.worldbank.org /ifa/rosc.html.   
44 This and the following two paragraphs are based on OECD 2009, op. cit., p. 34.   
45 As noted above, most Big 4 firms have divested their consultancy services.  S/C/W/316 
 Page 15 
 
 
  considered necessary and important, they might lim it the number of accounting firm choices in case a 
large public company wanted to switch auditors.46 
44. With respect to multi-disciplinary practices (MDPs),47 SOX to some extent limited 
possibilities for conflicts of interest, as did the 20 06 Directive on Statutory Audits in the EU.48  In 
some countries there are prohibitions on MDPs which are composed of accountants and other 
professionals such as lawyers.  Among the potential conflicts of interests could be the obligation of 
lawyers to protect client interests, which may conflict with the transparency requirements for 
accountancy. 
F. EFFECTS OF THE CURRENT CRISIS  
45. In connection with the current global economic and financial crisis, as noted in a recent 
UNCTAD report,  accounting and reporting issues have gained unprecedented attention at the highest 
levels of government as one of the pillars of global financial stability.49  The crisis further highlighted 
the need for strengthening of the institutiona l framework and governance of global accounting 
standard-setting, and improving the quality of intern ational financial reporting, and added impetus to 
the national and international debates on the impl ementation of Internatio nal Financial Reporting 
Standards (IFRS), which are described below. 
46. Among the key actors that have devoted significan t attention to the role of accounting and 
reporting in the context of the financial crisis ar e the 2008 and 2009 Summits of the Group of Twenty 
(G-20), the June 2009 meeting of the G-8 Finance Mini sters, the European Council of Ministers;  the 
United States Congress, and the Financial Crisis Advisory Group (which was established by the 
International Accounting Standards Board (IASB) and the Financial Accounting Standards Board 
(FASB) of the United States). 
47. The G-20,  in its declaration of April 2009, stated th at accounting standard-setters should take 
action by the end of 2009 to:  (a) reduce the co mplexity of accounting standards for financial 
instruments;  (b) strengthen accounting recognition of  loan-loss provisions by incorporating a broader 
range of credit information;  (c) improve account ing standards for provisioning, off-balance sheet 
exposures and valuation uncertainty;  (d) achieve clarity and consistency in the application of 
valuation standards, internationall y, working with supervisors;  (e) make significant progress towards 
a single set of high quality global accounting st andards;  and (f) within the framework of the 
independent accounting standard-setting process, impr ove the involvement of stakeholders, including 
                                                      
46 The 2003 IFAC report noted, "The main area of current or immediate conflict arises from the 
implementation of the US  Sarbanes-Oxley Act and, particul arly, its extraterritorial impact.  Issues arising from 
the need for a company to comply with the new US  governance regime, in addition to that in their home 
country, are a potential source of conflict;  it is too early to know whether this will be serious or just aggravating 
and costly.  The situation regardin g the registration and oversight of accounting firms by the US  Public 
Company Accounting Oversight Board (PCAOB) may be more  serious.  Each national practice of an accounting 
firm, that either audits a company which is an SEC re gistrant or audits a significant subsidiary of an SEC 
registrant, is subject to the PCAOB’s authority, including its monitoring process." (IFAC 2003, op. cit., p. 20). 
47 The OECD observes that accoun ting firms themselves can already be considered as multi-
professional firms, where conflicts of interest could po tentially arise, especially when auditing services are 
combined with other accountancy and consulting services. 
48 Directive 2006/43/EC on Statutory Audits of Annual and Consolidated Accounts (the Eighth 
Company Law Directive).  The Directive includes rules on ownership, independent public oversight, provision of non-audit services, contingent audit fees (prohibited), and rotation of key audit partners for audits of public 
interest entities. 
49 This and the following two paragraphs are based on UNCTAD 2009, Review of practical 
implementation issues of International Financial Reporting Standards:  Impact of the financial crisis, 
TD/B/C.II/ISAR/53, 20 August 2009, p. 1. S/C/W/316 
Page 16  
 
  prudential regulators and emerging markets, through IASB’s constitutional review.  The Progress 
Report on the Actions to Prom ote Financial Regulatory Reform ,
50 issued at the September 2009 G-20 
summit, lists the achievements to date (Annex 9).  
G. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) 
48. The OECD notes that International Financial Reporting Standards (IFRS) are clearly 
becoming global accounting standards.51  They are now firmly establis hed in Europe, Australasia and 
Turkey, and are set to be adopted in Canada, Japan, South Korea and other jurisdictions by 2011.  The 
US is reducing the differences between the US Ge nerally Accepted Accounting Principles (GAAP) 
and IFRS, with the expectation of reaching converg ence by 2011.  Since 2001, almost 120 countries 
have required of permitted the use of IFRS.52  
49. The current economic and financial crisis has  added additional issues to the already wide-
ranging debates on the implementation of IFRS, especi ally those related to financial reporting in a 
distressed economic situation.53  They include such challenges as measurement in illiquid markets, the 
pro-cyclicality of IFRS54, provisioning aspects, and risk manageme nt and related disclosures and audit 
considerations.  One of most important new issues is  how to ensure that the financial reporting system 
not only provides a fair and objective reflection of company’s financial status and performance, but 
also provides early warning signals which can help to  avert major financial disasters. The new issues 
are particularly challenging for those countries w ith less developed financial markets and accountancy 
infrastructure.   
50. The use of high-quality accounting standards a nd practices are vital for the well-functioning 
of markets, for example in evaluating public company performance.55  Global accounting standards, 
i.e. IFRS and International Standards on Auditing (ISA) enhance transparency, while also reducing 
costs.  As previously noted, however, current sta ndards are said to need revision, particularly in 
dealing with off-balance sheet vehicles.56 
51. Accountancy standards can:  ameliorate informa tion and transaction costs, by creating a more 
uniform accounting system;  internalize negative externalities, by setting minimum quality standards 
for accounting services;  and increase the reliability and independence of statutory audits.57  However, 
the benefits of accounting standards depend on their actual content, and their application in practice.58  
                                                      
50 Available online, at http://www.g20.org/Doc uments/pittsburgh_progress_report_250909.pdf. 
51 OECD, 2009, op. cit., p. 41. 
52 Http://www.iasb.org/Use+around +the+world/Global+convergence/IFRS+global+convergence.htm. 
53 For example, as UNCTAD states, "the financial crisis has highlighted tensions between the need for 
expediency in stabilizing economies, and the need for due  process in creating a single high-quality international 
standard" (UNCTAD 2009, op. cit., p. 4).  Established issues already include the complexity of accounting standards;  the need for additional guidance on practical implementation (e.g. valuation of financial 
instruments);  suitability of international accounting st andards for small and medium-sized enterprises;  and 
technical matters such as fair value measurement). 
54 Pro-cyclicality in the event of a financial crisis results from the "mark to market" (fair-value) 
requirement to value financial instruments at current ma rket prices.  See, for ex ample, Rachel Sanderson, Don't 
Waste Chance of a Wider Debate on Fair Value , Financial Times, 27 May, 2010.    
55 OECD 2009, op. cit., p. 9.   
56 As stated by the OECD, "the sub-prime mortgage crisis and the credit crunch have reinforced the 
importance of both a more uniform and (much) more reliable accounting system, especially when taking into account the fact that off-balance sheet vehicles have played a key role in promoting the financial crisis."  (OECD 
2009, op. cit., pp. 39-40). 
57 The OECD notes that use of a single, universally understood accounting standard represents a step 
forward for transparency, not only by making it easie r for investors to compar e companies’ performance 
regardless of their regulatory jurisdiction, but hopefully also by making it easier to ‘tighten’ the accounting  S/C/W/316 
 Page 17 
 
 
  H. INTERNATIONAL STANDARDS ON AUDITING (ISA) 
52. Over 100 countries are either using Internationa l Standards on Auditing (ISA), or are in the 
process of adopting or incorporating them into natio nal auditing standards, or using them as a basis 
for preparing national auditing standards (Table 5).59  ISA are intended for use in all audits — 
publicly traded companies, private business of a ll sizes and government entities at all levels.   
53. ISA are issued by the International Auditing and Assurance Standards Board (IAASB), which 
is a standard-setting body operating independently under the auspices of IFAC.  The IAASB’s goals 
include the setting of high quality auditing, assurance,  quality control and related services standards, 
and to facilitate the convergence of  international and national standa rds, thereby enhancing the quality 
and uniformity of practice throughout the world and strengthening public confidence in the global 
auditing and assurance profession. 
54. A report on ISA, titled Challenges And Successes In Implementing International Standards:  
Achieving Convergence To IFRSs And ISAs , is available on the IFAC website.  The report emphasizes 
that high-quality standards of financial reporting, au diting, and ethics underpin the trust that investors 
place in financial and non-financial information.60   
Table 5:  Basis of ISA Adoption by Jurisdiction, 2009 
Type of Adoption Number of countries/jurisdictions 
Required by Law or Regulation 11 
ISAs are adopted 32 
National Standards are the ISAs 29 
Other 54 
TOTAL  (Countries and Jurisdictions) 126 
Notes:   
- Required by Law or Regulation – Country  law or regulation requires the use of ISAs as issued by the International 
Auditing and Assurances Standards Board (IAASB) in the auditing of general pur pose financial statements. 
- ISA are Adopted – A national sta ndard-setter has adopted ISAs as  the audit standards to be us ed in the country (there are 
no separate local auditing standards). 
- National Standards are the ISAs – While ISAs have generally been adopted as th e local standards, there may be national 
modifications to them but changes, if any, are stated to be in line with the spirit of IAASB Modifications Policy. 
- Other – Refer to specific notes. 
Source :  IFAC (http://web.ifac.org/dow nload/basis-of-isa-adoption.pdf.) 
 
I. IASB 
55. The International Accounting Standards Board (IASB) is an independent standard-setting 
body.61  Its (currently) 15 full-time members are res ponsible for the development and publication of 
International Financial Reporting Standards (IFRS), including the IFRS for SMEs, as well as for approving the Interpretations of IFRS devel oped by the Internati onal Financial Reporting 
                                                                                                                                                                    
 
standards and their world-wide application, limiting the potentially adverse effects of excessive risk-taking and 
off-balance sheet accounting.  In addition, it reduces costs for multinationals that must now prepare multiple books and facilitates greater mobility of auditors, which in  turn might help reduce market concentration as firms 
will have access to a wider pool of talent and a greater volume of resources (OECD 2009, op. cit., p. 41). 
58 As emphasized by the OECD, “distinctions betwee n on-balance sheet and off- balance sheet positions 
of banks and other financial institutions should be abolished or at least reduced to a bare minimum.  One 
suspects that regulatory acceptance of such distinctions until now may ha ve had more to do with political 
lobbying and regulatory capture than with any substantive argument about differences in risk exposure” (OECD 2009, op. cit., pp. 40-41). 
59 http://www.ifac.org/IAASB/.  IFAC notes that the EU is currently considering a process and 
timetable for endorsement of ISAs. 
60 http://www.ifac.org/Members/Source_Files/Othe r_Publications/Wong_Report_Final.pdf (p. 2). 
61 http://www.iasb.org/The+organi sation/IASCF+and+IASB.htm). S/C/W/316 
Page 18  
 
  Interpretations Committee (IFRIC).
62  The IASB consults with re levant stakeholders, including 
investors, analysts, regulators, business leaders,  accounting standard-setters and the accountancy 
profession.   
56. The IASB has initiated several projects in response to the financial crisis, most notably those 
regarding fair value measurement and financial in struments.  In October 2008, the IASB revised 
requirements on the reclassification of certain financial assets from fair value categories to amortized 
cost categories.  The IASB also issued additiona l technical guidance on determination of the fair 
values of financial assets in illiquid or inactive markets.63  That guidance was reinforced by the May 
2009 exposure draft on Fair Value Measurement.  Th e IASB project on financial instruments has 
three phases:  classification and measurement;  impairment;  and hedge  accounting and others.64 
57. The IASB and the US Financial Accounting Standards Board (FASB), at the end of 2008, 
established the Financial Crisis Advisory Group, which was asked to advise both IASB and FASB on 
implications of the financial crisis for standard s-setting, and potential changes in the regulatory 
environment.  In July 2009 the advisory group concluded that the financial crisis highlighted the importance of four principles:  effective financia l reporting;  limitations of financial reporting;  
convergence of accounting standards;  and  st andard setter independe nce and accountability.
65  The 
group also asked what role accounting and audit c ould play in providing early warning signals 
regarding potentially danger ous financial practices. 
J. IFAC   
58. The International Federation of Accountants (IF AC), through its independent standard-setting 
boards, develops internat ional standards on ethics, auditing a nd assurance, education, and public 
sector accounting standards.  It also issues guida nce to support professional accountants in business, 
small and medium practices , and developing nations.66  
59. As noted above, IFAC established a Member  Body Compliance Program as a means to 
evaluate the quality of members' and associates' efforts to meet IFAC membership requirements.67  
The program's primary objective is stated as encouragement and improvement.  A Compliance 
Advisory Panel oversees the implementation and operation of the IFAC Compliance Program, and the 
Compliance Program is itself overseen by IFAC's P ublic Interest Oversight Board (PIOB).  IFAC 
states that the objective of the PIOB is to increase th e confidence of investors and others that IFAC's 
                                                      
62 Meetings of the IASB are held in public and we bcast, and consultative documents are published for 
public comment. 
63 The guidance explained the need to consider all re levant market information,  and acknowledged that, 
in some circumstances, an entity may have to use its own assumptions about future cash flows and risk-adjusted discount rates.  (This and the following paragraph are based on UNCTAD 2009, op. cit., pp. 6-7. 
64 The IASB is proposing two measurement methods (amortized cost and fair value) to be used 
depending on the circumstances.  Amortized cost would be used only when assets have basic features of a loan and are managed on a contractual yield basis.  All other financial instruments are to be measured on fair value 
basis with the fair value option available in ca se of mismatches between assets and liabilities. 
65 During the advisory group’s deba tes a number of specific accounting issues were raised:  valuation 
and measurement in illiquid markets (particularly of fi nancial instruments);  pr o-cyclicality of accounting 
standards;  provisioning, risk management and disclo sures;  and reconciliation between financial reporting and 
prudential regulations.  The advisory group made a number of recommendations in each of these areas. 
66 http://www.ifac.org/About/. 
67 The Statements of Membership Obligations (SMOs) are issued by  the IFAC Board and establish 
requirements for members and associates to promote, incorporate, and assist in implementing international 
standards issued by IFAC and the International Acc ounting Standards Board.  The SMOs also establish 
requirements for quality assurance and investigation and discipline activities.  S/C/W/316 
 Page 19 
 
 
  public interest activities are properly responsive to the public interest.68  The PIOB oversees IFAC's 
Public Interest Activity Committees.69 
60. IFAC's International Ethics Standards Board for Accountants (IESBA) develops ethical 
standards and guidance, and encourages its member bodies to adopt high standards of ethics for their 
members and promote good ethical practices globally.  The Board's website includes the Code of 
Ethics for Professional Accountants  (Code) issued by the IESBA, and resources developed to assist in 
the adoption and implementation of the Code.70 
61. The Developing Nations Committee of IFAC71 provides guidance and other resources to meet 
the needs of the accountancy profession, and seeks development assistance from the donor 
community for the strengthening of the accountancy profession in developing nations.  Their website 
includes guidance and guidelines to assist profess ional accountancy organizations in developing 
capacity and in developing collaborative and mentoring relationships between professional 
accountancy organizations.72   
K. PROMOTING COMPETITION  
62. Although often necessary to ensure quality, regula tions may also have the unintended effects 
of restricting economic competition and limiting tran sparency.  Some regulations may actually be 
inappropriate, and a better balance may need to be struck between the interests served by regulation 
and the need to ensure competition.  Nonetheless , "the need for ethical standards or codes of 
behaviour, and the desirabi lity of high standards of professional competence to ensure integrity and 
public confidence, are unquestionable.  But th e two objectives of promoting competition and 
maintaining professional standards are not necessarily contradictory."73  
63. Quantitative restrictions to entry, advertis ing bans and price regulation (including 
recommended fee scales) typically restrict competition more than is necessary and should be eliminated.  In addition, jurisdictions that gi ve accountancy professionals exclusive rights for tax 
advice and representation might wish to consider wh ether they are truly necessary, given that many 
others do not have such restrictions.
74    
64. With respect to the "Big 4", the OECD observ es that, "promoting entry or expansion of new 
accounting networks into the auditing and accountin g services market for quoted and large companies 
can be beneficial for competition, but will be very  difficult to achieve.  Most of the large publicly 
listed companies appear to be unwilling to switch to a non-Big Four auditor, even though some of the 
                                                      
68 http://www.ipiob.org/.  The PIOB comprises individuals from a number of professions and all 
branches of regulation.  Its ten members were nomin ated by the International Organization of Securities 
Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the World Bank and the European Commission. 
69 These are the International Auditing and Assura nce Standards Board (IAA SB), the International 
Accounting Education Standards Board (IAESB), the International Ethics Standards Board for Accountants (IESBA), and the Compliance Advisory Panel.  The PIOB  also oversees the respective Consultative Advisory 
Groups of the IAASB, IAESB and IESBA. 
70 http://www.ifac.org/Ethics/. 
71 http://www.ifac.org/DevelopingNations/. 
72 Including such publicly available publications as Establishing and Develop ing a Professional 
Accountancy Body  (http://web.ifac.org/publications/developing-nations-committee/good-practice-guidance-20# 
establishing-and-developin). 
73 OECD 1999, op. cit., p. 17.  Another OECD paper, OECD Policy Roundtable, Trade Associations 
2007 , also addresses competition issues involving accounting services (availabl e online, at http://www.oecd.org/ 
dataoecd/40/28/41646059.pdf). 
74 This and the following two paragraphs are based on OECD 2009, op. cit. S/C/W/316 
Page 20  
 
  accounting firms at the intermediate level have be come quite substantial and have already formed 
international networks"
75 (Box 3).   Following the presumption that promoting competition is 
beneficial, the expansion of exis ting intermediate networks could be encouraged.  Mergers proposals 
between small or intermediate ac counting firms should be welcomed  by competition authorities, as 
such they could put competitiv e pressure on the "Big 4".   
65. Promoting the entry of new international accountan cy networks could also be encouraged by 
allowing partnerships and unlimited liability joint stock companies (with restrictions that reduce 
conflicts of interest) in countries where this is not yet allowed.  Research ha s shown that alternative 
ownership and management struct ures, where the control over the audit firms is with external 
investors (not being auditors) is unlikely to signif icantly impair auditor independence in practice.  
Provisions such as Article 3 of the 2006 EU Statut ory Audit Directive, which liberalised ownership 
restrictions over EU audit firms (making it possibl e for local audit firms to be controlled only by a 
majority of auditors), are considered to be supportive of such initiatives.  
 
Box 3.   Large, Non-Big Four Accounting Firms:  BDO International and Grant Thornton 
"There are at least two, and probably more, accounting ne tworks that could potentially be increased in size to 
challenge the Big Four.  For example, the fi fth largest accounting network in the world, BDO International , is 
co-ordinated by BDO Global Coordinatio n BV, incorporated in the Netherlands and with an office in Belgium.  
All of its member firms are again independent legal entities in their own countries (for example, BDO 
CampsObers in the Netherlands, BDO Seidman in the US , BDO Stoy Hayward in the UK, and BDO Kendalls in 
Australia).  The network was founded in Europe in 1963, when accounting firms from the UK, Netherlands, 
Germany, US and Canada combined their knowledge base to form the Binder Seidman International Group.  At 
30 September 2008, BDO was active in 110 countries, employing 44,000 people.  On its website, the fee income 
for 2008 is mentioned, which was US$5.15 billion.  BDO calls itself “the leading challenger to the largest global 
accounting networks”.  In the Nether lands, BDO is the market leader for businesses in the SME sector. 
Another large accounting network is Grant Thornton International , which is active in over 100 countries.  The 
organisation presents itself as “one of the world's l eading organisations of independently owned and managed 
accounting and consulting firms providi ng assurance, tax and specialist advi sory services to privately held 
businesses and public interest entities”.  That is, all of  its member firms are separate national entities, governing 
themselves and also managing their administrative matters independently.  The UK is one of the countries where 
Grant Thornton is particularly strong.  On 1 July, 2007 Grant Thornton UK LLP merged with RSM Robson 
Rhodes, in a bid to become the UK’s fifth-largest accounting and business advisory firm.  Also in Japan, Grant 
Thornton is (according to information presented on its own website) one of the leading audit, accounting, tax 
and business advisory firms serving the needs of public interest entities and privately held businesses.  In the 
Netherlands, however, Grant Thornton presents itself as “a medium-sized accountancy and advice organisation”, 
offering “a full range of services for [privately held bus inesses], medium-sized and small companies as well as 
specialist services for larger nationally and internationally active enterprises”."   
(Source :  OECD, Policy Roundtables, Competition and Regulation in A uditing and Related Professions , 2009, p. 15.) 
 
                                                      
75 OECD 2009, op. cit., p. 22.  See also Bernard Ascher and Albert A. Foer,  Financial Reform and the 
Big 4 Audit Firms, American Antitrust Institute Workin g Paper No. 10-01, January 2010 (available online, at 
http://www.antitrustinstitute.org/archives/files/ AA I%20Working%20Paper%2010-01_010720101109.pdf).   S/C/W/316 
 Page 21 
 
 
  V. NEGOTIATIONS ON ACCOUNTANCY SERVICES AND EXISTING 
COMMITMENTS UNDER THE GATS76 
66. To date, as a result of the Uruguay Round a nd subsequent accessions, 77 WTO Members 
have made commitments in accountancy services.77  Among the professional services as a whole 
(Annex 10),  only engineering services, at 78 Members, has a higher number of GATS commitments 
than accountancy. With respect to taxation services, 53 Members have made commitments.     
67. Although 77 Members have made commitments in accountancy, only 59 made commitments 
in all three major sub-categories (Annex 11).  Five Members did not take commitments in accounting, 
six did not do so in auditing, and 15 declined to  take commitments in bookkeeping services.  It is 
noteworthy that all 21 of the new Members (indicated in bold in the Table) made commitments in all 
three sub-categories.       
68. Of the 77 Members, 70 referred to CPC classifications in their schedule.  In certain cases, 
however, the use of CPC classifications appears to be  unclear.  For example, in some cases a Member 
has listed only "accounting" (or "auditing") in its sch edule, while indicating in parentheses the general 
CPC category (i.e. 862), which covers accounting,  auditing and bookkeeping services.  Another 
Member has listed "accounting and bookkeeping serv ices" while also using the CPC 862 category in 
parentheses.     
69. With regard to the level of commitments, in market access, full commitments for the supply 
of services through commercial presence (mode 3)  were made by 29 per cent of the Members who 
scheduled accountancy services (Annex 12).78  This declines to 14 per cent when horizontally 
applicable limitations are taken into account.  For cross-border supply and consumption abroad 
(modes 1 and 2), the changes are less dramatic, fro m 42 to 38 per cent, and from 53 to 48 per cent, 
respectively.79  For the presence of natural persons (mode  4), which is obviously very important for 
professional services, all Members have inscribed severe limitations.80    
70. As shown in Annex 12, only partial market acce ss and national treatment are typically granted 
in respect to accountancy.  In the case of comme rcial presence, the most  common restrictions 
appearing in Members' schedules are limitations on the type of legal entity permitted, e.g. only 
partnerships or sole proprietorshi ps may be allowed;  limitations on equity participation;  economic 
needs tests;  and restrictions (or even prohi bitions) on the use of foreign company names.81   Mode 4 
restrictions specifically listed under accountancy typically include residency and qualification 
requirements.  In some cases, a number of years of experience in the country concerned is also 
mandated.   
                                                      
76 The following analysis of existing commitments under the GATS is based on information generated by 
the electronic database developed in the Secretariat. 
77 The schedules of the 15 most recent EC Members ar e counted separately, as they have not yet been 
formally integrated into the GATS sc hedule of the European Communities and its Member States.  Aruba, the 
Netherlands Antilles and New Caledonia also ha ve schedules, but are not counted separately. 
78 Such a broad categorization of commitments is nece ssarily very crude and is intended only to provide a 
rough indication.  In practice, the economic impact of a "partial" commitment could be close to that of a full 
commitment if the limitation maintained is minimal;  on the contrary, it could be effectively close to "unbound" if the limitations are very broad and restrictive. 
79 It must be noted, however, that accountancy se rvices purchased abroad might not be accepted for 
satisfying domestic acco untancy requirements. 
80 See Presence of Natural Persons (Mode 4),  Background Note by the Secretariat, WTO document 
S/C/W/301, 15 September 2009. 
81 It should be noted that such evaluation is not always straightforward, as a single measure may have 
restrictive effects in several ways, or may not be easil y classified due to its ambiguity or a large room for 
discretion. S/C/W/316 
Page 22  
 
  71. In many cases, the qualification requirements  and requirements for residency or even 
citizenship listed in schedules affect  multiple modes of supply.  For example, under modes 1, 3, and 4, 
a Member has placed a horizontal market access restriction, for professional services as a whole, that persons seeking to provide professional services must obtain recognition of their professional degree, enrol in the relevant college and establish legal domicile.  
In the case of auditing services, citizenship 
requirements are fairly common in Member schedules,  despite the recent trend to remove them from 
national legislation.   
72. Seven WTO Members have taken MFN exemptions which directly specify either accountancy 
services or professional services in general.82  These MFN exemptions all involve reciprocity 
provisions for the exercise of professional activities.   Additionally, a number of Members have taken 
general MFN exemptions which may have an effect on the accountancy sector, most notably 
preferential access measures for natural persons.  
73. In the context of the current GATS negotiati ons under the Doha Development Agenda, an 
Information Note addressing accountancy services was pr epared by the Secretariat at the request of 
Members.  Its aim is to assist delegations a nd capital-based officials in their assessment and 
consideration of sector- and mode-specific issues raised in the negotiations.83 
VI. CONCLUSIONS   
 
"we certainly need more publicly availabl e and accessible knowledge of the workings 
of international audit practice, the regul atory networks, the forces driving global 
regulatory policy and its impact at the level of practice."  
74. There is an evident mismatch between the national -- and even sub-national -- regulatory 
structures for accountancy firms (including the "Big 4" firms), and the global nature of their biggest 
multinational clients.  This mismatch is accentu ated by differences in national definitions and 
regulatory requirements, leading to the unavailability  of international statistics and the lack of 
compatible financial documentation.84  More recently, concerns have been expressed regarding 
domestic regulatory barriers to trade in accountan cy services which have (usually unintentionally) 
been created as part of national regulatory reforms. 
75. Although the WTO Council for Trade in Services adopted Disciplines on Domestic 
Regulation in the Accountancy Sector  on 14 December 1998, they are not yet legally in effect, 
pending the outcome of the current negotiati ons under the Doha De velopment Agenda.  
Consequently, their effect to date  has apparently been minimal. 
76. While Enron-scale deficiencies in accountancy pr actices have not emerged as major factors in 
the current global economic and financial crisis, neither is it obvious that previously identified 
                                                      
82 The countries are Costa Rica, Dominican Republic, Honduras, Jordan, Panama, Thailand, and 
Turkey (Venezuela's MFN exemption for professional services does not appear to include accountancy). 
83 Other Professional Services , Information Note by the Secretariat, WTO document JOB(05)/206, 21 
September 2005. 
84 As noted in a recent article "we certainly need more publicly available and accessible knowledge of 
the workings of international audit practice, the regulatory networks, the forces driving global regulatory policy 
and its impact at the level of practice."   (Christopher Humphrey, Anne Loft, and Margaret Wood s, The global 
audit profession and the international financial architecture:  Understanding regulatory relationships at a time of 
financial crisis, Accounting, Organizations and Society, 34 (2009) p. 823).    S/C/W/316 
 Page 23 
 
 
  deficiencies have been fully remedied.85  Accounting standards and re gulations have subsequently 
become the subject of renewed attention in  the G-20 and other international fora.       
77. Substantial progress has been made since the prev ious Secretariat Note in the formulation and 
adoption of both International Financial Reporti ng Standards (IFRS) and International Standards on 
Auditing (ISA).  Nonetheless, the G-20 and others have called for a redoubling of efforts to achieve 
full convergence. 
78. The need to ensure competition has led to con cern over preventing the demise of a "Big 4" 
firm in the event of a future accounting scandal, as well as interest in enc ouraging the expansion of 
mid-size firms to compete in th e supply of auditing services to multinationals.  Relevant issues 
include possible liability caps, as well as chang es to current limitations on firm ownership. 
VII. SOURCES OF ADDITIONAL INFORMATION 
 
79. Relevant sources of additional information al so include the followi ng Internet sites: 
-  Association of Accountancy Bodies of West Africa (ABWA) (http://www.abwa-
online.org/) 
 
-  BDO International (http://www.bdointernational.com)  -  Confederation of Asian and Pacific Ac countants (CAPA) (http://www.capa.com.my) 
 -  Deloitte Touche Tohmatsu (http://www.deloitte.com/)  
 
- Eastern Central and Southern African Federation of Accountants (ECSAFA) (http://www.accaglobal.com/ecsafa/)  -  Eurasian Council of Certified Accountants  and Auditors (ECCAA) (http://www.eccaa.org/) 
 
-  Ernst & Young (http://www.ey.com/)  -  Fédération des Experts Comptables Européens (FEE) (http://www.fee.be)
  
 -  Grant Thornton Interna tional  (http://www.gti.org/)  
 
-  Institute of Chartered Accountants of the Caribbean (ICAC) (http://www.icac.org.jm/) 
 -  Interamerican Accounting Association (IAA) (http://www.contadoresaic.org)  
-  Intergovernmental Working Group of Expert s on International Standards of Accounting 
and Reporting (ISAR) (http://www.unctad.org/Te mplates/Startpage.asp?intItemID=2531) 
 -  International Federation of Accountan ts (IFAC) (http://www.ifac.org) (Compliance 
program responses and action plans:  http ://www.ifac.org/ComplianceAssessment/ 
published.php) 
 
                                                     
 
85 As noted by the OECD, "Perhaps the most fundame ntal conflict with audits  is that accountants are 
required to provide an independent opinion that may at times not be in the interest of the client who pays them.  Finding solutions that enhance independence is of crucial importance for those who rely on audits, such as 
investors." (OECD, op.cit., p. 11). S/C/W/316 
Page 24  
 
  -  International Accounting Standard s Board  (IASB) (http://www.iasbc.org/) 
 -  International Organization of Securiti es Commissions (IOSCO) (http://www.iosco.org)  
 -  KPMG International  (http://www.kpmg.com) 
 
-  South Asian Federation of Accountants (SAFA) (http://www.esafa.org/)  -  PricewaterhouseCoopers (http://www.pwc.com)   
- Reports on the Observance of Standards and Codes (ROSC) 
(http://www.worldbank.org/ifa/rosc.html)  -  The Accountant
 (http://www.vrl-financial-news.c om/accounting/the-accountant.aspx) 
 
 
_______________ 
  
   S/C/W/316
 Page 25ANNEXES 
 
Annex 1:  Exports of accounting, auditing, book-keeping and tax consulting services (Balance of Payments basis) 
US$ Million 
   Value Annual Growth (%) 
   2000 2001 2002 2003 2004 2005 2006 2007 2008 2006-08 2007 2008 
1 Albania ... ... ... 0.3 14.7 0. 1 0.6 0.4 10.8 -4 -33 ... 
2 Armenia ... 0.0 0.2 0.2 0.6 0.8 1.1 1.6 1.5 12 45 -6 
3 Austria ... ... ... ... 65.8 70.9  65.2 79.4 92.3 4 22 16 
4 Azerbaijan ... ... ... ... ... ... 0.5 1.6 1.1 ... 220 -31 
5 Bangladesh ... ... 0.6 0.4 0.5 0.9 1.0 1.0 0.9 8 0 -10 
6 Belgium ... ... ... ... ... ... ... 328.5 307.6 ... ... -6 
7 Belarus ... ... ... ... 0.6 1.0 ... 2.4 3.2 23 ... 33 
8 Bulgaria ... ... ... ... 4.3 10.9  12.8 18.7 33.8 29 46 81 
9 Burkina Faso 2.7 4.1 ... ... ... ... ... ... ... ... ... ... 
10 Cyprus ... ... 202.9 23 5.8 271.1 281.8 356.2 475.4 294.8 1 33 -38 
11 Czech Rep. ... 3.0 10 .2 4.7 21.1 12 0.8 171.8 203. 9 315.2 40 19 55 
12 Denmark ... ... ... ... ... 87.3 146.6 172.5 233.9 ... 18 36 
13 Estonia ... ... ... 2.7 4.4 5.1 5.5 9.4 16.3 18 71 73 
14 Finland ... ... 33.7 67 .6 63.9 82.3 44.3  60.8 82.5 3 37 36 
15 France ... ... ... ... ... ... 281.0 321.6 366.2 ... 14 14 
16 FYR Macedonia ... ... 0.5 4.8 8.5 13.7 20.4 23.0 33.5 19 13 46 
17 Georgia ... ... ... ... ... ... ... 0.5 1.6 ... ... 220 
18 Guinea 1.4 1.2 0.8 0.8 ... ... ... 0.2 ... ... ... ... 
19 Hong Kong, China 20.0 30.0 101.0 108.0 111.0 131.0 12 7.0 172.0 ... ... 35 ... 
20 Hungary ... ... ... ... 101.0 136. 8 213.5 348.6 407.7 19 63 17 
21 Italy 157.4 177.1 147.4 160.2 208.6 244.6 373.1 381.3 328.5 6 2 -14 
22 Jamaica ... ... ... ... ... 0.0 0.2 0.2 ... ... 0 ... 
23 Kazakhstan 3.4 3.0 2. 5 3.5 8.9 17.5  18.7 24.3 44.2 22 30 82 
24 Korea, Rep. of ... ... ... ... ... ... 80.0 73.7 106.0 ... -8 44 
25 Kyrgyz Republic ... 3.6 ... ... ... ... ... ... ... ... ... ... 
26 Latvia 2.1 3.0 2.5 4.2 5.7 8.2 11.1 14.4 14.8 13 30 3 
27 Lithuania 4.6 2.5 1.4 1.7 7.2 6.8 6.7 13.6 14.4 9 103 6 
28 Luxembourg ... ... ... ... 502.9 640.0 814.5 1087.8 1332.3 13 34 22 
29 Madagascar ... ... ... 0.1 0.1 0.1 ... ... ... ... ... ... 
30 Malta ... ... ... ... 12.2 ... 25.0 28.1 30.6 12 12 9 
31 Moldova 0.3 0.2 0.3 0.5 0.9 1.1 0.3 1.3 2.0 10 333 54 
32 Mozambique ... ... 4.4 ... ... 8.5 ... ... ... ... ... ...  
  S/C/W/316 
Page 26    Value Annual Growth (%) 
   2000 2001 2002 2003 2004 2005 2006 2007 2008 2006-08 2007 2008 
33 Netherlands ... ... ... ... 1510.0 1707 .5 2358.2 2921.1 3352.8 10 24 15 
34 Netherlands 
Antilles 6.9 10.0 9.5 14.4 15.9 15.0 15 .2 15.5 ... ... 2 ... 
35 Norway 68.0 43.8 41.3 51.3 62.6 100.1 154.1 125.3 148.8 11 -19 19 
36 Pakistan ... ... ... 2.0 4.0 12.0  18.0 12.0 7.0 7 -33 -42 
37 Poland ... ... ... ... 152.0 181. 4 273.1 414.8 503.9 16 52 21 
38 Portugal 115.5 152.9 178.0 264.8 293.5 335.9 464.1 582.3 713.8 12 25 23 
39 Romania 41.0 44.0 ... 74.0 105.0 12.1 14.0 46.0 55.0 -8 229 20 
40 Russian Federation ... 64.5  48.0 57.6 97.0 129.8 161.1 232.9 377.1 18 45 62 
41 Serbia ... ... ... ... ... ... ... 33.7 ... ... ... ... 
42 Singapore 17.0 28.4 58.9 45.9 76.1 167. 9 175.0 247.7 ... ... 42 ... 
43 Slovak Republic ... ... ... ... ... 25 .2 21.6 41.5 31.6 ... 92 -24 
44 Slovenia ... ... ... ... ... ... ... ... 20.0 ... ... ... 
45 Sweden 508.8 474.8 435.7 699.7 761.1 322.5 356.1 485.6 454.4 -6 36 -6 
46 Tajikistan ... ... 0.0 0.0 0.0 0.4 1.4 1.2 ... ... -14 ... 
47 Tonga ... ... ... ... ... ... ... 0.3 ... ... ... ... 
48 United States 366.0 413.0 288.0 233.0 313.0 351.0 739.0 843.0 ... ... 14 ... 
49 United Kingdom ... ... ... ... 1632.1 1976 .8 2441.9 2686.0 2546.0 6 10 -5 
Note: Figures in bold print indicate a break in series. 
Source : IMF and WTO estimates based on national data (August 2009). 
  
   S/C/W/316
 Page 27 
Annex 2:  Imports of accounting, auditing, book-keeping and tax consulting services (Balance of Payments basis) 
US$ Million 
  Value Annual Growth (%) 
  2000 2001 2002 2003 2004 2005 2006 2007 2008 2006-08 2007 2008 
1 Albania ... ... ... 0 19.2 0. 4 0.7 0.1 38.3 9 -86 ... 
2 Armenia 0.2 1.1 1.2 1.2 1.6 1.7 2 2.4 2.9 8 20 21 
3 Austria ... ... ... ... ... ... 65.6 ... ... ... ... ... 
4 Azerbaijan ... ... ... ... ... ... 0.1 0.2 0.5 ... 100 150 
5 Bahamas ... ... 45.7 ... ... ... ... ... ... ... ... ... 
6 Bangladesh ... ... 0.1 0.1 0.2 1.3 0.1 0.4 0.5 12 300 25 
7 Belarus ... ... ... ... 1.1 0.9 ... 1.5 2.7 12 ... 80 
8 Bosnia and Herzegovina ... ... ... ... ... ... 1.1 1.2 1.5 ... 9 25 
9 Bulgaria ... ... ... ... 4.2 6.1 9.6 10 12.6 15 4 26 
10 Burkina Faso 1.8 3.1 ... ... ... ... ... ... ... ... ... ... 
11 Cape Verde 1.1 0.3 0.4 1.7 2.2 ... ... ... ... ... ... ... 
12 Cyprus ... ... 10.2 12.9 24.9 43 .3 39.9 37.4 137.8 24 -6 268 
13 Czech Republic ... 6.6 20.5 26.5 59 .1 110.7 131.1 16 0.6 241.4 19 23 50 
14 Estonia ... ... ... 1.1 1.4 1.6 1.8 3.8 4.4 15 111 16 
15 Finland ... ... 67.6 77.4 94.7 118.9 66 ... ... ... ... ... 
16 FYR Macedonia ... ... 4.5 22.5 30 35.3 39.4 44.3 77.7 13 12 75 
17 Georgia ... ... ... 0.2 0.1 1.2 0.9 0.7 4.5 61 -22 543 
18 Guatemala ... ... ... ... ... 0.1 1 2.2 2.3 ... 120 5 
19 Guinea 6.2 7.6 4.2 1.8 ... ... ... 0.1 ... ... ... ... 
20 Hong Kong, China 21 32 55 75 98 103 112 109 ... ... -3 ... 
21 Hungary ... ... ... ... 35.9 33.4  51.7 54.6 62.5 7 6 14 
22 Ireland 709.9 31.4 43.6  36.1 ... ... ... ... ... ... ... ... 
23 Italy 264.4 239.8 317 468 261 253.3 305.9 336.5 339.6 3 10 1 
24 Jamaica ... ... ... ... 6.8 16.1 18.5 34.5 ... ... 86 ... 
25 Kazakhstan 8.3 5.9 7. 8 9 5.8 11.2 32.8 15 .3 37.9 26 -53 148 
26 Korea, Republic of ... ... ... ... ... ... 26.1 30.1 35.3 ... 15 17 
27 Kyrgyz Republic ... -1.5 ... ... ... ... ... ... ... ... ... ... 
28 Latvia 1 2.8 4.8 9.4 9.3 14.8 17 26.2 34.6 18 54 32 
29 Lithuania 4.1 1.2 1.4 2.6 2.2 3.3 5.2 10.6 7.9 17 104 -25 
30 Madagascar ... ... ... 1.5 0.3 0.2 ... ... ... ... ... ... 
31 Malawi 16 20 18.1 ... ... ... ... ... ... ... ... ... 
32 Moldova 0.3 0.6 0.4 0.3 0.2 0.3 2.5 3.4 4.3 47 36 26 
33 Mozambique ... ... 0.2 1 ... 13.5 ... ... ... ... ... ...  
  S/C/W/316 
Page 28   Value Annual Growth (%) 
  2000 2001 2002 2003 2004 2005 2006 2007 2008 2006-08 2007 2008 
34 Netherlands Antilles 2.9 4.1 2. 9 3.5 5.1 3.4 3. 1 3.6 ... ... 16 ... 
35 Norway 5.1 3.7 9.2 5.3 3.8 7.1 9.1 11.5 11.4 15 26 -1 
36 Pakistan ... ... ... 6 8 3 20 3 4 -8 -85 33 
37 Portugal 155.3 178 155.8 160.4 260.2 258.6 306.1 354.8 377.3 5 16 6 
38 Romania 96 85 ... 144 229 22.8 23.4 27 47 -18 15 74 
39 Russian Federation ... 137. 5 100.1 281.8 232. 5 165.1 191.6 31 4.9 533.1 11 64 69 
40 Serbia ... ... ... ... ... ... ... 36.8 ... ... ... ... 
41 Sierra Leone ... ... 0.2 1 1.8 0.6 2 0.9 ... ... -55 ... 
42 Singapore 19.7 22.9 25.2 25.9 39.7 55.2  84.3 119.1 ... ... 41 ... 
43 Slovak Republic ... ... ... ... ... 38.9 35.2 32.7 ... ... -7 ... 
44 Slovenia ... ... ... ... ... ... ... ... 8.7 ... ... ... 
45 Sweden 641.8 736.3 756.9 1002.8 1098.5 345.8 401 527.7 478.4 -10 32 -9 
46 Tajikistan ... ... 1.4 1.4 1. 2 1.5 10.5 28.4 ... ... 170 ... 
47 United States 531 507 489 560 753 947 1516 1764 2269 ... 16 ... 
Note: Figures in bold print indicate a break in series. 
Source : IMF and WTO estimates based on national data (August 2009). 
 
 
  S/C/W/316 
 Page 29 
 
 
  Annex 3:  Certified Public Accountants, 2009 
Countries Number of 
establishments Sales (US$ Million) Employment Sales (US$) per 
employee 
Argentina 6,571 1,330 67,320 19,754 
Australia 3,800 4,000 38,931 102,744 
Austria 1,506 1,675 15,429 108,542 
Belgium 1,801 1,881 18,456 101,917 
Brazil 33,358 6,670 341,767 19,517 
Canada 5,999 5,503 61,466 89,535 
Chile 3,256 747 33,355 22,383 
China 247,316 19,800 2,533,837 7,814 
Colombia 7,241 926 74,185 12,484 
Czech Republic 1,791 874 18,352 47,637 
Denmark 941 1,268 9,640 131,580 
Egypt 13,716 659 140,529 4,692 
Finland 929 1,073 9,519 112,688 
France 10,013 10,392 102,584 101,298 
Germany 14,095 14,514 144,410 100,502 
Greece 1,790 1,331 18,334 72,573 
Hungary 1,656 563 16,971 33,194 
India 180,292 4,552 1,847,150 2,464 
Indonesia 45,359 2,457 464,723 5,288 
Iran 12,844 1,636 131,595 12,433 
Ireland 962 1,242 9,853 126,050 
Israel 1,304 831 13,363 62,160 
Italy 10,534 8,863 107,922 82,124 
Japan 22,999 18,805 235,636 79,807 
Malaysia 6,000 913 61,469 14,857 
Mexico 19,252 4,306 197,241 21,831 
Netherlands 2,819 3,271 28,883 113,239 
New Zealand 712 464 7,299 63,626 
Norway 978 1,926 10,016 192,300 
Pakistan 26,766 584 274,226 2,129 
Phillipines 14,738 496 150,991 3,282 
Poland 5,926 729 60,714 12,006 
Portugal 1,873 2,103 19,187 109,605 
Russia 26,465 1,066 271,147 3,932 
Saudi Arabia 5,469 7,559 56,036 134,903 
Singapore 934 2,045 9,567 213,799 
South Africa 6,391 680 65,476 10,385 
South Korea 9,907 1,206 101,502 11,878 
Spain 7,871 3,752 80,644 46,530 
Sweden 1,661 6,286 17,020 369,329 
Switzerland 1,471 1,955 15,072 129,690 
Taiwan 4,707 1,881 48,222 38,999 
Thailand 14,218 1,188 145,669 8,156 
Turkey 11,791 2,942 120,802 24,353 
United Kingdom 10,622 9,885 108,826 90,831 
United States 58,613 51,580 525,062 98,237 
Venezuela 4,776 1,317 48,936 26,919 
Note:  Estimates as produced by  a proprietary economic model. S/C/W/316 
Page 30  
 
   
(Industry Definition:  NAICS 541211: Offices of Certified Public Accountants.  This U.S. industry comprises establishments of accountants that  are certified to aud it the accounting records of public and private 
organizations and to attest to comp liance with generally accepted accountin g practices.  Offices of certified 
public accountants (CPAs) may provide one or more of the following accounting services: (1) auditing financial statements; (2) designing accounting systems; (3) preparing financial statements; (4) developing budgets; and 
(5) providing advice on matters related to accounting.  These establishments may also provide related services, 
such as bookkeeping, tax return preparation, and payroll processing.) 
Source :  Barnes Reports, Worldwide Offices of Cer tified Public Accountants Industry, 2010 Edition.
  S/C/W/316 
 Page 31 
 
 
  Annex 4:  Chinese Institute of Certified Public Accountants (CICPA): 
Statistics of Accounting Firms & Practicing Cert ified Public Accountants  (As of May 31, 2006) 
Accounting Firms 
Province Total Number of 
Practicing CPAs Number of Accounting
Firms Number of Branches Partnerships
Beijing 9815 395 13 67 
Tianjin 1222 64 10 6 
Hebei 2606 211 16 33 
Shanxi 2327 241 8 10 
Neimenggu 1032 145 7 81 
Liaoning 3594 360 17 73 
Jilin 1375 133 43 32 
Heilongjiang 2148 231 25 19 
Shanghai 3157 144 26 24 
Jiangsu 3657 360 44 102 
Zhejiang 2605 277 7 90 
Anhui 1563 174 8 61 
Fujian 1733 149 21 19 
Jiangxi 1158 111 27 27 
Shandong 4706 332 64 39 
Henan 3015 336 13 136 
Hubei 3050 318 24 55 
Hunan 2046 133 25 52 
Guangdong 4228 341 29 136 
Guangxi 1012 63 33 25 
Hainan 382 36 1 30 
Chongqing 1096 82 22 11 
Sichuan 4130 304 40 29 
Guizhou 579 53 6 14 
Yunnan 1550 110 14 33 
Tibet 37 7 0 0 
Shaanxi 1621 128 6 11 
Gansu 751 111 3 52 
Qinghai 175 11 14 5 
Ningxia 180 17 9 4 
Xinjiang 1200 66 32 6 
Shenzhen 1955 228 11 149 
Total 69705 5671 618 1413 
Source :  CICPA. 
 
 
 
 S/C/W/316 
Page 32  
 
   Annex 5:  American Institute of Certified Public Accountants (AICPA) Membership 
Figures (compiled as of August 2008) 
Type of Member Number 
Members in Consulting 
Members in Education 
Members in Government 
Members in Business & Industry 
Members in Law Members in Public Accounting 
Retired Members 
Other 10,253 
7,818 
11,682 
134,941 
2,187 
149,395 
23,523 
2,691 
Total Regular Members 342,490 
Total Associate, Student Affiliate, and International Members 17,491 
 Source : AICPA Internet site  (www.aicpa.org). 
 
 
 
 
   
   S/C/W/316
 Page 33Annex 6:  Indicators of Regulatory Conditions in  Professional Service Sectors in 1996, 2003 and 2008 
  Accounting Architecture Engineering  Legal Services Overall 
  1996 2003 2008 1996 2003 2008 1996 2003 2008 1996 2003 2008 1996 2003 2008 
Australia 3.2 1.8 2.1 0.0 0.0 0.0 0.0 0.0 0.6 4.4 2.2 2.2 1.9 1.0 1.2 
Austria 3.5 3.0 2.9 4.4 3.3 2.6 4.4 3.3 2.5 4.3 3.0 2.7 4.2 3.1 2.7 
Belgium 3.5 2.7 2.7 2.6 2.5 2.2 0.0 0.3 0.0 2.7 3.7 3.8 2.2 2.3 2.2 
Canada 3.1 3.2 3.5 3.0 2.8 3.1 2.9 3.2 2.9 3.2 3.2 2.9 3.1 3.1 3.1 
Czech Rep. .. 3.2 2.1 .. 1.7 2.2 .. 2. 3 2.2 .. 3.8 2. 6 .. 2.8 2.3 
Denmark 2.1 1.2 1.5 0.0 0.0 0.0 0.0 0.0 0.0 2.1 2.0 3.3 1.1 0.8 1.2 
Finland 2.4 2.2 2.2 1.0 0.7 0.7 0.0 0.5 0.5 0.0 0.3 0.3 0.8 1.0 1.0 
France 3.0 3.0 2.8 1.8 1.8 2.8 0.2 0.0 0.0 2.3 2.8 2.8 1.8 1.9 2.1 
Germany 5.1 2.8 2.4 3.3 2.9 3.1 3.8 3.1 2.3 4.5 3.6 3.6 4.2 3.1 2.9 
Greece 2.9 2.0 .. .. 2.8 .. .. 2.8 .. 4.9 4. 5 .. .. 3.0 .. 
Hungary .. 2.0 3.6 .. 2.9 3.2 .. 2.1 2.6 .. 3.0 3.8 .. 2.5 3.3 
Iceland .. 2.1 2.1 .. 2.0 1.7 .. 2.3 1.6 .. 1.4 1.8 .. 1.9 1.8 
Ireland 2.0 1.6 .. 0.0 0.7 .. 0.0 0.0 .. 2.8 2.8 .. 1.2 1.3 .. 
Italy 1.4 4.1 4.2 4.3 3.1 3.7 4.0 3.8 3.5 3.6 3.7 3.9 3.3 3.7 3.8 
Japan 3.0 2.2 2.2 2.5 0.9 1.2 2.0 3.4 0.3 3.4 3.3 2.3 2.7 2.4 1.5 
Korea .. 2.0 2.0 .. 2.5 2.5 .. 2.0 2.0 .. 2.6 2.6 .. 2.3 2.3 
Luxembourg 3.3 2.8 3.3 3.1 3.3 4.0 3.2 3.2 4.0 3.1 3.1 2.9 3.2 3.1 3.5 
Mexico 2.8 1.9 1.8 2.3 1.2 1.8 2.6 1.5 1.8 1.7 1.9 1.8 2.3 1.6 1.8 
Netherlands 3.2 2.9 1.9 0.0 0.0 0.0 0.4 1.5 0.0 2.0 2.0 2.9 1.4 1.6 1.2 
New Zealand 2.5 1.3 3.5 1.8 1.5 0.0 2.5 1.5 0.0 3.0 3.3 3.8 2.4 1.9 1.8 
Norway 2.4 1.9 2.5 1.8 0.9 1.2 1.8 1.2 0.6 3.2 2.6 3.2 2.3 1.6 1.9 
Poland .. 2.8 2.8 .. 1.8 2.1 .. 2.1 2.1 .. 3.6 3.7 .. 2.5 2.7 
Portugal 1.9 2.1 2.2 2.0 1.3 2.2 3.7 1.7 2.2 3.4 3.6 3.5 2.8 2.2 2.5 
Slovak Rep. .. 2.2 .. .. 2.6 .. .. 2.4 .. .. 3.7 .. .. 2.8 .. 
Spain 3.1 2.1 1.9 3.5 2.3 2.1 3.0 1.5 1.6 4.0 3.6 2.6 3.4 2.4 2.1 
Sweden 2.5 2.4 1.8 0.0 0.0 0.0 0.0 0.0 0.6 0.8 1.2 0.0 0.8 0.9 0.6 
Switzerland 1.2 0.3 1.8 1.3 0.4 0.7 1.0 0.4 0.4 3.7 3.0 2.1 1.8 1.0 1.2 
Turkey 4.0 4.3 4.3 3.2 2.4 2.4 2.6 2.4 2.4 3.8 4.5 4.5 3.4 3.4 3.4 
UK 3.2 2.1 2.6 0.0 0.0 0.0 0.0 0.0 0.0 2.3 2.1 0.3 1.4 1.1 0.7 
United States 2.6 1.7 1.7 .. 1.5 0.3 2.4 1.6 0.3 2.9 1.9 1.9 .. 1.7 1.1 
Note: Lower scores indicate lo wer levels of restrictiveness (see methodolog y at http://www.oecd.org/dataoecd/25/19/42220487.xls ). 
          The values for Greece, Ireland and Slovak Republic are preliminary. 
Source :  OECD.  S/C/W/316 
Page 34  
 
  Annex 7:  Guidelines for Mutual Recognition Ag reements or Arrangements in the Accountancy 
Sector   
 
 
WORLD TRADE  S/L/38  
  28 May 1997 
ORGANIZATION  
  (97-2295)   
 
Council for Trade in Services  
 
  
GUIDELINES FOR MUTUAL RECOGNITION AGREEMENTS 
OR ARRANGEMENTS IN THE ACCOUNTANCY SECTOR  
 
 
Introduction  
  This document provides practical guidance for governments, negotiating entities or other 
entities entering into mutual recognition negotiatio ns on accountancy services.  These guidelines are 
non-binding and are intended to be used by Members on  a voluntary basis, and cannot modify the rights 
or obligations of the Members of the WTO.  
 The objective of these guidelines is to make it easier for parties to negotiate recognition 
agreements and for third parties to negotiate thei r accession to such agreements or to negotiate 
comparable ones.  The most common way to achieve recognition has been through bilateral agreements.  Article VII of the GATS recognise s this as permissible. There ar e differences in education and 
examination standards, experience requirements,  regu latory influence and various other matters, all of 
which make implementing re cognition on a multilateral basis extremely difficult.   Bilateral negotiations 
will enable those involved to focus on the key issues related to their two enviro nments.  Once bilateral 
agreements have been achieved, however, this can lead to other bilateral agreements, which will ultimately extend mutual recognition more broadly.   Where autonomous recognition is granted, it is  suggested that the WTO be informed of the 
relevant elements in these guidelines for transpar ency purposes.  Such elements could include, for 
example, those covered in sections B.3, B.4(a) and (b), B.5 and B.6. 
  The examples listed under the various sections of these guidelines are provided by way of 
illustration.  The listing of these examples is indicativ e and is intended neither to be exhaustive nor as an 
endorsement of the application of such measures by WTO Members. 
 
  S/C/W/316 
 Page 35 
 
 
  A. Conduct of negotiations and re levant obligations under the GATS 
 
With reference to the obligations of WTO Members under Article VII of  the GATS, this section sets out 
points considered useful in the discharge of these obli gations.  A copy of Articl e VII is annexed to these 
guidelines.  
 
1. Opening of negotiations  
  The information supplied to the WTO should include the following:  
 - the intent to enter into negotiations; 
 
 - the entities involved in discussions (e.g . governments, national organisations in the 
accountancy sector or institutes which have au thority - statutory or otherwise - to enter 
into such negotiations); 
 
 - a contact point to obtain further information; 
 
 - subject of negotiations (specific activity covered); 
 
 - the expected time of the start of negotiations  and an indicative date for the expression of 
interest by third parties. 
 2. Results
 
  On conclusion of an MRA, the inform ation supplied should include the following: 
 
 - the content of the agreement (if a new agreement);   - significant modifications to the agreement (if an agreement already exists).  3. Follow-up actions
 
 
 For WTO Members supplying information unde r paragraph (1) above, follow-up actions 
include ensuring that:   - the conduct of negotiations and the agr eement itself comply wi th the provisions of 
GATS - in particular Article VII; 
  - they adopt any measures and undertak e any action required to ensure the 
implementation and monitoring of the agre ement, on their own account, and by the 
competent authorities, or, in pursuance of Ar ticle I of the GATS, encourage adoption of 
such measures and action by relevant sub-national authorities and by other 
organisations; 
  - they respond promptly to requests fro m other WTO Members seeking to enter into 
MRA negotiations. 
 
4. Single negotiating entity
 
  Where no single negotiating entity exists, Members are encouraged to establish one.  S/C/W/316 
Page 36  
 
  B. Form and content of agreement  
 
This section sets out various issues that may be addressed in any negotiations and, if so agreed, 
included in the final agreement.   It includes so me basic ideas on what a Member might require of 
foreign professionals seeking to take advantage of an MRA.  
 
1. Participants
 
  The MRA should identify clearly:  
 - the parties to the agreement (for example, governments, national accountancy 
organisations or institutes); 
  - competent authorities or orga nisations other than the parties to the agreement, if any, 
and their position in relation to the agreement; 
 
 - the status and area of competence of each party to the agreement.  2. Purpose of agreement
 
  The purpose of the MRA should be clearly stated. 
 
3. Scope of agreement
 
  The MRA should set out clearly:  
 - the scope of the agreement in terms of th e specific accountancy professions or titles and 
professional activities it covers in the territories of the parties; 
  - who is entitled to use the professional titles concerned;   - whether the recognition mechanism is based on qualifications, or on the licence 
obtained in the country of origin, or some other requirement; 
  - whether the agreement covers temporary and/or permanent access to the profession 
concerned. 
 
4. Mutual recognition provisions
 
  The MRA should clearly specify the conditions to  be met for recognition in the territories of 
each party and the level of equivalence agreed between the parties.  The precise terms of the agreement will depend on the basis on which the MRA is founded , as discussed above.  In case the requirements of 
the various sub-central jurisdictions of a party to an MRA are not identical,  the difference should be 
clearly presented. The agreement s hould address the applicability of the recognition granted by one sub-
central jurisdiction in the other sub- central jurisdictions of the party. 
  S/C/W/316 
 Page 37 
 
 
  (a) Eligibility for recognition  
 
(i) Qualifications  
 
 If the MRA is based on recognition of qualifica tions, then it should, wh ere applicable, state: 
 
 - the minimum level of education required (ent ry requirements, length of study, subjects 
studied); 
  - the minimum level of experience required (location, length and conditions of practical 
training or supervised professional practice prior to licensing, fram ework of ethical and 
disciplinary standards); 
  - examinations passed (esp. examina tions of professional competence); 
 
 - the extent to which home country qualific ations are recognised in the host country; 
  - the qualifications which the parties are prepared to recognise, for instance, by listing 
particular diplomas or certif icates issued by certain institutions, or by reference to 
particular minimum requirement s to be certified by the authorities of the country of 
origin, including whether the possession of a certain level of qualification would allow 
recognition for some activities but not others. 
 
(ii) Registration
 
 
 If the MRA is based on recognition of the licens ing or registration deci sion made by regulators 
in the country of origin, it should specify the mechanism by which e ligibility for such recognition may 
be established.  (b) Additional requirements for recognition in the host state ("compensatory measures")
 
  Where it is considered necessary to provide fo r additional requirements, in order to ensure the 
quality of the service, the MRA should set out th e conditions under which those requirements may 
apply, e.g. in case of shortcom ings in relation to qualification requirements in the host country or 
knowledge of local law, pr actice, standards and regul ations.  This knowledge should be essential for 
practice in the host jurisdiction or required because there are differences in the scope of licensed practice. 
 
 Where additional requirements are deemed necessary, the MRA should set out in detail what 
they entail (for example, examinati on, aptitude test, additional practice in the host country or in the 
country of origin, practical training,  language used for examination). 
 5. Mechanisms for implementation
 
 
 The MRA should state:   - the rules and procedures to be used to  monitor and enforce the provisions of the 
agreement; 
 
 - the mechanisms for dialogue and admini strative co-operation between the parties; 
  - the means of arbitration for disputes under the MRA. 
 S/C/W/316 
Page 38  
 
   
  As a guide to the treatment of individual applicants, the MRA should include details on: 
  - the focal point of contact in each party for information on all issues relevant to the 
application (name and addr ess of competent authorities, licensing formalities, 
information on additional requirements which n eed to be met in the host country etc.); 
  - the length of procedures for the processing of  applications by the relevant authorities of 
the host country; 
 
 - the documentation required of applicants an d the form in which it should be presented 
and any time limits for applications; 
  - acceptance of documents and certificates i ssued in the country of origin in relation to 
qualifications and licensing; 
  - the procedures of appeal to or review by the relevant authorities; 
  - any fees that might be reasonabl y required. 
 
 The MRA should also include  the following commitments: 
  - that requests about the measur es will be promptly dealt with; 
  - that adequate preparation time  will be provided where necessary; 
 
 - that any exams or tests will be arranged with reasonable periodicity; 
  - that fees to applicants seeking to take advantage of the terms of the MRA will be in 
proportion to the cost to the host country or organisation; 
 
 - that information on any assistance progr ammes in the host country for practical 
training, and any commitments of the host  country in that context be supplied. 
 6. Licensing and other provisions in the host country
 
 
 Where applicable:   
  - the MRA should also set out the means by  which, and the conditions under which, a 
licence is actually obtained following the establishment of eligibility, and what this licence entails (a licence a nd its content, membership of  a professional body, use of 
professional and/or academic titles etc.).  Any licensing requirements other than 
qualifications should be explained, e.g.: 
   -- an office address, an establishment requirement or a residency requirement;    -- a language requirement; 
 
  -- proof of good conduct  and financial standing; 
   -- professional indemnity insurance;   S/C/W/316 
 Page 39 
 
 
    -- compliance with host country's requi rements for use of trade/firm names; 
   -- compliance with host country ethics (for instance independence and 
incompatibility). 
 
 - in order to ensure the transparency of the system , the MRA should include the 
following details for each party: 
   -- the relevant laws and regulations to  be applied (disciplinary action, financial 
responsibility, liability, etc.); 
 
  -- the principles of di scipline and enforcement of  professional standards, 
including disciplinary jurisdiction and any consequential limitations on the professionals; 
 
  -- the means for ongoing ve rification of competence; 
   -- the criteria for and procedures re lating to revocation of the registration of 
professionals; 
   -- regulations relating to any nationali ty and residency requirements needed for 
the purposes of the MRA. 
 7. Revision of the agreement
 
  If the MRA includes terms under which it can be reviewed or revoked, the details should be 
clearly stated. S/C/W/316 
Page 40  
 
  ANNEX  
 
Article VII  
 
Recognition  
 
1.  For the purposes of the fulfil ment, in whole or in part, of its standards or criteria for the 
authorization, licensing or  certification of services suppliers, and subject to the requirements of 
paragraph 3, a Member may recogni ze the education or experience obtained, requirements met, or 
licenses or certifications granted in a particular country.  Such recognition, which may be achieved 
through harmonization or otherwise, may be based upon an agreement or  arrangement with the country 
concerned or may be accorded autonomously.  2. A Member that is a party to an agreement or a rrangement of the type referred to in paragraph 1, 
whether existing or future, shall afford adequate opp ortunity for other interested Members to negotiate 
their accession to such an agreement or arrangement or to negotiate comparable ones with it.  Where a 
Member accords recognition autonomo usly, it shall afford adequate opportunity for any other Member 
to demonstrate that education, experience, licenses, or  certifications obtained or  requirements met in that 
other Member's territory should be recognized.  3. A Member shall not accord recognition in  a manner which would constitute a means of 
discrimination between countries in the application of its standards or criteria for the authorization, 
licensing or certification of serv ices suppliers, or a disguised restriction on trade in services. 
 4. Each Member shall:  
 (a) within 12 months from the date on which the WTO Agreement takes effect for it, 
inform the Council for Trade in Services of  its existing recognitio n measures and state 
whether such measures are based on agreements  or arrangements of the type referred to 
in paragraph 1;   
  (b) promptly inform the Council for Trade in Se rvices as far in advance as possible of the 
opening of negotiations on an agreement or arrangement of the type referred to in 
paragraph 1 in order to provide adequate oppor tunity to any other Member to indicate 
their interest in participating in the negotia tions before they enter a substantive phase; 
  (c) promptly inform the Council for Trade in Services when it adopts new recognition 
measures or significantly modifies existing ones and state whether the measures are 
based on an agreement or arrangement of the type referred to in paragraph 1. 
 5. Wherever appropriate, recognition should be based on multilaterally agreed criteria.  In appropriate cases, Members shal l work in cooperation with rele vant intergovernmental and non-
governmental organizations towards the establishmen t and adoption of common international standards 
and criteria for recognition and comm on international standards for the practice of rele vant services 
trades and professions.   S/C/W/316 
 Page 41 
 
 
  Annex 8:   Disciplines on Domestic Regulation in the Accountancy Sector   
 
 WORLD TRADE  
ORGANIZATION  S/L/64 
17 December 1998 
 (98-5140) 
Trade in Services  
   
DISCIPLINES ON DOMESTIC REGULATION  
IN THE ACCOUNTANCY SECTOR 
 
Adopted by the Council for Trade in Services on 14 December 1998
 
 
 
I. OBJECTIVES  
1. Having regard to the Ministerial Decision on Professional Services, Members have agreed to 
the following disciplines elaborating upon the provisions of the GATS relating to domestic regulation of the sector.  The purpose of these disciplines is  to facilitate trade in accountancy services by 
ensuring that domestic regulations affecting trade in accountancy services me et the requirements of 
Article VI:4 of the GATS.  The disciplines ther efore do not address measures subject to scheduling 
under Articles XVI and XVII of the GATS, which restri ct access to the domestic market or limit the 
application of national treatment to foreign s uppliers.  Such measures are addressed in the GATS 
through the negotiation and scheduling of specific commitments. 
II. GENERAL PROVISIONS 
2. Members shall ensure that measures not subject  to scheduling under Articles XVI or XVII of 
the GATS,
1 relating to licensing requirements and proce dures, technical standards and qualification 
requirements and procedures are not prepared, adopted or  applied with a view to or with the effect of 
creating unnecessary barriers to trade in accountancy  services.  For this purpose, Members shall 
ensure that such measures are not more trade-restrict ive than necessary to fulfil a legitimate objective.  
Legitimate objectives are, inter alia , the protection of consumers (which includes all users of 
accounting services and the public generally), the qua lity of the service, professional competence, and 
the integrity of the profession. 
III. TRANSPARENCY 
3. Members shall make publicly available, including through the enquiry and contact points 
established under Articles III and IV of the GATS, the names and addresses of competent authorities 
(i.e. governmental or non-governmental entities responsib le for the licensing of professionals or firms, 
or accounting regulations). 
 
                                                      
1 The text of GATS Articles XVI and XVII is repr oduced in an appendix to this document.  S/C/W/316 
Page 42  
 
  4. Members shall make publicly available, or sha ll ensure that their competent authorities make 
publicly available, including through the enquiry and contact points: 
(a) where applicable, information describing the activities and professional titles which 
are regulated or which must comply with specific technical standards; 
(b) requirements and procedures to obtain, re new or retain any licences or professional 
qualifications and the competent authorities' monitoring arrangements for ensuring 
compliance;   
(c) information on technical standards;  and 
(d) upon request, confirmation that a particular professional or firm is licensed to practise 
within their jurisdiction. 
5. Members shall inform another Member, upon re quest, of the rationale behind domestic 
regulatory measures in the accountancy sector, in re lation to legitimate objectives as referred to in 
paragraph 2. 
6. When introducing measures which significantly affect trade in accountancy services, 
Members shall endeavour to provide opportunity for comment, and give consideration to such 
comments, before adoption. 
7. Details of procedures for the review of ad ministrative decisions, as provided for by 
Article VI:2 of the GATS, shall be made public, in cluding the prescribed time-limits, if any, for 
requesting such a review.   
IV. LICENSING REQUIREMENTS 
8. Licensing requirements (i.e. the substantiv e requirements, other than qualification 
requirements, to be satisfied in order to obtain or  renew an authorization to practice) shall be pre-
established, publicly available and objective. 
9. Where residency requirements not subject to  scheduling under Article XVII of the GATS 
exist, Members shall consider whether less trade re strictive means could be employed to achieve the 
purposes for which these requirements were set, taking into account costs and local conditions. 
10. Where membership of a professional organisation is required, in order to fulfil a legitimate 
objective in accordance with paragraph 2, Members sh all ensure that the terms for membership are 
reasonable, and do not include conditions or pre-c onditions unrelated to the fulfilment of such an 
objective.  Where membership of a professional organization is required as a prior condition for application for a licence (i.e. an authorization to practice), the period of membership imposed before 
the application may be submitted shall be kept to a minimum. 
11. Members shall ensure that the use of firm na mes is not restricted, save in fulfilment of a 
legitimate objective. 
12. Members shall ensure that requirements re garding professional indemnity insurance for 
foreign applicants take into account any existing insu rance coverage, in so far as it covers activities in 
its territory or the relevant jurisdiction in its territo ry and is consistent with the legislation of the host 
Member.  S/C/W/316 
 Page 43 
 
 
  13. Fees charged by the competent authorities shall reflect the administrative costs involved, and 
shall not represent an impediment in themselves to practising the relevant activity. This shall not 
preclude the recovery of any additional costs of verification of information, processing and 
examinations.  A concessional fee for applicants  from developing countries may be considered. 
V. LICENSING PROCEDURES 
14. Licensing procedures (i.e. the procedures to be followed for the submission and processing of 
an application for an authorization to practise) shall be pre-established,  publicly available and 
objective, and shall not in themselves constitute  a restriction on the supply of the service. 
15. Application procedures and the related documen tation shall be not more burdensome than 
necessary to ensure that applicants fulfil qualifi cation and licensing requirements.  For example, 
competent authorities shall not require more documents  than are strictly necessary for the purpose of 
licensing, and shall not impose unreasonable require ments regarding the format of documentation.  
Where minor errors are made in the completion of  applications, applicants shall be given the 
opportunity to correct them.  The establishment of  the authenticity of documents shall be sought 
through the least burdensome procedure and, wher ever possible, authenticated copies should be 
accepted in place of original documents. 
16. Members shall ensure that the receipt of an application is acknowledged promptly by the 
competent authority, and that applicants ar e informed without undue delay in cases where the 
application is incomplete.  The competent author ity shall inform the applicant of the decision 
concerning the completed application within a reasonable time after receipt, in principle within six months, separate from any periods in respect of  qualification procedures referred to below. 
17. On request, an unsuccessful applicant shall be in formed of the reasons for rejection of the 
application.  An applicant shall be permitted, with in reasonable limits, to resubmit applications for 
licensing. 
18. A licence, once granted, shall enter into effect  immediately, in accordance with the terms and 
conditions specified therein. 
VI. QUALIFICATION REQUIREMENTS 
19. A Member shall ensure that its competent aut horities take account of qualifications acquired 
in the territory of another Member, on the basis of equivalency of education, experience and/or 
examination requirements. 
20. The scope of examinations and of any other qualification requirements shall be limited to 
subjects relevant to the activities for which authorization is sought.  Qualification requirements may 
include education, examinations, practical  training, experience and language skills. 
21. Members note the role which mutual recogniti on agreements can play in facilitating the 
process of verification of qualifications and/or  in establishing equivale ncy of education.  
VII. QUALIFICATION PROCEDURES 
22. Verification of an applicant's qualifications acqui red in the territory of another Member shall 
take place within a reasonable time-frame, in prin ciple within six months and, where applicants' 
qualifications fall short of requirements, shall result in a decision which identifies additional 
qualifications, if any, to be acquired by the applicant. S/C/W/316 
Page 44  
 
  23. Examinations shall be scheduled at reasonably fre quent intervals, in principle at least once a 
year, and shall be open for all eligible applicants , including foreign and fore ign-qualified applicants.  
Applicants shall be allowed a reasonable period for the submission of applications.  Fees charged by 
the competent authorities shall reflect the administ rative costs involved, and shall not represent an 
impediment in themselves to practis ing the relevant activity.  This shall not preclude the recovery of 
any additional costs of verification of informati on, processing and examinations.  A concessional fee 
for applicants from developing countries may be considered. 
24. Residency requirements not subject to schedu ling under Article XVII of the GATS shall not 
be required for sitting examinations. 
VIII.  TECHNICAL STANDARDS 
25. Members shall ensure that measures relating to technical standards are prepared, adopted and 
applied only to fulfil legitimate objectives.  
26. In determining whether a measure is in confor mity with the obligations under paragraph 2, 
account shall be taken of interna tionally recognized standards of re levant international organizations
2 
applied by that Member.  
                                                      
2 The term "relevant international organizations" refers to international bodies whose membership is 
open to the relevant bodies of at least all Members of the WTO.   S/C/W/316 
 Page 45 
 
 
  APPENDIX  
 
For the purpose of clarity, the text of GATS Articles XVI and XVII is reproduced below. 
 
Article XVI  
 
Market Access  
 
1. With respect to market a ccess through the modes of supply identified in Article I, each 
Member shall accord services and service suppliers of  any other Member treatment no less favourable 
than that provided for under the terms, limitatio ns and conditions agreed and specified in its 
Schedule.3 
 2. In sectors where market-access commitments are undertaken, the measures which a Member 
shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire 
territory, unless otherwise specified in its Schedule, are defined as: 
 
(a) limitations on the number of service supp liers whether in the form of numerical 
quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test; 
(b) limitations on the total value of service transactions or assets in the form of numerical 
quotas or the requirement of an economic needs test; 
(c) limitations on the total number of service ope rations or on the total quantity of service 
output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
4 
(d) limitations on the total number of natura l persons that may be employed in a 
particular service sector or that a service supplier may employ and who are necessary 
for, and directly related to, the supply of a specific service in the form of numerical 
quotas or the requirement of an economic needs test; 
(e) measures which restrict or require specific types of legal entity or joint venture 
through which a service supplier may supply a service;  and 
(f) limitations on the participation of forei gn capital in terms of maximum percentage 
limit on foreign share-holding or the total value of individual or aggregate foreign 
investment.  
                                                      
3 If a Member undertakes a market-access commitment in relation to the supply of a service through 
the mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is 
an essential part of the service itself,  that Member is thereby committed to allow such movement of capital.  If a 
Member undertakes a market-access co mmitment in relation to the supply of  a service through the mode of 
supply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of capital 
into its territory.  
4 Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of 
services.  S/C/W/316 
Page 46  
 
  Article XVII  
 
National Treatment  
 
1. In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set 
out therein, each Member shall accord to services  and service suppliers of any other Member, in 
respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.
5 
 2. A Member may meet the requirement of paragraph 1 by according to services and service 
suppliers of any other Member, either formally iden tical treatment or formally different treatment to 
that it accords to its own like services and service suppliers.  3. Formally identical or formally different treatme nt shall be considered to be less favourable if 
it modifies the conditions of competition in favour of services or service suppliers of the Member 
compared to like services or service suppliers of any other  Member. 
 
_______________ 
 
 
                                                     
 
5 Specific commitments assumed under this Article sh all not be construed to require any Member to 
compensate for any inherent competitive disadvantages wh ich result from the foreign character of the relevant 
services or service supplies.   
   S/C/W/316
 Page 47Annex 9:   Progress Report on G-20 Actions to Promote Financ ial Regulatory Reform, Septembe r 2009:   Accounting Standards 
I.  ACCOUNTING STANDARDS  
48  We have agreed that the accounting 
standard setters should improve standards for the valuation of financial 
instruments based on their liquidity and 
investor’s holding horizons, while reaffirming the framework of fair value 
accounting.  To date, the International Accounting Standards Board (IASB) pub lished in May an exposure draft (proposed accounting standard) 
on fair value measurement that directly in corporates the staff guidance issued in April by the US Financial Accounting Standard s 
Board (FASB) to better identify inactive markets and determine whether transactions are orde rly. Comments are due by end-
September, with the final standard expected in 2010. Also, in June the IASB published a discussion document on the effects of f air 
value gains arising from deterioration in a company’s own credit risk, with comments due by the beginning of September. Based o n 
its review of comments the IASB will decide how to address this issue in its standard or guidance on fair value measurement. Se e 
also Action 50.  
 
49  Accounting standard setters should take 
action to reduce the complexity of accounting standards for financial 
instruments by the end of 2009.  The IASB plans to address the G20 Leaders call for reduced comp lexity of accounting standards for financial instruments through  
the development of three new standards, based on exposure drafts issued in 2009. The IASB plans to issue a final standard on classification and measurement of financial instruments by end 2009 for optional use in 2009 financial statements, and an expos ure 
draft was issued in July 2009, which proposes to reduce the num ber of categories of financial assets and liabilities to two (fa ir value 
and amortised cost). Proposals on the remaining portions of IAS 39 – covering an expected loss approach to provisioning (see below) and hedge accounting – are to be issued by the end of 2009.  
 
50  Accounting standard setters should take 
action to strengthen accounting 
recognition of loan-loss provisions by incorporating a broader range of credit 
information by the end of 2009.  
 The IASB is working to enhance its provisioning standards and guidance on an accelerated basis, including by considering a 
proposed impairment standard based on an expected loss (called an “expected cash flow”) approach to loan loss provisioning for 
issuance in October 2009. The IASB published initial proposals on its website in June to seek input regarding the feasibility o f this 
expected loss approach before it issues an exposure draft in October 2009.  
51  Accounting standard setters should take 
action to improve accounting standards for provisioning, off-balance sheet 
exposures and valuation uncertainty by 
the end of 2009.  On provisioning, see Action 50.  
The IASB is working to enhance the accounting and disclosure st andards for off-balance sheet entities. The IASB plans to finali se 
the consolidation standard by the end of 2009 and the derecognition standard in the second half of 2010.  
VI. In June 2009, the FASB published its final standards, Financial Accounting Statements No. 166, Accounting for  
VII. Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46(R), which change the way  
VIII. entities account for securitisations and sp ecial-purpose entities. The new standard s will impact financial institution  
IX. balance sheets beginning in 2010.  
The IASB is giving further consideration to a possible approach to address significant valuation uncertainty through clarifying  its 
existing guidance on valuation adjustments as part of its plan to finalise its exposure draft on fair value measurement.  
52  Accounting standard setters should take 
action to achieve clarity and consistency 
in the application of valuation and provisioning standards internationally, 
working with supervisors by the end of 
2009.  The IASB published in May 2009 an exposure draft (proposed accounting standard) on fair value measurement that largely 
incorporates the staff guidance issued in  April by the FASB to better identify inactive markets and determine whether transacti ons 
are orderly.  In July 2009 the BCBS proposed to the IASB high-level principles for replacement of IAS 39.   
  S/C/W/316 
Page 48 I.  ACCOUNTING STANDARDS  
53  We call on our international accounting 
bodies to redouble their efforts to achieve a single set of high quality, 
global accounting standards within the 
context of their independent standard setting process; and complete their 
convergence project by June 2011.  
 In addition to the specific international convergence activities noted above, nearly all FSB jurisdictions have programmes 
underway to converge with or adopt the standards of the International Accounting Standards Board by 2012.  
54  The IASB’s institutional framework 
should further enha nce the involvement 
of various stakeholders.  The IASB is working together with supervisors in key areas, including provisioning and valuation, and has had a number of 
meetings with the BCBS on these issues. In addition, supported by  the FSB, the IASB held a meeting with senior officials and 
technical experts of prudential authorities, market regulators and their international organisations to discuss financial insti tution 
reporting issues on 27 August 2009. This meeting included senior representatives from a number of emerging market economies 
that are FSB members.  
 
55  Regulators and accounting standard 
setters should enhance the required disclosure in relation to complex 
financial products by firms to market 
participants. (By end 2009)  
 National authorities have taken, and are continuing to take, step s to encourage firms to provide disclosures consistent with 
international best practice by the Senior Supervisors Group and th e FSB, as appropriate. Firms ha ve continued to enhance their risk 
disclosures in their published annual reports.  
Source :  Progress Report On The Actions To Promote Financial Regulator y Reform Issued By The U.S. Chair Of The Pittsburgh G-20 Summit  – 25 September 2009 
(http://www.g20.org/Documents/p ittsburgh_progress_report_250909.pdf).  
   S/C/W/316
 Page 49Annex 10: Summary of Specific Commitments in Professional Services 
Countries 01.A.a. 01.A.b. 01.A.c. 01.A.d. 01.A.e. 01.A.f. 01.A.g. 01.A.h. 01.A.i. 01.A.j. 01.A.k. Total 
Albania X X X X X X X X X X   10 
Antigua and Barbuda X X X X X     X       6 
Argentina X X   X X             4 
Armenia X X X X X X X X X     9 
Australia X X X X X X X X X     9 
Austria X X X X X X X X X X X 11 
Barbados X             X       2 
Belize               X       1 
Botswana       X X X   X X X   6 
Brazil   X   X X   X         4 
Brunei Darussalam   X           X       2 
Bulgaria X X   X X X   X X     7 
Burundi               X X     2 
Cambodia X X X   X X X X       7 
Canada X X X X X X X         7 
Cape Verde X X X X X X X   X     8 
Chile X X   X X             4 
China X X X X X X X X       8 
Colombia X X X                 3 
Congo RP               X X     2 
Costa Rica               X       1 
Côte d'Ivoire         X             1 
Croatia X X X X X X X X X X   10 
Cuba X X     X             3 
Cyprus   X X                 2 
Czech Republic X X X X X X X X X     9 
Djibouti         X             1 
Dominican Republic X X X X X X X X       8 
Ecuador X X X X X   X         6 
El Salvador X X X X X             5 
Estonia X X X X       X       5 
European Communities X X X X X X X X X X   10 
Finland X X X X X X X   X X   9 
FYR Macedonia X X X X X X X X X X   10 
Gambia X X X X X X X X X X   10 
Georgia X X X X X X X X X     9 
Guinea                 X     1 
Guyana X X   X X     X       5 
Haiti                 X     1  
  S/C/W/316 
Page 50 Countries 01.A.a. 01.A.b. 01.A.c. 01.A.d. 01.A.e. 01.A.f. 01.A.g. 01.A.h. 01.A.i. 01.A.j. 01.A.k. Total 
Hong Kong   X X                 2 
Hungary X X X X X X X X       8 
Iceland X X X X X X X   X   X 9 
India         X             1 
Indonesia       X X X X         4 
Israel X X   X X X X         6 
Jamaica X X X X X   X X   X   8 
Japan X X X X X X X         7 
Jordan X X X X X   X X   X X 9 
Korea   X X X X X X         6 
Kuwait       X X X X         4 
Kyrgyz Republic X X X X X   X X X X X 10 
Latvia X X X X X X X X X X   10 
Lesotho X X X X X X X X X X   10 
Liechtenstein X X X X X X X         7 
Lithuania X X X X X X X X X X   10 
Malawi   X           X   X   3 
Malaysia X X X X X X X X       8 
Maldives   X                   1 
Mexico   X   X X     X   X   5 
Moldova X X X X X X X X X X   10 
Mongolia   X     X             2 
Morocco   X     X             2 
Nepal X X   X X X X   X     7 
New Zealand X X X X X       X     6 
Norway X X X X X X X X X X   10 
Oman X X X X X X X X X     9 
Pakistan         X X   X       3 
Panama X X X X X X X         7 
Papua New Guinea X X   X X             4 
Peru   X   X X           X 4 
Poland X X     X     X X X   6 
Qatar   X X X       X X     5 
Romania X     X X   X         4 
Rwanda X             X       2 
Saudi Arabia X X X X X X X X X     9 
Senegal       X X     X       3 
Sierra Leone X X X X X X X X X X X 11 
Singapore   X X X X     X X   X 7 
Slovak Republic X X X X X X X X X     9  
   S/C/W/316
 Page 51Countries 01.A.a. 01.A.b. 01.A.c. 01.A.d. 01.A.e. 01.A.f. 01.A.g. 01.A.h. 01.A.i. 01.A.j. 01.A.k. Total 
Slovenia X X   X X X   X       6 
Solomon Islands X X   X X             4 
South Africa X X X X X X X X X X   10 
Swaziland         X X   X       3 
Sweden X X X X X X X X X X   10 
Switzerland X X X X X X X X X     9 
Thailand X X   X X   X         5 
Chinese Taipei X X X X X X X   X     8 
Tonga X X   X X X X X X     8 
Trinidad and Tobago X             X X   X 4 
Turkey X X   X X             4 
Ukraine X X X X X X X X X X   10 
United Arab Emirates   X X X X   X   X     6 
USA X X X X X X X         7 
Venezuela X X   X X X X         6 
Viet Nam X X X X X X X   X     8 
Zambia   X           X   X   3 
Total 66 77 53 70 78 50 53 55 43 24 8 577 
Legend:  
01.A.a. Legal Services 01.A.g. Urban Planning and Landscape Architectural Services 
01.A.b. Accounting, Auditing  and Bookkeeping Services 01.A.h. Medical and Dental Services 
01.A.c. Taxation Services 01 .A.i. Veterinary Services 
01.A.d. Architectural Services 01 .A.j. Services Provided by Midwives, Nurses, Physiotherapists 
01.A.e. Engineering Se rvices 01.A.k. Other 
01.A.f. Integrated Engineering Services  
Source :  WTO Secretariat.  
 
 S/C/W/316 
Page 52  
 
  Annex 11:  Summary of Specific Commitments in Accountancy 
The table indicates for each of the three sub-sectors of  the accountancy sector, i. e. accounting, auditing and 
bookkeeping, the Members which have scheduled a specific commitment.  (Additions since the previous Note 
are indicated in bold.) 
 
 Countries Accounting Auditing Bookkeeping Total 
 Albania   X X X 3 
 Antigua and Barbuda X X X 3 
 Argentina X X X 3 
 Armenia X X X 3 
 Australia X X X 3 
 Austria X X X 3 
 Brazil X X X 3 
 Brunei Darussalam  X  1 
 Bulgaria X  X 2 
 Cambodia X X X 3 
 Canada X X X 3 
 Cape Verde X X X 3 
 Chile  X  1 
 China X X X 3 
 Colombia X  X 2 
 Croatia X X X 3 
 Cuba X X  2 
 Cyprus X X X 3 
 Czech Republic X X X 3 
 Dominican Republic X X  2 
 Ecuador X X X 3 
 El Salvador  X X 2 
 Estonia X X X 3 
 European Community X X X 3 
 Finland X X  2 
 FYR Macedonia X X X 3 
 Gambia X X X 3 
 Georgia X X X 3 
 Guyana X X X 3 
 Hong Kong X   1 
 Hungary X X X 3 
 Iceland X X X 3 
 Israel X   1 
 Jamaica X X X 3 
 Japan X X X 3 
 Jordan X X X 3 
 Korea, Republic of X X X 3 
 Kyrgyz Republic X X X 3 
 Latvia X X X 3 
 Lesotho  X  1 
 Liechtenstein X X X 3 
 Lithuania X X X 3 
 Malawi X X  2 
 Malaysia X X X 3 
 Maldives X X X 3 
 Mexico X X X 3 
 Moldova X X X 3 
 Mongolia X   1 
 Morocco X X X 3  S/C/W/316 
 Page 53 
 
 
   Countries Accounting Auditing Bookkeeping Total 
 Nepal X X X 3 
 New Zealand X X X 3 
 Norway X X X 3 
 Oman X X X 3 
 Panama X   1 
 Papua New Guinea X X X 3 
 Peru X X X 3 
 Poland X X X 3 
 Qatar X X X 3 
 Saudi Arabia X X X 3 
 Sierra Leone X X X 3 
 Singapore X X  2 
 Slovak Republic X X X 3 
 Slovenia X X X 3 
 Solomon Islands X X X 3 
 South Africa  X  1 
 Sweden X X  2 
 Switzerland X X X 3 
 Thailand X X X 3 
 Chinese Taipei X X X 3 
 Tonga X X X 3 
 Turkey X X X 3 
 Ukraine X X X 3 
 United Arab Emirates X X X 3 
 USA X X X 3 
 Venezuela X X  2 
 Viet Nam X X X 3 
 Zambia X X X 3 
                                 Total    72 71 62  
Source :  WTO Secretariat. 
 
 S/C/W/316 
Page 54  
 
  Annex 12:   Analysis of GATS Commitments in Accountancy Services:  Comparison with 
Architectural, Engineerin g, and Legal Services  
 (Percentages of full, partial and no commitme nts by sub-sector and by mode of supply) 
Market Access 
(Number of Members 
with Commitments) Cross-border 
Supply Consumption 
Abroad Commercial 
Presence 
 F P N F P N F P N 
Accounting, Auditing 
and Bookkeeping 
Services                      (77 commitments ) 
Sectoral only 
(including horizontal 
limitations)  
 
 
42 
 
38 
  
 
 
36 
 
40  
 
 
22 
 
22  
 
 
53 
 
48  
 
 
36 
 
42  
 
 
10 
 
10  
 
 
29 
 
14  
 
 
70 
 
84  
 
 
1 
 
1 
Architectural Services 
(70 commitments) 
Sectoral only 
(including horizontal 
limitations)  
 
67 
 
61  
 
17 
 
23  
 
16 
 
16  
 
79 
 
71  
 
13 
 
20  
 
9 
 
9  
 
50 
 
29  
 
47 
 
69  
 
 3 
 
3 
Engineering Services 
(78 commitments) 
Sectoral only 
(including horizontal 
limitations)  
 
62 
 
55  
 
22 
 
28  
 
17 
 
17  
 
67 
 
59  
 
21 
 
28  
 
13 
 
13  
 
54 
 
27  
 
44 
 
71  
 
3 
 
3 
Legal Services           
(66 commitments) 
Sectoral only  
(including horizontal 
limitations)  
 
23 
 
20  
 
67 
 
70  
 
11 
 
11  
 
32 
 
27  
 
62 
 
67  
 
6 
 
6  
 
15 
 
6  
 
79 
 
88  
 
6 
 
6 
 Notes: 
 1. F: Full commitment (indicated by "none" in the market access column of the Schedule) 
  P: Partial commitment (limitations inscribed in the market access column of the Schedule) 
  N: No commitment (indicated by "unbound" in the market access column of the Schedule) 
 2. The figures in italics  indicate the percentages taking into account horizontal commitments  applicable to 
all sectors in the schedule. 
 Source :  WTO Secretariat. 
 
__________