, 000 members, is the second largest accounting institution in the world. it is not sufficient that the institute merely responds to and adopts global standards. it should, in fact, go further and actively participate in the formulation of these standards. 14. i am happy to learn that the president of icai has recently been elected as a member of the board of the international federation of accountants ( ifac ) and that there is an indian member on the iasb. i also want to commend the institute for its active participation and involvement in several international committees and projects aimed at improving accounting systems and processes. i would only urge that going forward, icai should proactively take the lead in the formulation of accounting standards in areas where we have specific concerns as an emerging market economy ( eme ). 15. another task the profession needs to address in regard to managing globalization is how it will select, from within its membership, persons of the requisite competence to participate in the global forums, and how it will provide them both financial and professional support to make this participation rewarding to them individually and to the profession more broadly. needless to say, the process of selection of persons for representing the institute in international forums should be strictly meritocratic and transparent. information technology ( it ) 16. next on my list is the challenge of information technology. in the past, one of the main objectives of audit was ensuring the arithmetical accuracy of financial statements. with the advent of it, this task has now been taken over by machines. this has both nudged and facilitated the profession to move up the value chain. the main task of the profession has now shifted to judgments of value, and to discharge this task, auditors have to demonstrate much higher levels of maturity, integrity, independence and balanced judgment. the development of these qualities will be a major challenge in the future. 17. let me make a comment with regard to it in banking. over the past decade, most commercial banks have successfully implemented core banking solutions. this has created both opportunities and challenges for auditors. challenges come by way of lack of visible evidence, risk of undetected system errors and bugs and frauds hidden in a labyrinth of data. retrieving information in the computerized environment and assessing the implementation of computer related processes will also be critical to the audit process. opportunities come by way of increasing use of computer assisted audit tools ( caats ) to access databases beneath the accounting software to create queries, write

jan f qvigstad : lessons from the crisis for monetary policy and financial stability speech by mr jan f qvigstad, deputy governor of norges bank ( central bank of norway ), at the annual money, macro and finance conference, limassol, 3 september 2010. * * * first i would like to thank you for inviting me and giving me this opportunity to comment on lessons from the crisis. i will concentrate my talk around three lessons and two questions. what i am going to highlight is by no means revolutionary, rather it reflects a growing consensus on experiences from the crisis. 20 minutes only allows me to briefly touch on the different subjects. for a more in depth analysis and discussion of similar issues that i raise here today, i can recommend the jackson hole paper by charles bean et. al. transmission mechanism was affected by the financial crisis the first lesson is that monetary policy is more than setting the key policy rate. we also need to monitor the transmission mechanism closely. the transmission mechanism was affected by the financial crisis. constraints on banks ’ access to funding and a heightened level of perceived risk led to higher lending margins and higher bond spreads. the chart shows developments in our key policy rate and banks mortgage lending rates from august 2007 to november 2008. the widening spread between these two interest rates was not unique to norway, but occurred in several countries. banks also tightened their credit standards in response to the crisis. in norway, as in most other countries, this was particularly distinct for credit to enterprises. both higher spreads and tighter credit standards can have potentially strong contractionary effects on the economy and needed to be counteracted. liquidity and capital support was necessary to restore credit flows the contractionary forces from the financial sector were addressed by providing liquidity and capital to banks, through both regular and unconventional instruments in many countries. government actions enabled banks to continue to provide credit to households and enterprises. the crisis demonstrated that the transmission mechanism is important for the effectiveness of monetary policy. it also demonstrated that the relationship between price stability and financial stability must be given due attention. in norges bank there is close integration between the two areas norges bank monetary policy and norges bank financial stability. norges bank financial stability participates at all meetings in the monetary policy process. this ensures that sufficient attention is given to developments in the financial system. it also provided the necessary insight to make wellinformed assessments of the transmission mechanism during the crisis. considerable revision of the interest rate forecast during the crisis the