Fostering a sustainable economy through accounting and auditing

The Asia-Pacific region is witnessing significant shifts driven by economic growth, technological innovation, and sustainability initiatives. In response to this reality, the ACCA Asia Pacific Dialogue 2024, which took place recently over two days in Hanoi, offered a comprehensive understanding of how these initiatives impact the finance sector and beyond.

With the theme “Pioneering Conversations for a Sustainable Future”, the dialogue, organized biennially by the Association of Chartered Certified Accountants (ACCA), attracted a large number of experts, scholars, and managers in the fields of finance, accounting, and auditing from the Asia-Pacific region. Discussions covered the rise of green finance, the impact of AI and automation, and the importance of ethical leadership in fostering a resilient and inclusive economy.

Weaving the fabric of tomorrow’s success

Addressing the opening, Ms. Helen Brand, Chief Executive of ACCA, noted that the world is facing multiple challenges, including the fragility of global economies, the impact of extreme weather events on public safety and food security, geopolitical tensions and conflict disrupting trade, and the persistent challenge of rising living costs. This means that businesses must recalibrate their supply chain strategies in response to rapidly-changing trading conditions, adding layers of complexity to the economic landscape.

“In this global context, the Asia-Pacific region stands out as a dynamic, strategically vital hub - a bridge and a link between established powers and rapidly emerging players,” she continued. “The Asia-Pacific finds itself at the crossroads of geopolitical tensions and global trade challenges, grappling with the urgency of the climate crisis, and bringing extra incentives for nations to harmonize their economic growth and environmental stewardship. At this pivotal moment, the Asia-Pacific steps into a central role, influencing the global narrative, navigating currents of change, and creating economic structures and setting standards that will endure for generations.”

Impressed by the Vietnamese Government’s serious and systematic intent to build the accountancy profession in Vietnam, and how it has stepped onto the world stage by supporting international standards and regulatory frameworks, Ms. Brand emphasized that this effort has included establishing national professional bodies, enabling Vietnamese accountants to qualify with the highest professional standards. And ACCA has been proud to contribute to many partnerships to make this national progress possible.

In his remarks, Deputy Minister of Finance Vo Thanh Hung highlighted that finance, accounting, and auditing are crucial pillars that shape and drive the economic development of each country and region. Building a solid foundation for economic cooperation and sustainable development requires consensus and collective effort from countries within the region.

In the current context, collaborating in research and developing innovative financial solutions will help address common challenges faced by countries in the region and promote sustainable economic development, Deputy Minister Hung noted. “Therefore, I believe that fostering cooperation between countries in finance, accounting, and auditing not only enhances financial management efficiency, shares resources, and promotes high-quality human resource training, but also creates favorable conditions for sustainable economic development.”

Improving the legal framework and enhancing the capacity of accounting and auditing professionals based on international practices, he went on, is also essential in the process of economic integration and development for each country. It is also necessary to develop training programs that meet international standards and the practical needs of the labor market, ensuring that practicing accountants and auditors are equipped with the required professional knowledge and practical skills. Additionally, fostering collaboration between educational institutions and businesses, as well as international organizations, is encouraged, to share experience and learn advanced training methods.

“As an ambassador here for the past two years, I have witnessed the dynamism of Vietnam’s economy and the enthusiasm of international investors,” H.E. Iain Frew, British Ambassador to Vietnam, told the gathering, noting that the post-pandemic recovery has been robust in sectors like tourism and manufacturing and processing, significantly contributing to growth.

When discussing emerging markets like Vietnam, the Ambassador continued, the focus is often on headline growth, GDP acceleration, and rising incomes. However, this rapid growth must be supported by strong investment in human capital, education, and professional capabilities, particularly in service sectors like accounting and finance. Professional services, including accountancy and finance, drive growth in Vietnam. “As an accountant by training, I know firsthand the value of the profession to economic development,” he said.

Vietnam’s growth story is remarkable within the Asia Pacific context. The shift towards a manufacturing and export-led economy has been key, maintaining impressive trade surpluses with the UK, the US, and the EU. The focus on enhancing free trade agreements supports the export sector, from manufacturing to agriculture. Vietnam aims to move up the value chain into high-tech manufacturing over time. Openness, international integration, and a stable, predictable operating environment have been crucial to its success and will underpin future growth.

“I am optimistic about the future and the partnership with Vietnam and the APAC region,” Ambassador Frew said. “This ACCA Dialogue will provide valuable insights into Vietnam, the region, and how finance and accounting can support economic development.”

Advancing sustainable development in finance and accounting

“This is the first time ACCA has organized the Asia-Pacific Dialogue in Vietnam, because we recognize the importance of Vietnam for future development,” Ms. Brand told the media. “In Vietnam, we see the cooperation of the government as well as the Vietnamese business community striving towards a standardized and professional accounting industry.”

On how to leverage technology to promote sustainability in the finance and accounting sectors, she said that ACCA set a new strategy in April to lead the accounting and auditing industry in coping with global changes, including sustainable reporting. This shift is partly related to technology and partly to sustainability, both acting as twin pillars in this transformation.

To respond to this change, it is necessary to build and enhance capacities, standards, frameworks, and appropriate business strategies. ACCA’s new strategies at this time involve redefining the roles and responsibilities of accountants. Traditionally, accountants needed a deep understanding of finance, but with today’s changes, their role has expanded to creating value. On one hand, how can accountants ensure professional quality and responsibility while also generating value for businesses and helping them become more responsible in their operations and to the surrounding community? This is part of ACCA’s strategy.

Discussing the inadequate development of green finance in Vietnam, Ms. Brand emphasized that this issue extends beyond Vietnam and resonates globally across diverse sectors and industries. A recent report from ACCA delved into the prospective challenges confronting the accounting field and highlights AI as a pivotal opportunity for forthcoming generations of accountants. Accounting has witnessed numerous technological adaptations, ranging from basic computer utilization to contemporary reporting systems. Consequently, accountants must redefine their roles, positioning themselves as value generators. Rather than viewing AI as a challenge, it can be perceived as a platform for accountants to amplify their value proposition.

As the world is confronting several challenges posed by emerging technologies, with the foremost being data management, especially in terms of its analysis and utilization, prominent tech entities like Google, Amazon, and Microsoft consistently underscore the significance of data and the vast opportunities it presents, according to Mr. Pulkit Abrol, Managing Director, Asia Pacific, at ACCA.

All major technological organisations are investing in the Asia pacific region on infrastructure , data storage, and cloud investments and according to estimates these could add up to $500 billion in this decade alone, he noted. Effectively tapping into and interpreting this data underscores the pivotal role of accountants. Hence, it is incumbent upon both public and private entities to proactively enhance the skills and proficiency of their accounting teams, equipping them to adeptly navigate new technologies and optimize data management.

Accounting holds paramount importance in aggregating and articulating data, particularly in decoding documents and reporting on sustainability-related metrics. While sustainability reporting may seem straightforward, its intricacies lie in its ties to environmental factors and emissions data, which serve as the bedrock for impact assessment.

Vietnam’s pledge to reach net-zero emissions underscores the criticality of collecting green and environmental data. To this end, efforts must focus on data collection, cultivating green financing streams, infrastructure development, and, crucially, bolstering the skillsets and professional capabilities of accountants to effectively gather such data.

“Presently, our imperative is to produce reports that adhere to international standards, once again underscoring the pivotal role of data,” Mr. Abrol concluded. “ACCA stands ready to support the Ministry of Finance and relevant regulatory bodies in navigating these evolving landscapes.”