Contents
 
  1. Introduction
  2. Framework of variables and developments
  3. The changing role of higher education institutions
  4. Higher education institutions and economic growth
  5. Preserving cultural identity
  6. Liberalization of the professional services sector
  7. The accounting sector and international standards
  8. Qualification and accounting education
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.    Introduction
The world is witnessing rapid and consecutive changes that affect everyone on the globe. Therefore, this special seminar related to professional qualification came as a natural response to these developments that the world must deal with. One of the most important factors in all this is the element of “knowledge” because it is a major contributor to the exponential growth of the human race at the dawn of the 21st century.
 
The topic that I’ll be addressing in this study, related to the main goal behind this seminar, which is namely the new rules that professional qualification must be based on. I will deal with this, by analyzing the relationship between global education on the one hand, and the sectors of productivity and services on the other. This relationship started to take on a new dimension due to the introduction of numerous variables into the economy’s infrastructure and even social structure itself. So it is normal that the sector of higher education is one of the sectors that is directly affected by these sensitive changes, especially since new knowledge-related factors have imposed the necessity that society change its view towards knowledge and its definition. What I would like to show is that social change cannot occur without seriously dealing with the knowledge elements that appeared in the latter half of the twentieth century, which were unprecedented in the history of mankind.
 
 
2.    Framework of Variables and Developments
When the Soviet Union launched the first Sputnik satellite in 1975, it took the world by surprise. The USA felt that it fell behind in this area, and the responsible parties moved swiftly. It became apparent that the American educational system at the time was not up to par with global developments. After that, the USA implemented drastic changes in its educational systems, the most notable of which was introducing modern mathematics into the educational curricula. Today, modern mathematics is a subject that is taught routinely in schools all over the world. 
 
The Arab world is in a similar situation, as all the amazing developments in numerous fields took us by surprise; such as: information technology and telecommunications, liberalization of trade and globalization, and last but not least, the internet. These developments changed the world in an irreversible fashion. It doesn’t require much to realize that the world we live in today at the start of the 21st century is fundamentally different from the pre-information/globalization world.
 
These transformations are breathtaking. I feel that we’re getting tired from trying to catch up with what’s going on around us. Believe me, if we do not move quickly, the world will pass us by. In other words, if we do not take the appropriate steps, we will disappear from the stage of the 21st century. When I say “disappear”, I mean that we will not have any significant role to play, but rather will be followers with no capability to create new activities or having any input in ongoing actions.
 
At numerous events and through many seminars, lectures, meetings and writings, I have called for the necessity of moving swiftly to face the rapid developments. Hamlet’s question takes on a special significance in the Arab world now: “To be or not to be.” Whoever thinks that the question is “To participate or not to participate” is sorely mistaken.  
 
So the bottom line is this: We either move “to be” or don’t move and so we will “not be”. Therefore, I feel somewhat satisfied that this seminar has been convened, at a very appropriate time.
 
Firstly, I’d like to remind all those present that knowledge has never been more important than it is today. The English say that “knowledge is power”, and this is an expression that we can tangibly feel how true it is today. They also say that “a little knowledge is a dangerous thing”, as only partial knowledge does not produce science, civilization or advancement for the society. Whoever arms himself with knowledge must own it; he must have it submit to his will and not vice versa. This is the difference between an erudite and an ignoramus.
 
In the Arab world today, we find ourselves in a situation not too different from that of the US when the Sputnik was launched. Therefore, this seminar on professional qualification should be one of our launching points into the 21st century. This is an opportunity that we must take advantage of to induce social changes that we desire on a broad scale. This is because graduating qualified cadres of researchers, professionals and technicians that excel in their jobs is an absolute and non-negotiable necessity. These cadres are our passport to the world of modern technological advancements.
 
The previous forms of co-existence among communities have diminished. We are living in the post-Cold War era. If the Cold War era was characterized by military alliances, today is characterized by trade agreements and economic blocs. This has become a fact that must be dealt with. It is no coincidence that at the start of the 21st century, globalization has taken shape at two levels: globalization of commerce (and this was represented by the GATT which led to the formation of the WTO), and the globalization of information which is represented in the internet. This means that the period of isolation has gone never to return, thanks to the mobilizing forces in our contemporary world, which are represented by technological changes and the absence of international conflicts on a wide scale. The world today is interrelated through economic and strategic interests. We have moved into a time where we need to depend on one another, and can no longer ignore what happens outside our own borders.
 
The drastic current of change that has flowed throughout our world can take anything in its path. So we can no longer ignore the information revolution, environmental changes and liberalization of trade. We have truly become a world without borders.
This imposes upon us the necessity of inducing specific changes in social structure. The best place to start with this process of change is the higher education institutions. The decision to start with these institutions is no coincidence since they need to adapt to these changes if they are to survive. This means that they need to follow specific strategies to reach their desired goal.
 
In these meetings, we seek to draw the broad outlines for what path higher education in the Arab world can follow through the various researches conducted by participants in this seminar. As Chairman of the Arab Society of Certified Accountants (ASCA), I’ve seen the necessity to seriously deal with the new variables, most importantly of which is the phenomenon of globalization. Globalization is embodied in trade liberalization under the umbrella of the WTO, which aims to liberalize trade in both the fields of commodities and services. It is worth mentioning that the overlap between the two phenomena of the information revolution and globalization of trade is so great that it is difficult to ascertain where one begins and the other ends. For example, services aren’t materialistic things in the literal sense of the word, yet they have tangible and physical effects. Services are certainly one of the forms of trade and they can be delivered or communicated via electronic means from one place to another in a way that directly contradicts the idea of “location” in its spatial sense and leads to the dissolution of borders between nations. 
  
 
3.    The Changing Role of Higher Education Institutions
It may seem to an observer that the role of higher education institutions may not change, on the basis that higher education aims primarily to enhance the role of knowledge by focusing on scientific research tools and graduating cadres of researchers. But the reality of the situation far exceeds this basic image. New variables impose that universities become an inseparable part of the world with the most possible amount of overlapping. In other words, the goal of higher education will be imbued to a large extent with the new factors that form social structure, and these are factors that create new circumstances as a result of the globalization phenomenon and interaction between communities. These variables form elements of social pressure that lead to changing the composition of global education. It is true that universities will provide students with sources of knowledge, but they will do so through the transfer of technology from within the school’s campus to the sectors of production in society. Put differently, the new component that will have the decisive role in adding the quality of modernity to the university is the globalization of benchmarks, which means free exchange of knowledge between societies. This in turn leads to the connection of the higher education institutions with various sectors of society on the one hand, and with the market forces on the other. The important thing is that all this can only occur in a new framework: by utilizing the qualified cadres for research, providing the resources for this research, with the complete freedom to transfer and exchange information.
 
Allow me to elaborate on this through the reality we live in at this moment. The traditional concepts of time and place have changed. This is because the communications revolution has made changes previously unimaginable when it comes to relation of society with time and place. Any event that takes place now anywhere in the world will be known throughout the globe only moments after it happens, if we do not witness it exactly while it is unfolding. Also, the idea of “data retrieval”, which takes many forms for the university student, has changed dramatically. The issue is no longer confined to studying an “important book” or obtaining a “major article” in a certain field. These are things of the past.
From a practical point of view, there isn’t anything that a student needs that he/she cannot get the modern methods of communication. This new situation will change the traditional image of higher education and the means through which knowledge was attained.
 
4.    Higher Education Institutions and Economic Growth
Naturally, the effects of the information revolution on the economy have been enormous. This is not surprising. As I said, it is no coincidence that globalization of information was accompanied with globalization of trade. This definitely leads to changing the traditional relationship between aspects of the economic process itself. In the past, the objective of communities was economic growth and expanding the base of social prosperity through the exchange of goods or producing items via cheap labor and improving competition among contemporary economies. Accordingly, it is no longer possible to fulfill economic growth except through industries that are run by the wheel of knowledge. The direct result of this is that the university calls on societies to invest directly in expanding the knowledge base and human resources. We have come a long way since the time when our main concern was searching for raw materials and cheap labor. Here comes the role of higher education institutions that is not subject to debate: These institutions can play an extremely important role in developing skills, knowledge and imagination that will reap the benefits of global education and at the same time be a productive base that modern economy is built on.
 
 
5.    Preserving Cultural Identity
The first thing one notices when it comes to the information revolution is the dissolution of borders among nations. The natural outcome of this is the dissolution of cultures, which is truly negative, because the dissolution of cultures is totally different from their integration and coalescing into one melting pot. Global integration can only happen through enhancing the cultural identity of every nation and highlighting it and its accomplishments towards civilization which contributed to the progress of humanity and where it has reached. The new framework that we must strive for, is formulating an interaction between national interests and the necessities of globalization. Is it any coincidence that in the WTO agreements, regional economic blocs protect the countries of that region from the effects of a complete lifting of economic barriers? This is a point that I will address later in my discussion on our role in joining the WTO. But suffice to say now that the only way to face the danger of cultural identity erosion is through unity and agreeing to create an Arab economic bloc that protects our national interests and enhances our position in the global economy.
 
6.     Liberalization of the Professional Services Sector
The topic of the WTO is vast and detailed, in addition to the fact that it requires a focused in-depth study by specialists of every aspect of the national economy. What can we say about an agreement that has 22 thousand pages and weighs 176 kilograms? So I will limit my discussion to the general aspects of the agreement’s effect on developing nations in general, and Arab nations in particular.
 
I may not be exaggerating when I say that the signing of the GATT in Marrakesh in April 1994, which resulted in establishing the WTO, is the most important international event that has taken place after the creation of the UN, even though it took place half a century after it was originally agreed to create it.
 
Instead of the WTO being created along with the World Bank and the International Monetary Fund as was decided in the Bretton Woods Agreement of 1944, it went through 8 rounds (of negotiations) that started in 1947 and were Geneva-Annecy-Torquay-Geneva-Dillon-Kennedy-Tokyo-Uruguay. 
 
Almost every commodity in trade was discussed, with the exception of hydrocarbons (i.e. oil!). Discussion expanded to include agriculture, textiles and clothing, and moved on to include a general agreement on trade in services (the GATS), an agreement for investment procedures related to trade (the TRIMS) and an agreement on the trade related aspects of intellectual property rights (the TRIPS). There are many other agreements that cover all aspects of the economy and even all aspects of daily life in every activity whether they are related to aviation, shipping, government purchases policies to support national production, employment, customs or investments. These activities represent global trade whose volume exceeds 10 trillion dollars.
 
I would claim that the world, after the industrial revolution, has entered the information revolution, which means that the future of global growth will be in this sector (of information) that represents 80% of the global national product whereas it only represents 20% of the volume of international trade (in the form of goods and services), which has a volume of 8 trillion dollars of which the USA’s share is one trillion dollars. So cancelling the barriers will lead to growth in this sector in particular. From here comes the importance of this issue for the Arab countries. For example, Egypt is one of the top 30 nations in the world that export services, but Arab nations are an overall importer in the field of the services trade, as is the case in the trade of goods and investment in intellectual property (IP).
 
The number of services sectors covered by the agreement is 155, the most important of which is the financial services sector that includes insurance. I clarified in a speech at an insurance seminar that convened in Bahrain on October 7, 1997 some of the numbers in this field that can be summarized as follows:
 
Volume of daily financial transactions            $ 1.2 trillion
Volume of bank lending                                        $ 6.5 trillion
Total deposits                                            $ 20 trillion
Volume of insurance trade                            $ 2 trillion
Volume of Arab insurance trade                     $ 4735 million
 
This means that the volume of insurance trade in the Arab world is less than 0.25% of global trade in this field, and is actually less than 1 in a thousand as net income after deducing the costs of re-insurance.
 
For comparative purposes, insurance services represent less than 1% of the Arab GNP (Gross National Product), whereas it represents over 8% of the national income in developing countries.
To get a better understanding of the field of services, it is estimated that two-thirds of the workforce in the USA works in this area.
 
Is it any coincidence then that the richest person in the world works in services? Of course, here I’m referring to Mr. Bill Gates. As we know, he does not deal in oil or industry or trade of commodities.
 
Perhaps the significance of our topic is clarified through the fact that the first article in the US constitution states that the authority on all issues related to international trade goes back to Congress. It is fair to say that the origin of the concept of modern free trade goes back to Europe, that sought since 1860 (with the Cobden-Chevalier Treaty), or even before then, to launch what became known as the four freedoms (in trade, services, money and people) to transcend borders. This recent agreement carries the same philosophy and the number of its signing parties has reached 124 nations or more, in addition to China, Honduras and Paraguay.  
 
The convention is characterized by an important feature which has far-reaching consequences. This is the fact that it has legislative authority that exceeds the national legislative authority of each country individually. It also possesses a control mechanism to execute its articles and ensure adherence to them, in addition to imposing penalties on violating states. Further, it has judiciary authority and power for disputes resolution via its accompanying judicial system. The reason for this is that the decisions are taken under the policy of collective consensus or unanimity. This is the reason behind its enormous power, which some may regard as dictatorial in a sense. In addition to all this, there seems to be on the horizon the possibility of a creation of a bloc that includes the WTO, the World Bank and the International Monetary Fund. If true, this will have grave implications, because it means the establishment of a new fully-integrated global economic system that we should study carefully.
 
On the other hand, the outline of the GATS is composed of 29 articles that include some basic obligations, such as:
 
A- Inclusiveness
What is meant by this is that the realm of the agreement covers all services in international commerce regardless of how they are delivered.
 
B- The Principle of National Treatment
The principle applies to all sectors included in its schedule and is subject the conditions in the schedule, but ultimately it makes every state apply the principle of national treatment to services and their importers.
 
C- Most Favored Nation Treatment
This is similar to the principle listed in the GATT, but is related to the services sectors.
 
At this stage, it may be difficult to judge what the presumed effects on the Arab economies will be as a result of liberalizing some services sectors in the Arab countries, and it may also be hard to quantify these effects. However, by realizing that the service agreement entails starting a new round of negotiations (as we have previously alluded to our evaluation of the possible effects on developing nations), it becomes apparent that Arab states need to dedicate their efforts towards researching the impacts of their obligations in services, and objectively and accurately evaluating them. By doing so, they will be afforded the opportunity of formulating a strong negotiating position in the next expected round of talks, which will ensure the avoidance of negative outcomes and the acquiring of certain gains. This will occur as a result of practical experience and expertise accumulated over a 5 year period. Further, interest in the services sectors that are important to Arab nations will be highlighted, and particularly those related to the transfer of employment.
 
As for the field of investment, the Arab countries’ commitment to the relevant agreement regulations, as we previously clarified, will have a positive impact on the average flow of capital to Arab states. This commitment will include a revision for legislations that regulate investment in Arab states, in a fashion that ensures capital whether it is foreign capital or Arab or national. This will also ensure the freedom of flow, movement and recirculation of capital, and exporting it, in addition to discretion with profits according to objective economic controls. 
 
 
Perhaps, what is most important is the appropriate atmosphere that is developed from the Arab States commitments to the provisions of the investment agreement. This atmosphere is conducive for the return of immigrated Arab investments or in some cases those which escaped abroad to the investment markets in the Arab nation.
Such investments face increasing risks and difficulties in major investment markets in Europe and the United States. It is noteworthy, that while Arab investments abroad reach about $ 760 billion, internal Arab investments did not exceed $ 11.7 billion. Possibly, there was a strong justification for these investments in the past to escape to open markets. The objective of capitals is profit, while this appears to be hard to gain in view of the complexities and constraints imposed by the Arab states to capitals, in addition to the far possibility of both foreign and Arab investors being able to benefit from national treatment, even sometimes these difficulties extend to stand in the way of the national capital itself.
 
However, such a justification to go abroad will fade away gradually with the adoption of investment laws in the Arab countries to comply with the provisions of the conventions.
 
Moreover, we shall keep in mind the importance of considering the Arab common interest which goes beyond the narrow interests of the investment process itself. This will happen in light of a new world which seeks to realize one economic bloc and to link the interests of small states to the larger ones. In this new world, there will also be benefiting from the diversity of the relative merits of the various Arab countries, whether these are related to the abundance of employment and raw materials, the presence of a relatively advanced technology and productivity base for some of the Arab professionals, or any of the other advantages that serve the production process. Bear in mind that the most important thing missing in many Arab countries in order to launch the production process, either industrial or agricultural, is funding and not technology. Finance brings technology, or even manufactures it if necessary.
 
The question of reorienting part of the Arab foreign investments into being internal is considered an extremely important and beneficial issue to the Arab states in general. That will help in supporting their self-reliance and reducing the dependence of Arab states on imports from outside the Arab region, whether in goods or services. Importing is usually accompanied by political influences –which we have no time to talk about - especially with the existence of huge production potentials within the Arab countries themselves which have not yet been utilized and must be exploited.
 
While we put the overall assessment of the effects of the Uruguay rounds on Arab economies, we find that there are many views that consider the efforts of reviving the Arab economic integration the appropriate getaway, and perhaps the only, in order to avoid possible negative effects and to take full advantage of the opportunities and benefits.
 
States could formulate, if necessary, a geographic framework that justifies the calling for a bloc. We find that the United States used the Pacific shores between it and Asia, to create an economic bloc with Japan, China and the emerging economies, known as tigers. But that’s not the case for the Arab States; they don’t have to make a geographical framework of the bloc. This framework is already supported by the facts of history, culture, language and religion, and what’s only missing is a physical grouping to make it an evident reality.
 
 
If we noted that the inter-Arab trade does not exceed 8% and the Arab investment of income does not exceed 1.8% of the total Arab investments, then that calls to stop and reconsider, especially in light of the world trade and the new phase of economic and trade activation. Arab States are also entitled to reap the fruits with others. Opening their markets to the outside world only will not satisfy them, but initially between themselves.
 
We conclude from this, that the call to revive the Arab economic integration is not only rational and theoretically accepted, but it is the only option for the future of Arab States to assume a decent place as a nation of 250 million people. All of this must happen in light of the international modern changes represented by the blocs’ donations and the establishment of a world or regional Middle Eastern trade organization and its challenges which there is no room here to talk about them in details.
 
 
7. The Accounting Sector and International Standards
 
Turning now to a subject that is one of the most important topics of the high quality education and its association to the contemporary developments in the areas of trade and information globalization, namely, is the issue of accounting standards and the methods of accounting education.
I have chosen this topic in particular, because accounting is the service sector which will be mainly affected by trade liberalization, and because I can talk about it according to my direct experience in this area.
 
Although business and trade have taken on a global trait, they are still suffering from the lingering effects of the forms in which they were before globalization. For example, the accounting standards used in the United States differ markedly from the standards practiced in European countries. Therefore, it is essential for European companies that wish to be included in the American stock markets to prepare various financial statements. This creates difficulties for the companies since they have to come up with different types of tax, commercial and public statements at different locations. Although the entire world is moving towards globalization, there are many branches of business activities which are still in their old situation. Indeed, there is much to be done before people all over the world can reap the fruits of the new global society.
 
 
In this regard, I should mention that globalization is not only in business and trade, but also it is linked to a number of cultural, social and political issues. But what concern us here are business’s matters then accounting. The accounting was traditionally known as "the language of business and trade."
 
With the view that the world is heading in the line of no return and in an irreversible manner towards the global market, where the movement of goods, services and capital accelerates across borders, there is an urgent need to find means to the business sectors, and government bodies that regulate these sectors, as well as the public, to facilitate the reporting of financial statements of companies and business sectors in a language that is clear and understandable to all.
 
From here arises the need to develop global accounting    standards. Standards are the way to make accounting a reliable language and to represent business sectors with the best representation. Without standards, persons who are studying financial reports will not be able to ensure the safety of them or to give a clear image of the actual situation of the business institution, nor to get out interpretations of those reports without the knowledge of the foundations that have been applied when these reports were created.
 
There are a considerable number of countries which have their own accounting standards. Developed countries, such as the United States and the UK, enacted a number of accounting standards. Those standards are issued by the national accounting bodies, and are used in a myriad of companies, and financial statements are prepared according to them. Investors, lending institutions, banks, shareholders and governmental institutions rely upon those statements in reaching important decisions that are often critical for the companies mentioned.
 
Besides, in the United States there is what is known as recognized accounting standards, under which all accountants work. Although American accounting standards are comprehensive and accurate, they are generally stricter than others. They are not considered international standards and are not recognized in the whole world even though they have strong influence and impact. Therefore, international bodies, such as the International Federation of Accountants (IFAC) and the International Accounting Standards Committee (IASC), worked to set international accounting standards.
 
The problem is that although many countries depend on international accounting standards as their national ones, it has not yet been internationally reached to a mechanism to ensure compatibility between global and national accounting standards.
This leaves the problem existed in the face of global companies and bodies of international activities, in terms that they have mostly to formulate financial statements in many forms to meet the regulatory requirements, which vary from one place to another.
 
Accounting is a professional service, according to this; it is subjected to the World Trade Organization (WTO) and the General Agreement on Trade in Services (GATS) which also falls under the umbrella on the WTO. This provides an appropriate framework for achieving the cherished hope to see, during a shorter period, a greater harmony in accounting standards.
The WTO focuses its efforts regarding accounting on liberalization of trade in accounting services. But it is clear that the organization is also responsible for working to achieve harmony in accounting standards for two reasons: the first is that’s a means to achieve the desired goal of this harmony, and the second is that achieving harmony in accounting standards is important to trade in services.  
 
Another issue relevant is the qualification requirements that must be met in those which provide accounting services. The decision of the WTO regarding professional services states that the working group on professional services must work on “preparation and development of multilateral regulations relating to market access” and “to test and submit reports with recommendations on the necessary regulations to ensure that procedures concerning the requirements and transactions of qualification , technical standards and licensing requirements in the area of professional services do not form unnecessary barriers to trade”
 
Let me, before I plunge into the subject of accounting qualification requirements, to continue on the subject of accounting standards and the need for global standards.
In this regard, I would like to stress that at a time where achieving progress in the development and setting of accounting standards is needed, it should be understood that it is a complex and challenging task. What even makes this process more difficult is that the accounting standards were usually based on the socio-economic and political situation prevailing in a region.
For that, I will briefly explain to you, ladies and gentlemen, the main factors that have historically affected the standard-setting process, which are as follows:
 
 
  1. The state's legal system: In some countries where the Roman system is practiced, such as the case in France, we find that the legal system has organized the way companies operate through a specific law known as ‘Company Law.’ In this case, the law includes detailed items which lay down the requirements of accounting and the preparation of reports.

    In other countries, whose legal system is based on the idea of the general law of the United Kingdom, the system focuses on the laws that have been issued to resolve specific situations and issues, in order to meet the ever-changing need. In this case, we believe that the process of establishing those standards is more like issuing laws, while such laws in other countries are being developed by people who work in the accounting profession of the private sector. In Europe, in particular, the issuance of general policies plays a significant role in the process of creating standards.
  2. The nature and structure of commercial property: There is a considerable difference in accounting standards between countries where the public is the main stakeholder, and countries where the ownership of businesses is concentrated in the hands of banks and other financial institutions. As in this case, the banks could obtain detailed information "from informed sources," thus, the government in its various forms will be alone in being exposed to reports and even that is often limited to the protection of the public's right, collecting taxes and guiding the economic activity. In such countries, the financial reports try to minimize possible tax consequences, and provide an unclear and incomplete image of the company's financial situation.

    Accordingly, there is little probability that the countries where the ownership of stocks is in the hands of its people, have worked on the development of accounting standards that are designed to ensure that the financial reports do provide useful and reliable information at the right time.
  3. The political system and intellectual property balance between the public and private sectors: Public companies often play an important role in the economical development of the country. The preparation of financial reports varies from the private sector to the public one, according to the different needs of those who observe the information contained in the reports. In the case of the public sector, and in countries where the economy is under the control of the government, we believe that influence on the process of establishing standards tends to be much stronger than in other countries. Establishing reports in the countries of governmental dominance is designed to highlight aspects of social and economic development, in addition to its financial nature.
  4. The level of economic progress: In developing countries, we find that certain families, which are often a small group of wealthy aristocracy, tend to own most of the companies. In these countries, governments also dominate a larger number of companies. At the same time, it’s unlikely to find a large number of accountants who are engaged in the profession and also work to develop the professionalism in it. Therefore, the absence of the need and the inability to prepare high-quality financial reports has a strong impact on limiting the capabilities of developing countries to develop accounting standards in the real sense of the word.
  5. The tax system: In some cases, the tax system and its accompanying legislations might have a significant impact on the development of financial reporting standards. For example in the United States, the accounting technique which states that "last received is the first to be issued" is used only for tax purposes if mentioned in the financial reports.
  6. The existence of a professional accounting society: The presence of an active professional accountancy body helps to regulate the registration and examination requirements, work professionally, hold conferences and prepare teaching materials and other types of publications. Furthermore, the society can create the right atmosphere for education and researches, and it can encourage and promote the development of accounting standards and practices, as well as monitoring aspects of compliance to requirements. Under such circumstances, the government may find it more appropriate to entrust the work of establishing standards to professional accountants. But if the accounting profession hasn’t reached a level of development that enables it to achieve all of the previously mentioned tasks, it may become necessary for the government to increase its intervention in the profession and its system.
  7. Offering shares in foreign markets: The need to attract foreign investors, either in the form of direct investment or through investment portfolios, requires an acceptable system for the submission of financial reports in the developing countries.                                                                  

    Sometimes this may be a greater incentive to develop proper accounting standards than in the case where the financial reports must only cover the needs of local companies in the same country.

    As a consequence, we believe that the International Organization for the Financial Reports Commission is a member of the board of directors of the International Accounting Standards Committee (IASC), and has the credit for the accreditation of those standards.
 
 
By reviewing the factors that have affected the standard-setting process, we can see the reason behind the significant differences in the national accounting standards, which often took different forms in different parts of the world. On the other hand and despite the fact that national standards vary according to historical circumstances, it is still not a reason for preventing the possibility of reaching harmonization among them.
While we are moving towards an integrated global economy, we must activate the process of formulating accounting standards which will be officially recognized worldwide. All of that falls under the umbrella of the WTO; however, this organization must join forces with other key organizations responsible for these matters which include: the IFAC, IASC, along with a group of governmental experts who work for the United Nations for Accounting Standards and International Reporting.
At a time when we are seeking to achieve this objective, it is relatively easy for the developing countries to be a part of the new system, as many of them adopted the international accounting standards which were issued by the IASC and considered them their national standards with a simple modification or even without.

But the situation is different for the developed countries, because of their long traditions and practices as we mentioned before. Those countries must accept fundamental changes and adjustments, which is what indeed often happened regarding the liberalization procedures which were based on agreements with the WTO.
 
Despite the many difficulties facing this issue, there has been much progress in global accounting standards and further progress is expected in this area. The faster this is achieved the better the situation will be, since this will facilitate the means of communication and increase the reliability of the financial statements which will consequently be beneficial for both the developing and developed countries.
On the other hand, we’ve come a long way in achieving significant progress with regards to the accounting standards, but the international bodies have ignored vital and relevant issues which are: accounting education and the qualification and accreditation of accountants.
 
 
     8. Qualification and accounting education
 
If we want to achieve success and be able to accomplish what we would wish for, in regards to global accounting standards and global free trade, it is logical to say that there are general standards needed to provide such important services through the framework of accounting qualifications on a global scale. The international accounting bodies have ignored that there is an obvious need for the formulation of a global accounting qualification standard. Therefore, I will introduce to you some of the ideas that affect the aspects of qualification and education within the structure of globalization:
 
  1. Trade in professional services (WTO): If we want to liberalize the trade in professional accountancy services, we will face the need for an approach to assess the levels of professional knowledge accountants within a relative framework. What is happening now is that countries follow different methods for the qualification of accountants, where some of them grant qualification at a higher level.
  2. There is a need for qualified accountants who can provide financial reports corresponding to international accounting standards.
  3. The developing countries face serious problems in the education and qualification of accountants. Consequently, accountants of the developed world will be more qualified than those of the developing countries. As a result, we believe that international companies are not only obliged to bring accountants from other countries, but also the economies of developing countries will be falling in a vicious circle, in which it will be impossible to raise the level of qualification standards because of the lack in the number of people who are able to prepare, publish and practice them.
Whoever examines the above observations, may detect the urgent need for global accountant standards. In the round, which I chaired in 1993 at the United Nations Headquarters in New York, the ISAR Group (a group of experts working for governmental accounting standards and reporting) voted unanimously to prepare global qualification standards and assigned this task to the IFAC. As a result of the reluctance of the federation, the UNCTAD adopted the issue.

The Commission, which I currently chair, developed a program of action that is applicable to a large extent, and it met in Geneva on October, 1997 in order to revise the anticipated world program.

Perhaps the best thing that could be done in this area, is achieving the collaboration between the commission, the federation and the ISAR. We also believe that the federation must be aware that the United Nations Conference on Trade and Development (UNCTAD) is the most important organization within the United Nations, which can work on unifying and harmonizing the accounting standards for all of the companies and bodies.
The developing nations, during the GATT’s negotiations and even up until the WTO foundation, doubted the intentions of both free trade and the developed countries.
Due to the failure of alternatives of the free capitalist market, and even with the continued provision of assistance and aid as well as assurances and offerings of compromises from the developed countries, the developing countries have accepted the signing of the WTO in the hope of making use of the organization’s promise of free trade and prosperity for all member states with the realization that, that was only possible by taking into account the concerns of the developing countries and also by comforting them regarding the matters of their apprehension.
The instinct for self-protection exists in everyone, and of course it’s unimpeachable and can be understood. Therefore, at a time when the WTO attempts to achieve its objectives in globalization, tendencies towards protection policy, as happened with the IFAC, will fall inevitably on the sidewalks. On the other hand, I am aware that there are a sufficient number of supporters of free trade and global economic development. Therefore, we as developing countries can rely on their support in our quest for improvement and progress.
There is no doubt that we will witness the achievement of international accounting standards, as well as a system of global accounting qualification. The establishment of these international standards and its international recognition will work to modernize the accounting profession and bring it into line with the drift towards globalization. When the accounting profession universally spreads, we can hope for even a greater pursuit of a
global economy in the true sense of the word.
 
I have used the accounting profession as a model for my speech, but this model will be applied to all professions and services, and adjusted to the nature of each. The WTO will try to develop a system of trade liberalization in all other professional services just like the system that the organization has set for trade in goods after the negotiations that lasted fifty years. This is occurring while the GATS, under the umbrella of the organization, has laid down the general principles and frameworks for liberalization of trade in services and started to address these during the drafting of conventions for the liberalization of each sector. As you know, agreements for IT, basic telecommunications infrastructure, and finally the financial services including insurance, have been concluded. Work is underway for various other activities.
 
In conclusion, let me be optimistic and say that through our efforts in the international framework, and in line with the requirements of the GATS we’ll soon have access to the results that we seek. Liberalization of trade in services and the globalization of the accounting profession are in the interest of our countries.
 
The nature of the accounting profession does not require a high-technology, such as the investment in IT or space industry, but technology appears in it through the international standards, which require only studying and implementation.
Even this does not need a large investment, because investment and technology of accounting lies in people.   People of the Arab nation have the same efficiency as their counterpart in other states. If we can be beneficiaries of the GATS and the globalization of the accounting profession unlike other activities in the convention, it is, therefore, natural that we’ll face obstruction and resistance to our efforts in this area.
 
But we must recognize that until we achieve our aspirations, the liberalization of trade in services is generally still going in one direction. This situation will not continue for long; the meeting of the WTO in Singapore, gave a clear view of , in relation to the importance of this profession on the economic development, the need to give the priority to trade in accounting services through a global system for qualification.