IFAC study shows accountancy strongly linked to prosperity, improved living standards

Study finds accountants contribute a half trillion dollars to global economy

The accountancy profession is strongly linked to national economic growth and improved living standards, and it contributes $ 575 billion annually to the global economy, according to a report by the International Federation of Accountants (IFAC), the global organisation for the accountancy profession.

IFAC Chief Executive Officer Fayez Choudhury said, “This report highlights the scale of the profession’s importance to the global economy. It confirms a particularly exciting economic opportunity in the rapidly developing Asian and South American regions. And the findings verify the profound importance of IFAC’s mission – and that of the global profession – to help strengthen accountancy capacity in developing countries, where accountants have a significant role to play in strengthening the institutions and architecture that will improve peoples’ lives.”

For the first time, IFAC has definitively linked a strong accountancy profession to improved living standards for citizens.

Launched at the Singapore Accountancy Convention today, Nexus 2: The Accountancy Profession – A Global Value Add, a study conducted by the independent Centre for Economics and Business Research (Cebr), found that:

• Global regions with a higher share of accountants in total employment have a higher per capita GDP.
• The correlation between the share of accountants in total employment and the UN Human Development Index (HDI) is even stronger. The HDI measures a number of indicators including life expectancy, years of schooling, and income.
• The global accountancy ecology – which includes members of IFAC professional accountancy organisations (PAOs) as well as people who identify their roles as accountancy or accountancy support – contributes an estimated $ 575 billion gross value added (GVA) annually to the global economy and, of this amount, IFAC PAO members contribute 43%.
• Highly developed countries in North America and Europe dominate the GVA of the global accountancy ecology; Asia’s contribution is third highest.
• There are 640,000 members of IFAC PAOs in Asia – but with an estimated 2.6 million accountants employed in Asia in 2013, a significant opportunity exists to strengthen the profession in a unified voice.

“Professional accountants contribute to better information, reporting, measurement and decision making. When nations have a robust system to track the flow of money in government, within businesses, and between organisations, transparency and accountability are improved, organisations are strengthened, and economies are enhanced,” Choudhury said.

A panel of leading regional and global figures in the accounting profession presented the report’s findings to an audience comprised of leaders in the public and private sectors.

Cebr calculated the gross value added (GVA) of the accountancy sector using official datasets, or where data was poorer, by comparing average wages and then computing GVA per capita across the economy.

IFAC is the global organisation for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing over 2.8 million accountants in public practice, education, government service, industry, and commerce.

Centre for Economics and Business Research Ltd (Cebr) is an independent consultancy with a reputation for sound business advice based on thorough and insightful research. Since 1992, Cebr has been at the forefront of business and public interest research, providing analysis, forecasts and strategic advice to major UK and multinational companies, financial institutions, government departments and agencies, trade bodies and the European Commission.