Lack of 'Trust' is Holding Back Economic Integration in South East Asia, says Chartered Accountants

The latest report from Chartered Accountants Worldwide suggests that a lack of trust is one of the factors holding back the establishment of a flourishing, integrated economy in South East Asia. In Critical Success Factors for Tomorrow’s Business Leaders: Perspectives from South East Asia, the international body of chartered accountants argues that businesses need to develop more of a “corporate conscience” by instilling a set of values within their organisations.

The report follows an international summit held in Singapore where senior CEOs, CFOs and executives, together with the heads of global Chartered Accountancy bodies, discussed the challenging new business agenda facing future finance professionals. The report notes the importance of the ASEAN Economic Community (AEC), created in 2015, which aims to develop an integrated regional economy. It also covers issues ranging from corruption, wide disparities in income distribution and the development of future leaders.

Trust emerged as one of the main factors that need to be addressed to enable South East Asia to achieve its economic goals. The report shows that transparency, corporate governance and recognising the importance of ethics are critical to economic integration and tackling corruption.

Pat Costello, Chairman of Chartered Accountants Worldwide, said: “South East Asia, despite being cohesive from a geographical point of view, is a very multicultural region with not necessarily consistent approaches to ways of doing business. Some staff do not understand the importance of ethics in corporate governance and tend to brush it aside. Unsurprisingly, corruption remains one of the main challenges to achieving the goal of economic integration. Establishing the AEC in 2015 was an important step to developing trade across the region. However, business leaders have to make more of an effort to build trust across the borders and within their organisations."

The report identifies accountancy as a “moral science” and notes that chartered accountants should play the role of “ethical guides”. It draws on the close relationship between the profession and accountability. However, business leaders noted that in South East Asia, this morality is more often reactive than proactive. Accountants have traditionally focussed on preventing things from going wrong instead of building a culture when it becomes natural to do what is right. Changing this approach is critical to building trust across the region and tackling corruption.

The report also examines how nurturing talent and seeking guidance of chartered accountants can help narrow the gaps in economic development and income in ASEAN.

Gerard Ee, President of the Institute of Singapore Chartered Accountants (ISCA), said: “The growth potential in South East Asia is huge. Yet, the benefits may not be spread evenly, which will contribute to the already existing disparities across the region. Training future business leaders is of vital importance here. The AEC aims to establish a ‘resilient, inclusive, people-oriented and people-centred’ economic community’, a goal that chartered accountants could help achieve. Chartered accountants possess the necessary skills to guide transparent and flourishing businesses, contributing to international economic development. As the report notes, there is an anticipated growth in demand for chartered accountants in South East Asia, thanks to their professional expertise. They are also viewed as key to good corporate governance.”

The full report, Critical Success Factors: Perspectives from South East Asia, can be found here: http://www.charteredaccountantsworldwide.com/wp-content/uploads/2015/12/Critical-success-factors-for-tomorrows-business-leaders-Perspectives-from-South-East-Asia.pdf
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Institute of Singapore Chartered Accountants
Contact Betsy Tan on +65 6597 5608 or email betsy.tan@isca.org.sg

Chartered Accountants Worldwide
Contact Magdalena Andrzejewska on +44 (0)20 7920 8718 or email Magdalena.Andrzejewska@icaew.com

Notes to editors:

Chartered Accountants Worldwide
Chartered Accountants Worldwide has been created by the leading institutes of Chartered Accountants from around the world to support, develop and promote the vital role that Chartered Accountants play throughout the global economy. More information on the organisation can be found at www.charteredaccountantsworldwide.com
Chartered Accountants Worldwide Associate membership is open to Chartered Accountancy bodies who:

• refer to their members as Chartered Accountants and legitimately use the Chartered Accountant brand;
• are a member of IFAC or an IFAC Recognised Regional Organisation (e.g., CAPA or PAFA);
• require their members to commit to continuing professional development;
• are committed to working together to promote the Chartered Accountancy brand; and
• can demonstrate how they are improving the quality of the Chartered Accountancy qualification.

About the Institute of Singapore Chartered Accountants
The Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body of Singapore. ISCA’s vision is to be a globally recognised professional accountancy body, bringing value to our members, the profession and wider community. There are over 29,000 ISCA members making their stride in businesses across industries in Singapore and around the world.
Established in 1963, ISCA is an advocate of the interests of the profession. Possessing a Global Mindset, with Asian Insights, ISCA leverages its regional expertise, knowledge, and networks with diverse stakeholders to contribute towards Singapore’s transformation into a global accountancy hub.
ISCA is the Administrator of the Singapore QP and the Designated Entity to confer the Chartered Accountant of Singapore - CA (Singapore) - designation.
ISCA is an Associate of Chartered Accountants Worldwide – supporting, developing and promoting over 325,000 Chartered Accountants in more than 180 countries around the world.
For more information, visit www.isca.org.sg.