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International Investment

4. A Secretariat, headquartered in New York City, that BIBLIOGRAPHY
provides overall direction and administration. Choi, Frederick D. S., Frost, Carol Ann, and Meek, Gary K.
(2002). International Accounting (4th ed.). Upper Saddle
5. Technical Committees and Task Forces that carry on River, NJ: Prentice-Hall.
the work of IFAC. Each issues professional guide- Gruner, John W., and Salter, Stephen (2003). “Building a Cohe-
lines and relevant documents. sive Accountancy Profession.” In Frederick D.S. Choi (ed.),
International Accounting and Finance Handbook (3rd ed.).
New York: John Wiley and Sons.
COMMITTEE ACTIVITIES
Six standing committees make up the backbone of the
Frederick D. S. Choi
IFAC:
1. Education Committee: issues guidelines on entry-
level and continuing professional education require-
ments, including prequalification, formal education, INTERNATIONAL
tests of professional competence, practical experi- INVESTMENT
ence requirements and continuing education.
International business is not a new phenomenon; it
2. Ethics Committee: promotes a current code of ethics extends back into history beyond the Phoenicians around
for accountants. 1200 B.C.E.. Products have been traded across borders
throughout recorded civilization, extending back beyond
3. Financial and Management Accounting Committee:
the Silk Road that once connected East with West from
works to increase financial and management Xian to Rome. The Silk Road was probably the most
accountants’ awareness of their professional respon- influential international trade route of the last two millen-
sibilities via publications, sponsored research, and
nia, literally shaping the world as it is known today. For
forums for the exchange of ideas. example, pasta, cheese, and ice cream, as well as the com-
4. Public Sector Committee: produces guidelines and pass and explosives, were brought to the Western world
studies of international applicability to national, from China via the Silk Road.
regional, and local governments and related agen- What is relatively new—beginning first with large
cies. U.S. companies in the 1950s and 1960s, second with
European and Japanese companies in the 1970s and
5. Information Technology Committee: assesses and
1980s, and third with companies from emerging
relates the impact of information technology on
economies in Asia and Latin America in particular—is the
accountant’s roles and responsibilities.
large number of companies engaged in international
6. Membership Committee: strives to increase IFAC’s investment with interrelated production and sales opera-
membership and maintain stringent membership tions located around the world. At no other time in eco-
criteria. nomic history have countries been more economically
interdependent than they are today.
IFAC’s Council occasionally appoints special task
Although the second half of the twentieth century
forces to address important issues. Task forces from the
saw the highest sustained growth rates of gross domestic
recent past include those on Anti-Corruption; Legal Lia- product (GDP) in history, the growth in the international
bility; Quality Assurance; and Rebuilding Public Confi- flow of goods and services has consistently surpassed the
dence in Financial Reporting. growth rate of the world economy. Simultaneously, the
IFAC has close ties with other international organiza- growth in international financial flow—including foreign
tions such as IASC and the International Organization for direct investment, portfolio investment, and trading in
Securities Commissions (IOSCO). The financial state- currencies—has achieved a life of its own. Daily interna-
ments of an increasing number of companies are being tional financial flows exceed well over $1 trillion in the
audited in conformity with IFAC’s International Stan- early twenty-first century.
dards on Auditing. Thanks to trade liberalization, heralded by the Gen-
Further information on IFAC, its membership, activ- eral Agreement on Tariffs and Trade and its successor, the
World Trade Organization, the barriers to international
ities, pronouncements and publications can be secured
trade and financial flows keep getting lower in an era of
from the IFAC Web site, http://www.ifac.org.
globalization. The emergence of competitive European
SEE ALSO Accounting; International Accounting Stan- and Japanese multinational companies, followed by
dards emerging-economy multinational companies, has given

412 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION