DePaul University’s College of Commerce has launched the Center for Global Accountancy Education, Benchmarking and Research Center (CGAEBR), which will work to improve financial accounting in the developing world by policing three specific areas: international auditing standards, financial reporting and accounting education.

CGAEBR was formally dedicated at a reception Aug. 7 at the Arlington, Virg. offices of CARANA Corporation, an international economic development firm that has implemented many accounting and audit reform projects in developing nations. The dedication was held in conjunction with the annual meeting of the American Accounting Association in Washington, D.C.

CGAEBR will work closely with established international aid and development agencies including the World Bank, the International Monetary Fund and the United States Agency for International Development (USAID). In recent decades, the agencies have invested billions of dollars in the economies of the developing world, but frequently have been unable to determine whether investments yielded appropriate returns because of lax or non-existent accounting standards.

“Before you can build a developing nation’s economy, you have to have a viable accounting system in place to measure whether progress is truly being made,” says John Ahern, a veteran DePaul professor of accounting who will lead CGAEBR. “It is a tremendous challenge. But meeting it will add immeasurably to the developing world’s ability to attract foreign capital, grow their economies and reduce poverty.”

The nucleus of the Center was bourn amidst the financial crises of Russia and Southeast Asia in the late 1990s and the corporate accounting scandals in the U.S. several years later. Early research into accounting education in the developing world was started in 2002 by Gert Karreman of Leiden University in The Netherlands.

To date, the benchmarking initiative has been funded by USAID, which has been working to raise the bar for financial accountability in the developing world. When the time came to establish a permanent center to continue the work of the CARANA benchmarking project, DePaul was immediately considered a natural home given DePaul’s faculty bench strength in international accounting – including Ahern and Belverd Needles, author of one of the leading texts on international auditing.

The efforts have also been supported by Dutch-based international accounting giant KPMG, which supplied its proprietary data base management and analysis tool, QUBUS, to the effort.

“DePaul has a good track record in international accounting issues,” Karreman says. “This is a long-term effort and the only way to make the project sustainable is to have it at a university with a truly international focus.”

Going forward, CGAEBR will partner with the International Federation of Accountants (IFAC), a New York-based organization representing over 160 professional accounting bodies in 120 countries. With IFAC, the Center will work to benchmark individual countries' performance against international standards. The Center will monitor how well professionals keep up with evolving standards and continuous professional education. After establishing benchmarks, work will focus on how well each individual country meets its goals.

“DePaul’s commitment to developing stronger accounting standards and practices for the developing world fits perfectly with both our Vincentian mission and the increasingly international focus of the College of Commerce,” said Kevin Stevens, interim director for the School of Accountancy and Management Information Systems.

This intensive benchmarking effort was recently completed for the Balkan countries, including Albania, Bulgaria, Romania and the states of the former Yugoslavia. Ultimately, this benchmarking process will be completed and maintained for all member countries in IFAC with DePaul assisting in the design and implementation of the research projects while IFAC sets the standards and maintains underlying data bases.

Concurrently, as the evaluation process for each of these countries progresses, programs to help develop the accounting profession among IFAC member institutions and close the gap will be designed and implemented.