Global Accountancy Development Institute (GADI)

Global Accountancy Development Institute (GADI)

Welcome to the site of the Global Accountancy Development Institute (GADI). GADI conducts research into the developmental level of the accountancy profession. Accountancy education is one of the main building block of the development of the accountancy profession, hence our first research focus on education. This site presents our findings as well as central research objective, international cooperation, selection of countries and regions, access to the publication, and contact details.

Please note that we are continuously updating and enriching the information that is contained here. Although we double-check this information, there may still be inaccuracies or misinterpretations. In case you notice any inaccuracy or misinterpretation, please help us by notifying us here.

The need to "Restoring the trust"

As we all know, we are living in a time frame in which boundaries disappear and globalization is the key word. Business is driven by global markets. Global financial markets are asking for global financial statements with an auditor’s opinion. Over the last decade, more and more auditors were confronted with the globalization of their clients and had to rely on the work of other auditors in other jurisdictions than their own. To rely on the work of those auditors the group-auditor has to have enough knowledge about the quality of the work of the other auditor, called the component auditor. To get those knowledge the group auditor should have among others an understanding of the environment the component auditor is working in, the relevant rules and regulations that apply in that jurisdiction and the education required to get a license in that jurisdiction.

It goes without saying that auditors around the globe do not work in the same environment, do not have to comply with the same rules and regulations and do not have the same level of education before they can apply for an audit license. That is even in case of audit firms with global connections, strict or loose organized in networks. So as a consequence of globalization a very important question arises namely: “To what extend can an auditor rely on the work performed or an opinion issued by another auditor in another jurisdiction”.

This question of globalization was discussed in the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) during the clarity project. At the same time some cases related to this question were taken to court. The question became one of the leading principles in redrafting the International Standard on Auditing (ISA) 600: Special Considerations-Audits of Group Financial Statements (Including the Work of Component Auditors).

Introduction section paragraph 4 states that:

‘………… the group engagement partner is required to be satisfied that those performing the group audit engagement, including component auditors, collectively have the appropriate competence and capabilities’.

Followed by the requirement in paragraph 19:

‘If the group engagement team plans to request a component auditor to perform work on the financial information of a component, the group engagement team shall obtain an understanding of the following:

  • Whether the component auditor understands and will comply with the ethical requirements that are relevant to the group audit and, in particular, is independent.
  • The component auditor’s professional competence.
  •  Whether the group engagement team will be able to be involved in the work of the component auditor to the extent necessary to obtain sufficient appropriate audit evidence.
  • Whether the component auditor operates in a regulatory environment that actively oversees auditors’.

In practice it will be a very difficult task for the group engagement partner to comply with the requirements in ISA 600 paragraph 19 for the following reasons:

  • The relevant independent data as a basis for the opinion about the component auditor’s competencies and capabilities is not centralized available. On this moment the required data might be available on a variety of places in different formats and different levels of reliability. So the group engagement partner has to do his own research in different jurisdictions which will be very time consuming.
  • The group engagement partner does not always have the opportunity to test the data received on the level of reliability.
  • Budget constrains will have a negative impact on the actions the group engagement partner will perform in collecting and reviewing the data needed to fulfil his obligations with regard to the ISA 600 requirements.

As we have learned over the last couple of years, the accountancy profession stands in the middle of the spotlight when it comes on transparency and professional scepticism. Oversight Boards are far more focused on the compliance with rules and regulations in a more rules based fashion than the auditors in practice. Restoring the trust is not only the objective of the accountancy profession but will also have a tremendous impact on the economy at large.

Central research objective: "Restoring the trust"

The transparency and quality of audits performed by professional accountants and auditors are of crucial importance for the functioning of the global financial infrastructure. Global financial markets are asking for global financial statements with an opinion of an independent auditor. Over the last decade, more and more auditors were confronted with the globalization of their clients and became so-called group auditor. Still the group auditor remains responsible for the overall quality of the audit engagement the group auditor is assigned to even if other auditors may be involved. It goes without saying that auditors around the globe do not work in the same environment, do not have to comply with the same rules and regulations and do not have the same level of education before they can apply for an audit license.

The predecessors of the Global Accountancy Development Institute started in 1999 to bring together information about the global Professional Education of accountants and auditors, resulting a publication in 2002. After having build-up a global network of among others universities, oversight bodies, government agencies and accountancy institutes, GADI started a broader project to help auditors in practice to collect data needed as a basis for their opinion about the component auditor’s competencies and capabilities.

This project is called Global Accountancy Transparency Information (GATI). GATI is an innovative look and proxy for the condition of the accountancy development in a country. GATI will be data rich, allows the user to drill down on compliance gaps and will help to inform future actions. GATI will collect relevant data, will maintain the data and will make the data available for auditors in practice to comply with ISA 600 and for all other interested parties.

After long and intensive debates over several years, it was concluded GATI should measure eight aspects of a country’s transparency and accountancy infrastructure, called Pillars, divided into Sub-plllars, Milestones and Indicators if applicable. Through a quantitative approach the complex, multidimensional economic and social phenomena indices are per Pillar reduced to a level of adoption and implementation in regard to applicable international standards. After all the Pillar-data are processed per country an overall level of compliance will be available.

The eight mentioned not independent but interrelated Pillars are:

  • Pillar 1, Legal, Regulatory and Institutional Framework
  • Pillar 2, Audit, Assurance and Quality Control
  • Pillar 3, Professional Accountancy Education
  • Pillar 4, International Public Sector Accounting Standards
  • Pillar 5, International Financial Reporting Standards
  • Pillar 6, Ethics & Discipline
  • Pillar 7, Corporate Governance – Integrated Reporting
  • Pillar 8, Professional Accountancy Association Institutional Capacity

A modular structure has been developed for ease of access to the publication. In the modular approach a distinction will be made between abstracts, text of the chapters, boxes with tables, graphs and illustrations, appendices and specific country information. The idea behind it is that readers should have the opportunity to select those parts of the data that have their particular interest.

Project methodology in use

The methodology in use is based on a sound statistical framework and will apply widely recognized approaches to a traditional qualitative field. The methodology is built on existing international accountancy standards as promulgated by the International Federation of Accountants’ Statements of Membership Obligation (IFAC-SMO’s), the International Accounting Standards Board (IAASB), standards and best practices from the OECD Corporate Governance principles, USAID NGO Sustainability Index, the World Bank and common legal, regulatory and institutional practices.

Using those international standards and best practices in the areas of accounting and auditing, GATI provides a numerical benchmark of a country’s position at a point in time. The standards are incorporated into the mentioned eight pillars and divided into multiple milestones and hundreds of indicators to provide a survey instrument resulting in indices on adoption and implementation. The adoption and implementation distinction is important as the global financial crisis highlighted the urgency to move more quickly on implementing reforms.

Realization and planning of the Pillars

In May 2013 we have proudly announced the finalization of the GAE 2012 (Global Accountancy Education 2012) research study. Essential for the research is the fact that international experts and sponsors from all over the world were willing to support the study. We greatly value the contribution of the country contacts and hope that the result that is now achieved meets the expectations. The text of the GAE 2012 report is available in English; translations in Spanish, Portuguese and French are being considered.  Country overviews will only be available in English.

In the chapters of the publication GAE 2012 subjects that are relevant for accountancy education are discussed in a thematic approach. In addition for all countries in the study overviews will become or is available with general information about the country and the accountancy profession in the country, an analysis of the characteristics of accountancy education, and a short country specific description of the system of accountancy education. The GAE 2012 study are available to providers of accountancy education and training, governments, standard setters and regulators, accountancy profession, academics and other interested parties.

In autumn 2013 the preparation for the research for Pillar 2, Audit, Assurance and Quality Control has been started. Observations and overall opinions will be collected regarding the adoption and implementation  of the International Standards on Audit, Assurance and Quality. Questionnaires will be prepared and will be send to country respondents during the beginning of 2014. Based on the project methodology as mentioned under 3, information and data will be collected and analyzed in relation to this Pillar. The expectation is that in 2014 a first draft of the Pillar 2 will be finished. During the beginning of 2014 the first steps will be made for the construction of Pillar 6, Ethics & Discipline.

Availability of data

GADI wants to share the information and data to interested parties, partly free of charge.

The GADI website is available since begin 2014 under the URL of the University of Tilburg (“”). Besides general information regarding GADI, all the papers and reports prepared by GADI will be placed on the website. General and summarized information will be freely available. Specific country-Pillar-data will be in the future placed in a closed section of the website. For this closed section of the website user-id and passwords are necessary and will be made available on request by GADI. Depending on the development stage of the website and the available pillar-data, for the extraction of the specific country-Pillar-data a small amount will be charged. The received amounts will be used to maintain the website and to keep the data up-to-date.