Accounting Linked to Prosperity and Better Living Standards

Accounting Linked to Prosperity and Better Living Standards

The accounting profession is strongly linked to national economic growth and improved living standards and is estimated to contribute $575 billion annually to the global economy, according to a new report.

The study, conducted by the Centre for Economics and Business Research on behalf of the International Federation of Accountants, found that regions of the world 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 U.N. Human Development Index was found to be even stronger. The index measures a number of indicators including life expectancy, years of schooling and income.

For the first time, IFAC has definitively linked a strong accountancy profession to improved living standards for citizens. The study, Nexus 2: The Accountancy Profession—A Global Value Add, was presented at the Singapore Accountancy Convention on Wednesday.

“This report highlights the scale of the profession’s importance to the global economy,” said IFAC CEO Fayez Choudhury in a statement. “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.”

The researchers calculated the gross value added, or 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. Read more on Accounting Today.