" (2004) Ricol states in relation to the audit area that "...actions were recommended in two primary areas:

1) Reducing threats to auditor independence; and 2) Strengthening audit quality control processes. (Ricol, 2004)

In regards to corporate management and governance, it is related in Ricol's speech that the task force called for corporate boards to "demonstrate greater accountability for the information, financial management and internal controls necessary to produce trustworthy information. Sound corporate governance policies are especially important in emerging economies, directly impacting investor confidence and economic growth." (Ricol, 2004)

V. ACCOUNTING'S CENTRAL ROLE in the ECONOMY

Accounting clearly plays a central role in the economy through "building confidence in financial information and financial infrastructure." (Ricol, 2004) According to Ricol the accounting profession "cannot afford to look the other way and focus on capital markets in developed countries." (Ricol, 2004) Additionally stated by Ricol is that the accountancy profession needs to "reach out to nations without a well established profession as they will play critical roles in determining our future." (2004)

Ricol states that predictions have been made that approximately 95% of the population growth in the world will take place in nations that are yet developing and that the financial systems in these countries can be sustained through the "international accountancy community working "in collaboration with governments, regulators, analysts, development agencies funders, and others." (2004)

Finally, it is stated by Ricol there it is critical that "good quality accounting and auditing infrastructure" be present in the economy and that this infrastructure have "due respect and recognition in regulatory and legal environments." (2004) Transparency in reporting is also noted to be of vital importance. This is stated to required "...both the expertise at the national level, the capacity to train and continue to develop members of the profession, and the cooperation and coordination with other bodies both nationally and internationally." (Ricol, 2004)

V. APPLICATION of ACCOUNTING PRINCIPLES

The work of Edward L. Yingling (2008) entitled:...

The misapplication of mark-to-market accounting in today's situation, when there is no functioning market, has unnecessarily destroyed billions of dollars in capital." (Yingling, 2008) Yingling states in relation to the action taken recently on the part of the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB) to address the concept of "Other Than Temporary Impairment" (OTTI) was very inadequate." (Yingling, 2008) the issue was addressed by the SEC who made an attempt to find a resolution to the issue however, it is stated that the FASB's "interpretation muddled it again. As a result, banks may be required to write down securities -- even though there may be no threat to principal or to cash flow -- because the markets are dysfunctional." (Yingling, 2008)
SUMMARY & CONCLUSION

The role of accountancy in the economy is one that is central and primary to the overall market function and structure stability as well as being important in shaping the public perception of the market in relation to capital and funding in the market. In the instance where the market has become unstable it is almost sure that the principles of accounting have become shaky as well and are in a state that requires analysis and restatement of principles of accounting as well as accounting guidelines in setting a new direction for a flailing market.

Bibliography

Hoggett, J.R., Edwards, L. And Medlin, J. (nd) Decision Making and the Role of Accounting. Accounting in Australia, Fifth Edition. Chapter 1. Online available at http://www.johnwiley.com.au/highered/accounting/aia5e/student-res/study_guide_sampler.pdf

The Role of Accountancy in Economic Development (2004) presented to the United Nations Conference on Trade and Development (UNCTAD)

Rene Ricol, President International Federation of Accountants June 16, 2004.

Yinglang, Edward L. (2008) Improve Accounting Standards, Improve the Economy. Mark to Market Watch. The American Spectator. 11 Dec 2008. Online available at http://spectator.org/archives/2008/12/11/improve-accounting