Developing countries seeking foreign investment to boost economic growth should ensure that domestic firms abide by international standards for accounting and corporate transparency.
The advice came at the 29th session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) held in Geneva last week, UNCTAD said in a statement.
"Many developing countries lack some of the fundamental aspects of an accounting infrastructure," said Petko Draganov, deputy secretary-general of UNCTAD.
The UNCTAD annually hosts the three-day ISAR meeting. Experts from around the world debate different approaches for overcoming the challenges faced by developing countries in building regulatory and institutional foundations for high-quality corporate reporting.
Experts at the meeting stressed that greater corporate transparency could enhance the predictability and stability of business transactions, thereby creating a stronger enabling environment for investment and more informed policymaking.
"We now operate in a world economy that transcends national borders, where foreign direct investment accounts for a huge proportion of overall investment," said Michel Prada, chairman of the International Financial Reporting Standards (IFRS) Foundation.
Corporate reporting relating to environmental sustainability was "a key issue', James Zhan, Director of UNCTAD'S Division on Investment and Enterprise said citing this year's United Nations Rio+20 Earth Summit.
To help countries improve accounting and corporate reporting, the UNCTAD has rolled out an Accounting Development Toolkit (ADT).
"Its main objective is to assist policymakers in strengthening accounting infrastructure for achieving high- quality corporate reporting, including through measuring progress in a comparative and consistent manner,” said Tatiana Krylova, head of UNCTAD'S Enterprise Branch.
Representatives of nine countries that had recently tested the ADT said that it was effective in helping government and corporate officials decide how to proceed in making further improvements.