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IFAC Update: June 2011
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July 5, 2011
The IFAC Update provides summaries of developments from the International Federation of Accountants (IFAC) and the independent standard-setting boards it supports over the past month.
Open Consultations and Exposure Drafts
1. IAASB Exposure Draft and Consultation Paper
? International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information—Comment Deadline: September 1, 2011
? Enhancing the Value of Auditor Reporting: Exploring Options for Change—Comment Deadline: September 16, 2011
2. IAESB Exposure Drafts
? International Education Standard 4, Professional Values, Ethics, and Attitudes—Comment Deadline: July 15, 2011
? International Education Standard 6, Assessment of Professional Competence—Comment Deadline: July 28, 2011
? International Education Standard 1, Entry Requirements to a Program of Professional Accounting Education—Comment Deadline: September 21, 2011
3. IPSASB Exposure Draft
? Key Characteristics of the Public Sector with Potential Implications for Financial Reporting—Comment Deadline: August 31, 2011
4. PAIB Committee Predictive Business Analytics Exposure Draft—Comment Deadline: July 29, 2011
IFAC News in Brief
1. Exposure Draft Issued by IAESB
Please see the Open Consultations and Exposure Drafts Section for more details.
2. New XBRL Paper Released by IFAC and ISACA
IFAC and ISACA have just released a new paper, Leveraging XBRL for Value in Organizations, to provide guidance for accounting and assurance professionals in helping their organizations gain value from XBRL (eXtensible Business Reporting Language). This paper demonstrates how professional accountants in business can work with their organizations to recognize the benefits and opportunities that exist for embedding XBRL in an organization’s information processes, which will enhance management communication and, therefore, increase the value of information used within the organization. The paper includes examples and case studies; a listing of Additional XBRL Resources is also available.
3. IAESB Announces Second Round of Research Projects Designed to Inform Future Focus
Following the successful completion of the International Association for Accounting Education and Research (IAAER)/Association of Chartered Certified Accountants (ACCA) research projects to inform the work of the International Accounting Education Standards Board (IAESB) (Informing the International Accounting Education Standards Board: A Summary of IAAER/ACCA Research Projects), the IAAER recently approved a second round of funded research projects. These projects, as well as the first round of projects, are funded by the ACCA.
The three proposals selected for funding are:
? Exploring Models of Accounting Education and IESs Adoption by Professional Bodies and Tertiary Institutions in Australia, Japan, and Sri Lanka—Kim Watty, Principal Investigator, Deakin University (Australia); Satoshi Sugahara, Hiroshima Shudo University (Japan); and Luckmika Perera, Deakin University.
? A Framework of Best Practice of Continuing Professional Development for the Accounting Profession—Paul de Lange, RMIT University (Australia), and Beverley Jackling, Victoria University (Australia).
? Ontology-Based e-Assessment for Accounting Education—Patrick Carmichael, Principal Investigator, Liverpool John Moores University (UK); Kate Litherland, Tony Hall, and Lewis Gordon, Liverpool John Moores University; and Maria Paz Prendes Espinosa, Maria del Mar Sanchez, and Jesualdo Tomás Fernández Breis, University of Murcia (Spain).
The research teams will present interim reports this year, and will deliver final reports in 2012. For more detail on the projects, please see the IAAER website.
Recent and Upcoming Events
1. IFAC President Delivers Keynote Address to Hungarian Auditors’ Organization
Göran Tidström, IFAC’s President, recently gave the keynote address at a meeting of the Magyar Könyvvizsgálói Kamara (Chamber of Hungarian Auditors). The meeting was designed as an opportunity for the presidents of the audit chambers of the 27 European Union countries to discuss audit topics. Mr. Tidström discussed issues that are specific to Europe, such as a single European market, but also addressed issues of global concern, such as the role of audit in the small- and medium-sized entities sector and the role of auditors.
2. Keynote Address at HKICPA Annual Conference Delivered by IFAC CEO
Ian Ball, IFAC’s CEO, gave a keynote address at the Hong Kong Institute of Certified Public Accountants (HKICPA)’s annual conference, Hong Kong as a World Capital Market–What the Future Holds for Hong Kong CPAs, in June. Mr. Ball’s presentation, Global Developments in the Accountancy Profession, discussed the significant changes he sees on the horizon, specifically in the areas of integrated reporting, which is of relevance to both preparers and assurance providers; the role of audit and the audit report, which is of relevance to auditors and others; and public sector financial reporting, which is especially relevant to those who work in or provide consultancy services to the public sector.
3. IFAC President Participates in World Bank Accounting Conference
IFAC’s President, Göran Tidström, recently participated in a panel discussion at the opening plenary of the Accounting Developments for Results global conference, held by the World Bank in Washington, D.C. Approximately 150 financial management specialists attended the event, the purpose of which was to promote greater awareness of the importance of fostering high-quality audit and assurance practices.
4. Presentation Given by IAESB Members at Accounting Conference for Southern Africa
International Accounting Education Standards Board members Saleem Kharwa and Kim Langfield-Smith, with IFAC Senior Technical Manager David McPeak, conducted a presentation on the proposed revision of International Education Standards 4 and 6 at the Southern African Accounting Association 2011 International Conference, which was held June 25-29 in George, South Africa. The event, which was co-sponsored by the International Association for Accounting Education and Research, was themed “Accounting Education’s Role in Enhancing Sustainable Business Driven by Professional and Ethical Business Leaders.”
Open Consultations and Exposure Drafts
1. IAASB Invites Comment on Recently Proposed Exposure Draft and Consultation Paper
The International Auditing and Assurance Standards Board (IAASB) recently released the following:
? International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, a principles-based standard that can be applied effectively to a broad range of assurance engagements, ranging from assurance on statements about the effectiveness of internal control, to direct engagements, such as performance or “value for money” audits, to possible future engagements addressing integrated reporting or corporate social responsibility reporting. Comment Deadline: September 1, 2011
? Enhancing the Value of Auditor Reporting: Exploring Options for Change looks to obtain views on enhancing the quality, relevance, and value of auditor repointing on an international basis. This Consultation Paper describes issues with current financial reporting, including a perceived “information gap,” identified by some stakeholders. It also sets out possible options for change and seeks input as to whether such options might be effective in enhancing auditor reporting and the communicative value of the auditor’s report. Comment Deadline: September 16, 2011
2. IAESB Invites Comment on Proposed Revised, Clarified Education Standards
The International Accounting Education Standards Board (IAESB) has released the following exposure drafts:
? International Education Standard (IES) 4, Professional Values, Ethics, and Attitudes, which proposes that the development of professional values, ethics, and attitudes be addressed by learning and development activities that occur throughout the career of the professional accountant. This revision to IES 4 will be helpful to educational organizations, employers, regulators, government authorities, and other stakeholders who support the learning and development of professional accountants. Comment Deadline: July 15, 2011
? International Education Standard 6, Assessment of Professional Competence, will assist professional accountancy organizations in understanding both the learning and development requirements for areas of assessment of professional competence. The revised standard addresses elements that are essential to assessing professional competence over the career of a professional accountant, including proposing:
o a principles-based approach, which specifies the requirements for the assessment of professional competence across the Initial Professional Development (IPD) and Continuing Professional Development (CPD) of a professional accountant;
o that principles of individual assessment used by member bodies to assess professional competence—applied across IPD and CPD career stages—shall be reliable, valid, equitable, transparent, and sufficient; and
o a requirement that IFAC member bodies undertake a formal evaluation of the adequacy of competence of aspiring professional accountants prior to their admission to the profession and have a systematic process to verify whether professional accountants meet CPD requirements.
Comment Deadline: July 28, 2011
? International Education Standard 1, Entry Requirements to a Program of Professional Accounting Education, currently prescribes the principles to be used in setting entry requirements for professional accounting education and practical experience. The proposed revision is intended to protect the public interest by establishing fair and proportionate entry requirements, which help those considering professional accounting education make appropriate career decisions, and ensuring that these requirements are not misrepresented. The revised standard proposes:
o specification of entry requirements for professional accounting education;
o explanation for the rationale behind the entry requirements;
o a requirement that excessive barriers to entry are not put in place; and
o a requirement to make relevant information publicly available so that candidates can assess their chances of successful completion.
Comment Deadline: September 21, 2011
3. IPSASB Publishes Exposure Draft on Financial Reporting Implications
The International Public Sector Accounting Standards Board (IPSASB) recently released Key Characteristics of the Public Sector with Potential Implications for Financial Reporting, which provides background on issues affecting the development of a Conceptual Framework for public sector entities and standard setting. In particular, this exposure draft highlights that public sector entities are likely to depend upon taxation rather than commercially generated profits for their continued existence—and have governance arrangements that generally involve a legislative body holding an executive to account. The paper is geared toward those who may have limited familiarity with the public sector, particularly those with more experience in financial reporting for the private sector, including not-for-profit entities. Comment Deadline: August 31, 2011
4. Predictive Business Analytics Exposure Draft Released by PAIB Committee
New guidance on predictive analytics has been released by the Professional Accountants in Business (PAIB) Committee. Predictive Business Analytics: Forward-Looking Measures to Improve Business Performance, part of the International Good Practice Guidance series, is designed to help professional accountants working in commerce, industry, financial services, education, and the public and not-for-profit sectors, as well as their organizations, embrace predictive analytics to achieve better forward-looking performance insights. Comment Deadline: July 29, 2011
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