Please see the Open Consultations and Exposure Drafts section for more details.

 

 

Following the release of the European Commission’s proposed legislation on audit, IFAC released comments on the proposed measures. IFAC is supportive of efforts to continue to improve audit quality, enhance the role of audit, and safeguard auditor independence. However, there are also several components of the proposed legislation that IFAC does not support as there is not sufficient evidence that the measures will have a positive impact on auditor independence and audit quality, and that the benefits will outweigh the risks and costs. See the press release for more information.

 

 

The Small and Medium Practice (SMP) Committee has released the second edition of its Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide) to help practitioners improve the management of their accounting practices, and help IFAC members support their SMP constituents, especially in education and training. The PM Guide is comprised of eight standalone modules that include developing a growth strategy, managing staff and client relationships, managing risk, and succession planning. It also includes an extended case study, a sample office procedures manual, and numerous checklists and worksheets. An updated companion guide to help professional accountancy organizations make the best use of the PM Guide will be released in early 2012. 

 

 

The International Auditing and Assurance Standards Board (IAASB) has released International Auditing Practice Note (IAPN) 1000, Special Considerations in Auditing Financial Instruments, which provides important practical assistance to auditors when addressing valuation and other considerations pertaining to financial instruments. This area of financial reporting involves complex issues and has come under particular focus due to the recent difficult financial market conditions.

 

 

The International Auditing and Assurance Standards Board (IAASB) has issued International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus. Companies seeking to access capital markets commonly include pro forma financial information in their prospectuses as a key element to enable investors and others to better assess the investment opportunities presented. Pro forma financial information included in an issuer’s prospectus illustrates the impact of a proposed acquisition, equity or debt issuance, or other transactions on the issuer’s historical financial information as if such event or transaction had occurred at an earlier selected date.

 

 

In light of current global financial crises, the International Auditing and Assurance Standards Board (IAASB) has taken steps to remind auditors of their important responsibilities under the International Standards on Auditing (ISAs), and that the appropriateness of management’s use of the going concern assumption is a matter to be considered on every audit engagement. See the press release for additional information and comments.

 

 

 

 

 

IFAC President Göran Tidström recently attended the 10th Annual Fédération des Experts-Comptables Mediterranéens Conference: SME’s Financial Regulation: Striking the Right Balance Between Transparency and Regulatory Simplicity. Mr. Tidström delivered the opening keynote speech, which expressed IFAC’s commitment to global convergence of international standards on financial reporting, ethics, quality control, audit, and related services across the whole spectrum of entities—from public interest entities to small- and medium-sized entities. Mr. Tidström emphasized the critical need to achieve the proper balance between transparency and regulatory simplicity.

 

 

 

 

 

The IFAC Board has released proposed revisions to the Statements of Membership Obligations (SMOs) for comment. The SMOs form the basis of the IFAC Member Body Compliance Program and serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members. The SMOs were redrafted to clarify what is expected of IFAC member bodies when they have varying degrees of responsibility for an SMO area, and to bring the SMOs in line with IFAC’s current strategic focus on adoption and implementation of international standards. Comment Deadline: March 5, 2012

 

 

The International Ethics Standards Board for Accountants (IESBA) has released:

? Proposed Changes to the Code of Ethics for Professional Accountants Related to the Provisions Addressing a Breach of a Requirement of the Code provides guidance for professional accountants on actions to be taken for any breach of the Code of Ethics for Professional Accountants. The Exposure Draft also includes a robust framework for addressing a breach of a requirement, which will increase transparency. Comment Deadline: January 23, 2012

? Proposed Changes to the Code of Ethics for Professional Accountants Addressing Conflicts of Interest is intended to provide additional guidance to professional accountants in business and in public practice concerning conflicts of interest. The proposed changes are also intended to make revisions to provide more comprehensive guidance in identifying, evaluating, and managing conflicts of interest. In the IESBA’s view, the approach to be taken by a professional accountant in public practice and a professional accountant in business should be broadly similar. The proposal recognizes, however, that conflicts of interest will typically arise in different circumstances for accountants in public practice, particularly because a conflict of interest may arise from professional services provided by other members of the accountant's firm. Comment Deadline: March 31, 2012

 

 

The International Public Sector Accounting Standards Board (IPSASB) has issued the following Exposure Draft and Consultation Paper:

? Exposure Draft 46, Recommended Practice Guidelines, Reporting on the Long-term Sustainability of a Public Sector Entity’s Finances builds on a consultation paper issued in late 2009 and provides good practice guidelines on reporting on the long-term fiscal sustainability of a public sector entity. It also emphasizes that entities may be able to draw on projections that are already being made by other bodies, which will ensure a cost-effective approach. In addition, it provides users with information on the impact of decisions made by the reporting date under current policy. IPSASB has also released an At a Glance summary of the material in the Exposure Draft. Comment Deadline: February 29, 2012

? Reporting Service Performance Information discusses the IPSASB view that service performance information is necessary to meet the objectives of financial reporting, which is to provide information that is useful to users of General Purpose Financial Reports for accountability and decision making. The project also aims to present a principles-based approach to developing a consistent framework for public sector entities. IPSASB also released an At a Glance summary for this Consultation Paper. Comment Deadline: April 15, 2012

 

 

The Professional Accountants in Business (PAIB) Committee has released Evaluating and Improving Internal Control in Organizations for public comment, the latest proposed International Good Practice Guidance. This proposed publication seeks to establish a benchmark for good practice in maintaining effective internal control in response to risk, as well as help professional accountants in business and their organizations create a cycle of continuous improvement for their internal control systems. Comment Deadline: February 29, 2012