IFAC News in Brief

1. New Exposure Draft Issued by IESBA

 

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

 

 

The 2011 IFAC Global Leadership Survey of the Accounting Profession identified three issues of particular concern to the profession in 2012: the difficult global financial climate, enhancing the reputation/credibility of the profession, and addressing the needs of small- and medium-sized practices and small- and medium-sized entities. Additional concerns for this year include: issues related to EU draft legislation, public sector/sovereign debt issues, increased regulation, global regulatory convergence, the role of the professional accountant in business, and auditor independence. The survey results include data from 123 respondents from 71 countries and jurisdictions who took the survey from December 1, 2011 to January 11, 2012.

 

 

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

 

The PAIB Committee has published Investor Demand for Environmental, Social, and Governance Disclosures: Implications for Professional Accountants in Business, which considers the trends in investor demand for and use of environmental, social, and governance (ESG) information, and recommends how professional accountants can better support their organizations in responding to these demands. In addition to highlighting the evolving trend toward greater investor interest in ESG factors, the report also alerts professional accountants to essential metrics and indicators and includes a sector-neutral list of the most commonly used core-performance indicators. The report also recommends five actions for the accountancy profession and professional accountants in business to address investor needs.

 

The deadline for nominations for IFAC boards and committees and the International Gold Service Award is approaching—March 15, 2012. IFAC encourages member bodies, the Forum of Firms, and other international organizations, as well as the general public, to nominate qualified professionals for open positions on the boards and committees for terms of service beginning in 2013. IFAC is also seeking nominations for the 2012 International Gold Service Award, which recognizes individuals for outstanding contributions to the accountancy profession. For additional information, including qualifications and the nominating process, please see the International Gold Service Award press release and the Call for Nominations for IFAC Boards and Committees for 2013.

 

 

The staff of the International Auditing and Assurance Standards Board (IAASB) has released a new question-and-answer (Q&A) publication that re-emphasizes to auditors the importance of an attitude of professional skepticism when performing their role. Professional Skepticism in an Audit of Financial Statements focuses on the requirements and application material in the International Standards on Auditing and the IAASB’s quality control standard that are of particular relevance to the proper understanding and application of professional skepticism during an audit of financial statements. In addition, answers are provided regarding what audit firms and auditors can do to enhance awareness of the importance of professional skepticism, identify aspects of an audit where professional skepticism may be particularly important, and how professional skepticism can be evidenced.

 

Recent and Upcoming Events

 

 

 

Over 40 participants representing 19 countries gathered in Dubai, United Arab Emirates, for IFAC’s Mentoring Insights—The Mentor Perspective workshop in February 2012, convened by the Professional Accountancy Organization (PAO) Development Committee. The roundtable workshop brought together representatives from countries including Australia, Canada, China, India, Kazakhstan, Nigeria, and the UK. Discussions centered around the drivers for undertaking mentoring; the areas in which support is most commonly sought; and the key success factors and challenges based on the experiences of those attending the event. The range of information gathered will be used to inform the PAO Development Committee Mentoring Program.

 

 

The inaugural Steering Committee meeting for MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) was held in Jaipur, India, in February 2012. The meeting was co-hosted by the Institute of Chartered Accountants of India and the Institute of Cost Accountants of India. The meeting built on the signing of MOSAIC in Busan, South Korea, in December 2011, and strived to create consensus around the goals and objectives of MOSAIC; the establishment of the MOSAIC Steering Committee and the MOSAIC Secretariat; and a proposed work program.
 

 

Space is still available for IFAC’s upcoming Seminar on the sovereign debt crisis, March 19-20, 2012 in Vienna. Aimed at key decision makers, politicians, public finance management leaders, and journalists who work in finance, accounting, auditing, and budgeting, the Seminar will feature experts from across the globe addressing topics including standard setting, government reporting reform, long-term sustainability of governments, and the role of the finance professional as leader and catalyst for change. Attendees will have the opportunity to network with our venerable speakers and guests. As the impact of the sovereign debt crisis continues to create turmoil in the global economy, our Seminar will cover the crisis’ many causes and the reform needed now. Visit our website for more information and to register today.  

 

 

 

Ian Ball, IFAC’s Chief Executive Officer, recently attended the L'Institut des Réviseurs d'Entreprises’ European Study Day conference in Brussels, Belgium. Mr. Ball delivered a presentation on Auditing in the Public Sector, which detailed the societal role of the audit, the need for adoption of accrual-based accounting by governments and public sector institutions, and IFAC’s commitment to global convergence of international standards.

 

 

IFAC and the Institute of Certified Public Accountants of Singapore (ICPAS) will co-host the next annual IFAC Small and Medium Practice (SMP) Forum on March 19, 2012. Leading figures and representatives from government agencies, donor agencies, standard setters, and other organizations will discuss collaborative solutions to unique challenges facing SMPs and their small- and medium-sized entity (SME) clients. The event will feature a keynote address by IFAC Deputy President Warren Allen and speakers from the Accounting and Corporate Regulatory Authority of Singapore and the Association of Small & Medium Enterprises (Singapore). While registration for this event is now closed, speakers’ presentations will be available under SMP News & Events in early April. Presentations, videos, and highlights from the 2011 Forum are also available on our website. Email SMPForum@ifac.org for more information. 

 

Open Consultations and Exposure Drafts
 

  

 

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 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
 

? Proposed Changes to the Code of Ethics Definition of “Engagement Team” address comments received by the International Auditing and Assurance Standards Board on its Exposure Draft (ED) on International Standards on Auditing (ISA) 610, Using the Work of Internal Auditors. A number of respondents to that ED pointed out the perceived inconsistency between the independence requirements for external auditors under the Code of Ethics for Professional Accountants and the use of internal auditors to perform external audit procedures. The IESBA invites all stakeholders to comment on its proposals. Comment Deadline: May 31, 2012.

 

 

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

? 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
 

? Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Presentation in General Purpose Financial Reports (CF-CP4) explores concepts applicable to the presentation of information in the general purpose financial reports of public sector entities. It is not limited to the financial statements. The Consultation Paper describes what is meant by presentation of information, and explains that presentation covers both display and disclosure. It reviews an approach to presentation of information that involves: presentation objectives based on user needs; application of the qualitative characteristics to presentation decisions; and three presentation concepts. IPSASB also released an At a Glance summary of the material in the Consultation Paper. Comment Deadline: May 31, 2012