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

 

IFAC submitted a letter to the G-20 Deputies and Finance Ministers in advance of their April 2012 meeting in Mexico. The letter urged the G-20 to undertake urgent and fundamental work to determine the nature of institutional change required in public sector financial management, transparency, and accountability. The recommendations in the letter are in line with IFAC’s mission to contribute to the development, adoption, and implementation of high-quality international standards; and by doing so, contribute to the development of strong international economies.

 

 

 

IFAC, on behalf of the Private Sector Taskforce (PSTF), submitted an update to the report, Regulatory Convergence in Financial Professions and Industries, issued to the G-20 Deputies in September 2011. The update strongly encourages the G-20 to implement all of the 15 recommendations presented in the report with a strong emphasis on its first two recommendations, encouraging the G-20 to continue to focus on regulatory convergence in the financial sector, ensuring that G-20 nations work together to identify and narrow gaps in regulatory practice; and discourage nations from implementing unilateral national regulatory reforms that are inconsistent with international standards and that widen—rather than narrow—the convergence gap.

 

 

 

The International Ethics Standards Board for Accountants (IESBA) is seeking feedback from directors and audit committee members on its proposals to strengthen the framework that would apply when there has been a breach of its independence requirements. The proposals state that when an independence requirement is breached, the audit firm would be required to discuss this breach (regardless of the significance of the breach) with those charged with governance, such as the audit committee, as soon as possible. The firm would also be required to discuss the remedial actions it proposes to take and obtain the audit committee’s concurrence that the actions are satisfactory. If you are a director or audit committee member, please take the short survey now.
 

 

The International Auditing and Assurance Standards Board (IAASB) has committed to move rapidly over the next two years on a top-priority project to enhance the communicative value and relevance of auditor reporting. The scope and focus of the project is based on the results of a 2011 Consultation Paper, Enhancing the Value of Auditor Reporting: Exploring Options for Change, which received more than 80 responses from a wide range of stakeholders. The project will include the revision of International Standard on Auditing (ISA) 700, Forming an Opinion and Reporting on Financial Statements, and, as appropriate, consequential changes to related ISAs, such as ISA 260, Communication with Those Charged with Governance.
 

Accordingly, the IAASB is currently developing a progressive consultation document on key elements of a new auditor’s report. For more information and to monitor developments on this project, visit the Auditor Reporting Project page on www.iaasb.org.

 

 

 

The Professional Accountants in Business (PAIB) Committee recently submitted a comment letter to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on its recently proposed Internal Control – Integrated Framework update. The comment letter addresses the need for integration of risk management and internal control frameworks and embracing a wider perspective instead of being limited to internal control over reporting, operations, and compliance, beginning with the adoption of a broadened definition of internal control and the inclusion of the strategic objective. The comment letter also references some of the specific recommendations the PAIB Committee received in its Global Survey on Risk Management and Internal Control, which revealed a widely held desire for risk management and internal control systems to be better integrated into organizations’ overall governance, strategy, and operations.

 

 

 

The 2012 IFAC Small and Medium Practices Forum was held on March 19, 2012 in Singapore. Co-hosted with the Institute of Certified Public Accountants of Singapore, this year’s event attracted delegates from 40 professional accountancy organizations in 36 countries. Presentations and photos are now available on the IFAC website at the 2012 IFAC Small and Medium Practices Forum.

 

 

 

The IFAC SMP Committee has released the first edition of a Companion Manual to accompany its implementation guides for small- and medium-sized practices (SMPs) on quality control and auditing: QC Guide, 3e and ISA Guide, 3e. The manual explains how member bodies and other professional accountancy organizations can make the best use of the guides, including adapting, translating, or incorporating the guides into CPD courses and/or training programs.
 

A PowerPoint presentation on the QC Guide that member bodies may use in training and orientation seminars to introduce staff and members to the guide is also available: QC Guide—Orientation. A corresponding presentation on the ISA Guide will follow shortly. 
 

The Good Practice Checklist for Small Business was recently released for member bodies to distribute, adapt, and/or translate for their constituents who operate in SMPs. This multi-part checklist features standalone sections on financial tasks, strategic management tasks, and regulatory requirements, among others. The checklist is being offered exclusively to member bodies until early May. Email permissions@ifac.org to host or adapt the checklist or slides.

 

 

 

The Spanish translation of the Handbook of International Standards on Auditing and Quality Control was released this month. The single Spanish translation is the result of a two-and-a-half-year-long collaborative effort by Instituto de Censores Jurados de Cuentas de España and Instituto de Contabilidad y Auditoría de Cuentas, and a review committee led by Federación Argentina de Consejos Profesionales de Ciencias Económicas, with representatives from IFAC member bodies in Bolivia, Chile, Colombia, Costa Rica, Mexico, Panama, Paraguay, and Uruguay, and other key stakeholders.

 

 

• Albanian—Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements (2012)

• Bulgarian—International Standards on Auditing Guide (2010)

• Italian—International Standards on Auditing Guide (2011)

• Lithuanian—Quality Control (QC) Guide (2009), Handbook of the Code of Ethics for Professional Accountants (2010)

• Serbian—Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements (2010)

• Spanish—International Standard on Assurance Engagements 3402 (2009), Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements (2011)

• Turkish—Guide to Practice Management for Small- and Medium-Sized Practices (2010)

 

 

IFAC’s seminar on the sovereign debt crisis, held March 19-20, 2012, was a significant first step toward improvement and change. Key decision makers and public finance management leaders from across the globe assembled in Vienna—attendees had 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, the seminar covered the crisis’ many causes and the reform needed now. Please visit the post-conference site for more information and to view presentations.

 

The next IFAC SMP Quick Poll will open soon (approximately May 7). Look for the link in the Small and Medium Practices (SMP) Committee eNews (register and subscribe) and at www.ifac.org/SMP. We urge member bodies to encourage participation from their SMP members. If you are interested in promoting the poll to your members, email communications@ifac.org for standard text for use in journals or websites. See also the SMP Quick Poll: 2011 Round-Up.

 

Warren Allen, IFAC’s deputy president, recently attended the World Investment Forum 2012 in Doha, Qatar, The High-Level Meeting on Accounting and Development. Mr. Allen delivered a presentation on Public and Private Sector Accounting Standards—and the Current Financial Climate, which discussed the sovereign debt crisis and the need for transparent and comprehensive standards in both the public and private sectors. The text of Mr. Allen's presentation is available on the World Investment Forum website. The presentation will be available on the IFAC website.

 
Open Consultations and Exposure Drafts

The International Ethics Standards Board for Accountants (IESBA) has released Proposed Changes to the Code of Ethics Definition of “Engagement Team” that addresses 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 the ISA 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:
 

• 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
 

• Exposure Draft (ED) 47, Financial Statement Discussion and Analysis proposes minimum required content while still providing sufficient flexibility for entities to prepare and publish financial statement discussion and analysis that best portrays their specific circumstances. ED 47 includes implementation guidance and an illustrative example that shows how an entity might prepare its financial statement discussion and analysis to comply with the proposed requirements. IPSASB also released an At a Glance summary for this Exposure Draft. Comment Deadline: July 31, 2012