IFAC News in Brief

1. New Exposure Drafts Issued by the PAIB Committee and IPSASB 

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

 

IFAC Chief Executive Officer Ian Ball praised the Pan African Federation of Accountants (PAFA) for its recent decision to adopt international standards in accounting and auditing, calling it “an important benchmark in underscoring the value of accountancy and the accountancy profession to governments and to business on the African continent.” He added that PAFA’s resolution reflects strong support for IFAC’s Statements of Membership Obligations (SMOs) and underscores the SMO requirements for IFAC members and associates to adopt and support implementation of international standards. See the press release for more information.

 

The International Auditing and Assurance Standards Board (IAASB) has released its 2011 Annual Report, Foundations for the Future. The annual report highlights the IAASB’s work in the public interest to strengthen audits globally and build robust standards for audit, assurance, and related services. The report covers new and enhanced international standards issued by the IAASB, and draws attention to the IAASB’s new guidance material and implementation support. The annual report details over 100 outreach activities undertaken during 2011, including liaisons with regulators and investor groups whose input is critical to the future of auditing.

 

The May-June IFAC SMP Quick Poll, available in 15 languages, is now open: www.research.net/s/SMPQuickPoll-May-June-2012. To ensure that we get a geographically-balanced pool of responses, we urge IFAC member bodies to share this link and encourage participation from their SMP members. To date, the poll has received over 2,500 responses. Make sure your voice is heard and take the poll now! Polling will close on June 14, 2012.
 

The SMP Quick Poll will be conducted biannually by IFAC in 2012 to take a snapshot of the key issues confronting small- or medium-sized practices (SMPs) and their small- and medium-sized entity (SME) clients. The poll should take less than three minutes to complete, and the results will be published in the next SMP eNews (subscribe here).

 

The Small and Medium Practices (SMP) Committee has published the Good Practice Checklist for Small Business, a multi-part checklist that features standalone sections on financial and strategic management tasks and regulatory requirements, among others. Adapted with permission from a similar checklist developed by CPA Australia, this resource can be used both by small businesses, to ensure they are applying good business practices to their operating procedures and to determine what advice they may need from an accountant, and/or by SMPs, as a marketing or diagnostic tool to help them determine the advice a small business client may need. Access this and more related resources from the Business Advisory Relevant Links page.

 

To help small- and medium-sized practices (SMPs) who are considering building or expanding their professional services offerings, the IFAC SMP Committee has developed a series of videos featuring interviews with SMP Committee members Florin Toma (Romania) and Stuart Black (Australia). The interviewees share their insights on how to market and position a business advisory practice, the biggest challenges in building a business advisory practice, and the keys to the success of their own practices, among other topics. The videos have been released exclusively to IFAC member bodies to give them an opportunity to adapt, reproduce, and distribute them to their own members. They will be available to the general public in early July at www.ifac.org/SMP. For access to the videos, email PaulThompson@ifac.org. For permission to adapt or translate the videos, email permissions@ifac.org.

 

The International Ethics Standards Board for Accountants (IESBA) has added additional workstreams to its Strategy and Work Plan for 2012. The board is considering additional projects in the areas of: firm rotation, non-assurance services, the structure of the Code of Ethics for Professional Accountants (the Code), and Part C of the Code. See the summary of additional workstreams for more information.

 

The IESBA is still 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: www.research.net/s/IESBA-Survey-Breach-of-an-Independence-Requirement.

 

Public Finance International has posted the second blog installment from IFAC Chief Executive Officer, Ian Ball, Damned lies and government accounts, which addresses continued government fiscal mismanagement and the need for reform.

 

IFAC is pleased to announce the publication of a single, Spanish translation of the Code of Ethics for Professional Accountants, available on the IFAC website. This translation is the result of a collaborative effort by several IFAC member bodies: Instituto de Censores Jurados de Cuentas de España, Instituto Mexicano de Contadores Públicos, Federación Argentina de Consejos Profesionales de Ciencias Económicas, and a review committee comprising representatives from IFAC member bodies in Argentina, Bolivia, Chile, Colombia, Costa Rica, Mexico, Panama, Paraguay, and Uruguay, and other key stakeholders. The translated publication includes an unofficial Table of Equivalencies showing differences between terminology used in Spain and those commonly used in Latin America. For more information, please see the press release.

 

• 2012 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements— includes a revised Preface, IAPN 1000, ISA 315 (Revised), ISA 610 (Revised) and Conforming Amendments, ISAE 3420, and ISRS 4410.

• 2012 Handbook of International Public Sector Accounting Pronouncements— includes a new standard: IPSAS 32, Service Concession Arrangements: Grantor. IPSAS 32 is effective for annual financial statements covering periods beginning on or after January 1, 2014. The 2012 Handbook also incorporates the amendments made as a result of the IPSASB’s 2011 Improvements Project, as well as a revised Terms of Reference and Preface to International Public Sector Accounting Standards.

• 2012 Handbook of the Code of Ethics for Professional Accountants— contains updates and corrections.

Watch the Spotlight section at www.ifac.org for updates!

 

• French—International Standards on Auditing and International Standard on Quality Control Vol.1 (2009), Competent and Versatile Employer Brochure (2011)

• Greek—Role of SMPs in Greening Small Business (2011)

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

• Montenegrin—Competent and Versatile Employer Brochure (2011)

• Romanian—Staff Questions & Answers—Professional Skepticism in an Audit of Financial Statements (2012)

• Spanish—International Standards on Assurance Engagements 3400 (2008), International Standard on Related Services 4410 (2008), Code of Ethics for Professional Accountants

 

Recent and Upcoming Events
 

IFAC President Göran Tidström recently attended a conference on governance and the public sector co-hosted by the Ordre des Experts Comptables de Tunisie (OECT) and the Pan African Federation of Accountants (PAFA) in Tunis, Tunisia. The conference included presentations from Arnold Schilder, chairman of the International Auditing and Assurance Standards Board, on International Standards of Auditing; Deborah Williams, chair of the IFAC Professional Accountancy Organization (PAO) Development Committee, on the development of the profession in Africa; and Russell Guthrie, IFAC Executive Director, Quality and Member Relations, on the importance of the IFAC Statements of Membership Obligations. Other speakers included the presidents of OECT and PAFA, Nabil Abdellatif and Major General Sebastian Owuama, and the Tunisian Minister of Finance. A number of conference participants were also invited to attend an Africa-focused session of the PAO Development Committee meeting, held prior to the OECT-PAFA conference.

 

IFAC Deputy President Warren Allen attended the 22nd Audit & Assurance Conference held May 17-18, 2012, in London, organized by the British Accounting and Finance Association’s Auditing Special Interest Group. Mr. Allen, one of the keynote speakers, delivered a presentation, “Developing Global Solutions - A Shared Responsibility,” highlighting the work of the International Auditing and Assurance Standards Board. He also discussed the sovereign debt crisis and the need for global cooperation and interaction in the standard-setting process. The full text of his remarks can be found the IFAC website.

 

IFAC CEO Ian Ball recently attended the International Actuarial Association’s (IAA) biannual meeting where he addressed the IAA Council on the relationship between actuaries and the auditing profession. Mr. Ball discussed the relationship between the IAA and IFAC, the needed cooperation between private sector organizations, auditing standards, and the role of the International Auditing and Assurance Standards Board. Mr. Ball’s presentation is available on the IFAC website.

Open Consultations and Exposure Drafts

 

 

The Professional Accountants in Business (PAIB) Committee has released Eleven Principles for Effective Business Reporting Processes for public comment. The proposed guidance seeks to establish a benchmark for good practice in implementing effective business reporting processes in organizations. It will also help professional accountants in business and their organizations create a cycle of continuous improvement for their business reporting processes thereby assisting stakeholders in making better informed decisions. Comment deadline: August 23, 2012 

The International Public Sector Accounting Standards Board (IPSASB) has issued:
 

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