IFAC News in Brief

1. New Exposure Drafts and Consultation Papers Issued by IESBA, IAESB, and IPSASB 
 

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

 

IFAC recently released the results of the May-June 2012 IFAC SMP Quick Poll, which received 3,678 responses from practitioners operating in small- and medium-sized practices (SMPs) around the world. This edition of the poll, intended to take a snapshot of key challenges and trends influencing SMPs globally, was conducted in 15 languages. The results show that complexity and pace of change of regulations, in particular tax requirements, are a top challenge for both SMPs and their small business clients. Keeping up with new regulations and pressure to lower fees are the top two challenges for practitioners. SMPs identified the burden of regulation followed by economic factors—pressure to lower prices, economic uncertainty, and difficulties accessing finance—as the biggest challenges for their small- and medium-sized entity clients. See these results and more in the full report.

 

A suite of business advisory videos, featuring interviews with two Small and Medium Practices (SMP) Committee members on their experiences and lessons learned as a result of their practices’ expansion into business advisory, are now available. There are 10 videos in the series aimed at helping others avoid common pitfalls and learn from the interviewees’ challenges and successes. Segments include capacity development, marketing and positioning, and keys to success. Videos 1–5 are interviews with Florin Toma, Executive Partner of JPA Romania based in Bucharest, and videos 6–10 are interviews with Stuart Black, Managing Partner of Sydney-based firm Chapman Eastway.
 

The SMP Committee also recently published the article “ISRS 4410: The Standard for Today’s Compilation Engagements,” which highlights the value to SMPs and small- and medium-sized entities. As compilation is a core service that many SMPs provide, the article highlights the versatility of International Standard on Related Services (ISRS) 4410 (Revised) and explains many of its key features. The article, developed originally for IFAC member bodies to adapt or reproduce in their own communications, is now publicly available.
 

Access these free resources and many more from the SMP Committee’s website.

 

The International Accounting Education Standards Board (IAESB) survey designed to inform the development of its strategy and related work plan for 2014-2016 is now available at https://www.surveymonkey.com/s/IAESBStrategySurvey.

The questionnaire, the first stage of the IAESB's 15-month consultation process, seeks feedback on educational challenges facing the accountancy profession. The IAESB's current strategic focus is on the revision of the International Education Standards, adoption and implementation guidance, and communications.

The results of the questionnaire will be used to develop a formal Consultation Paper, to be issued in July 2013, outlining the IAESB's strategic focus and the potential projects that might best support this focus. The deadline for responses is September 19, 2012.

 

The IAESB has released the clarified International Education Standards (IES) 7, Continuing Professional Developmen (Redrafted), which prescribes the continuing professional development (CPD) for professional accountants to develop and maintain their professional competence so as to provide high quality services to clients, employers, and other stakeholders. Professional accountants who develop and maintain professional competence throughout their careers strengthen the public trust in the profession. The IAESB has clarified the obligations of CPD through the redrafting of IES 7 and has drawn international attention to the requirement on professional accountants to develop and maintain professional competence throughout their careers.
 

6. IFAC CEO’s Latest Public Finance Blog Published
 

IFAC Chief Executive Officer (CEO) Ian Ball’s latest Public Finance International blog, Sovereign Balance Sheets: Stranger than Fiction, discusses the rarity and value of the sovereign balance sheet. This is the fourth in a series of blogs written by Mr. Ball and available on the Public Finance International website.

 

The 2012 Handbook of International Public Sector Accounting Pronouncements, 2012 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements and 2012 Handbook of the Code of Ethics for Professional Accountants are currently available online and for order. The International Accounting Education Standards Board is not issuing a new handbook in 2012.

 

• Spanish—Helping Small- and Medium-Sized Practices Meet the Challenges and Seize the Opportunities of Tomorrow (2012)

• Greek—How To Build Your Business Advisory Practice (2011), ISAE 3000 (2010)

• Kazakh—Handbook of International Public Sector Accounting Pronouncements (2011)

• Dutch—Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Second Edition (2010)

• Catalan—Client Acceptance and Continuance Good Practice Guidance (2010)

• Bulgarian—Handbook of International Auditing, Assurance, and Ethics Pronouncements (2008)

• Croatian—Handbook of International Education Pronouncements (2010)

• Arabic—Establishing and Developing a Professional Accountancy Body (2011)

 

 

 

The Compliance Advisory Panel (CAP) recently met at IFAC’s office in New York with a packed agenda. The CAP reviewed a number of recently published Statements of Membership Obligations (SMOs) Action Plans and noted their continued usefulness as strategic plans and documents that illustrate progress made by members and associates. The proposed revised SMOs were discussed in preparation for the next steps in the process following the public consultation earlier this year that resulted in 52 responses. Membership applications were presented and discussed by the CAP—recommendations from the discussion will be made to the IFAC Board at its next meeting in September. Additionally, the Cayman Islands Society of Professional Accountants presented to the CAP on the environment and outlook in the Cayman Islands, a welcome opportunity for the CAP to interact directly with an IFAC associate and hear about its SMO progress.

 

 

The International Ethics Standards Board for Accountants (IESBA) has proposed a change to the definition of “those charged with governance” in its Code of Ethics for Professional Accountants (the Code). The objective of the change is to more closely align the definition of “those charged with governance” in the Code with that in the International Auditing and Assurance Standards Board’s International Standard on Auditing (ISA) 260, Communication with Those Charged with Governance. The IESBA has proposed that in each instance when the Code refers to communication by “those charged with governance” the language should be changed to “those charged with governance or a subgroup thereof.” The change aims to clarify that in cases when a subgroup, such as an audit committee, assists the governing body in meeting its responsibilities, the auditor shall determine with whom within the entity’s governance structure to communicate. Comment Deadline: October 31, 2012

 

The International Accounting Education Standards Board (IAESB) has released for public exposure proposed revisions of International Education Standard (IES) 2, Initial Professional Development—Technical Competence, and IES 3, Initial Professional Development—Professional Skills. Both are part of the IAESB’s project to improve the clarity of its standards, address the development of technical competence and professional skills by an aspiring professional accountant. IESs 2 and 3 also prescribe the knowledge content and the mix of professional skills aspiring professional accountants should acquire during initial career development. The revisions have focused on prescribing learning outcomes that demonstrate the competence required to become professional accountants. Comment deadline: November 1, 2012

 

IAESB has also released IES 4, Initial Professional Development—Professional Values, Ethics, and Attitudes, which prescribes the values, ethics, and attitudes that professional accountants should acquire during the education program leading to qualification. This exposure draft is primarily aimed at IFAC members but will also be of interest to educational organizations, employers, regulators, government authorities, and other stakeholders who support the learning and development of professional accountants. Comment deadline: October 11, 2012

 

The International Auditing and Assurance Standards Board (IAASB) has released a milestone consultation document. The IAASB’s Invitation to Comment (ITC): Improving the Auditor’s Report sets out the indicative direction of the board’s future standard-setting proposals to improve how and what auditors report in accordance with International Standards on Auditing (ISAs). The IAASB invites all stakeholders to respond to this ITC. To access the ITC and submit a comment, visit the IAASB’s website. Comment Deadline: October 8, 2012

 

The International Public Sector Accounting Standards Board (IPSASB) has released for comment the Consultation Paper, Consultation on IPSASB Work Program 2013–2014. It is the first public consultation by the IPSASB on its work program and signals the IPSASB’s intent to continue this practice and consult publicly on future work programs. This public consultation is limited to the work program for the period 2013–2014. The Public Sector Conceptual Framework project, the IPSASB’s highest priority project, is scheduled to be completed in 2014. In addition it is anticipated that public interest oversight and related governance changes for the IPSASB will be implemented in 2014–2015. Comment Deadline: October 31, 2012

The IPSASB has also issued its Consultation Paper, Public Sector Combinations. Its objective is to initiate discussion on the possible accounting treatment for public sector combinations in the general purpose financial statements of an entity that uses accrual-based IPSASs. The Consultation Paper considers matters such as the timing of recognition and the initial measurement basis or approach that could be adopted for the wide range of combinations that may occur in the public sector. Comment Deadline: October 31, 2012