IFAC News in Brief
 

Policy Position Paper 6, Global Regulatory Convergence and the Accountancy Profession, sets out IFAC’s belief that the global public interest is best served by consistent global adoption and implementation of high-quality, internationally accepted financial reporting, auditing, assurance, public sector accounting, accounting education, and ethics standards (including independence requirements for auditors), and by use of these standards for reporting financial information for capital and debt markets. Global regulatory convergence assists in providing solutions to problems highlighted by the global financial crisis, and is critical for the evolution of a sound, global financial system.

 

In support of its commitment to explore standards for services that meet the unique needs of small- and medium-sized entities (SMEs), the International Auditing and Assurance Standards Board (IAASB) has released International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements. The project was undertaken in the context of the IAASB’s strategic focus to develop standards to address market demand for assurance services other than audits that meet the needs of small- and medium-sized entities (SMEs) and users of their financial information. 
 

International Accounting Education Standards Board (IAESB) Senior Technical Manager David McPeak recently co-authored “The International Accounting Education Standards Board: Influencing Global Accounting Education,” focusing on the importance of International Education Standards, for the journal Issues in Accounting Education. The article is part of the American Accounting Association (AAA)'s “Thought Leaders in Accounting” series. Mr. McPeak co-authored the article with Professor Emeritus Gary L. Sundem, president of the International Association for Accounting Education and Research at the University of Washington’s Foster Scholl of Business, and AAA President Karen V. Pincus, professor and Doyle Z. and Maynette Derr Williams Chair in Professional Accounting at the University of Arkansas’ Sam M. Walton College of Business.

 

A special edition of eNews, The Role of Professional Accountants in the Sustainability of Small Businesses, was recently published by the Professional Accountants in Business (PAIB) and Small and Medium Practices (SMP) Committees. The issue highlights the activities of IFAC member organizations that are increasingly addressing small- and medium-sized entities (SMEs), sustainability, and the role of accountants. In sharing these activities—including reports, guidance, surveys, events, and award programs—the committees look to facilitate information sharing and promote how professional accountants can work with SMEs to improve their environmental, social, and governance (ESG) performance.

 

The Member Body Development Team continues to receive Statements of Membership Obligations (SMO) Action Plan updates from members, including plans from the Ordre des Experts-Comptables et des Comptables Agréés du Bénin and the Institute of Certified Accountants of Montenegro (ICAM), both of which joined IFAC as associates in 2011. Additionally, IFAC has received the first-ever SMO Action Plan developed by a member body and a non-member professional accountancy organization. The plan from the Instituto Guatemalteco de Contadores Públicos y Auditores (Guatemala Institute of Public Accountants and Auditors) was developed in conjunction with the Colegio de Contadores Públicos y Auditores de Guatemala (Guatemalan Association of Certified Public Accountants) to provide a more complete view of the situation in Guatemala. All submitted SMO Action Plans are available on the IFAC website in the Membership & Compliance Program section. 

 

Last month, IFAC launched the SMP Community on LinkedIn as a closed group for representatives of IFAC member organizations who are focused on small- and medium-sized practices (SMP) and small- and medium-sized entity (SME) issues. The objectives of the group are to facilitate sharing, networking, and collaboration among IFAC members on SMP-related issues and to elicit feedback via instant polling and comments. IFAC aims to get 1-2 qualified individuals from each member organization to join in the conversation on behalf of their organization and region. So far, approximately 40 IFAC member organizations are represented. Recent discussions have focused on forming SMP committees, IFRS for SMEs, and integrated reporting.
 

If your organization does not have a representative in the community, please email PaulThompson@ifac.org or request to join by clicking “Join SMP Community.” As a reminder, IFAC has an open LinkedIn group, which all are encouraged to join by clicking “Join IFAC Group.”

 

IFAC Chief Executive Officer (CEO) Ian Ball’s latest Public Finance International blog, "Debts, deficits, and democracy", has been published. This edition of the blog discusses the fiscal behavior of voters and politicians in democracies.

 

IFAC is searching for a Technical Director to supervise and coordinate the work of the International Ethics Standards Board for Accountants. Qualified candidates will have senior-level accounting experience, including significant technical experience and a deep working knowledge of ethical and independence standards, in particular, the Code of Ethics for Professional Accountants. Visit Working at IFAC to learn more. Qualified candidates should send a resume and salary requirements to jobs@ifac.org.

 

Hard copies of the public sector accounting, audit and assurance, and ethics handbooks are now available to purchase or download: 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. The International Accounting Education Standards Board is not issuing a new handbook in 2012. Discounts are available for students, educators, those living in World Trade Organization developing countries, and bulk purchases.

 

• Albanian—New IFAC Publication Provides Support for Professional Accountants Improving Internal Control (2012)

• Arabic—Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition (2011)

• Azeri—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)

• Italian—How to Cope with Pressure to Lower Fees (2012), SMP-Quality-Control-Guide-Orientation-Slides (2012), Guide to Quality Control for Small- and Medium-Sized Practices, Third Edition (2011), Guide to Practice Management for Small- and Medium-Sized Practices, Second Edition (2011)

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

• Russian—Handbook of International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements - Part I (2010)

• Spanish—IPSAS 32 and Improvements to IPSASs (2011)

 

 

To further inform stakeholders about its important auditor reporting initiative, the International Auditing and Assurance Standards Board (IAASB) held two of three global roundtables in September. The third and final roundtable will be held October 8, 2012 in Kuala Lumpur, Malaysia. These events will bring together representatives from a broad range of stakeholder groups to share perspectives on the IAASB’s suggested improvements to the auditor’s report featured in its June 2012 Invitation to Comment. Space is still available for the roundtable being held in Kuala Lumpur, and the IAASB is particularly interested in attracting additional participants to represent the views of investors and preparers. For more information, please visit the IAASB’s Roundtable web page.

The Professional Accountants in Business (PAIB) Committee recently held a meeting in the IFAC office in New York. Among other topics discussed were the Strategy and Work Plan 2013-2016, which will be released for consultation in October, and the final guidance on effective business reporting processes, released earlier in 2012 as an exposure draft. The committee also approved a new report on integrating governance into organizations to achieve sustainable success, which will be released in October 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
 

Dan Montgomery, deputy chair of the IAASB and chair of its Auditor Reporting Task Force, spoke to Accountancy Age about the IAASB’s ITC on auditor reporting reform. For more press coverage of the June 2012 ITC, see the IAASB’s Auditor Reporting page.

 

The International Accounting Education Standards Board (IAESB) has 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 IAESB has also released for public exposure proposed revisions of 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 and address the development of technical competence and professional skills by an aspiring professional accountant. IESs 2 and 3 also prescribe the knowledge content and mix of professional skills aspiring professional accountants should acquire during initial career development. The revisions focus on prescribing learning outcomes that demonstrate the competence required to become professional accountants. Comment Deadline: November 1, 2012

Additionally, the IAESB has released proposed revisions of IES 8, Professional Development for Engagement Partners Responsible for Audits of Financial Statements, which is part of a project to improve the clarity of the IAESB’s eight standards. Each standard addresses an aspect of developing the technical competence, professional skills, and professional values, ethics, and attitudes of an aspiring professional accountant or aspiring engagement partner. Comment Deadline: December 11, 2012

 

The International Ethics Standards Board for Accountants (IESBA) has proposed a change to the definition of “those charged with governance” in 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 IESBA has also released Responding to a Suspected Illegal Act, which addresses a professional accountant’s responsibilities regarding the disclosure of suspected illegal acts committed by a client or employer. The proposals describe the circumstances in which a professional accountant is required or expected to breach confidentiality and disclose the act to an appropriate authority. The IESBA proposes adding two new sections addressing illegal acts to the Code of Ethics for Professional Accountants—one each for professional accountants in public practice and in business—and several revisions to other related sections. Comment Deadline: December 15, 2012
 

The IESBA recently spoke to Stuart Gittleman of Thomson Reuters, Compliance Complete, Tammy Whitehouse of Compliance Week, and Kathleen Hoffelder at CFO.com on the proposed changes to address illegal acts. See the press coverage in the IESBA In the News pages.

 

The International Public Sector Accounting Standards Board (IPSASB) has released for comment, 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 the 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 entities that use accrual-based International Public Sector Accounting Standards (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