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IFAC PAIB eNews - April 2011
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April 6, 2011
Welcome to IFAC's PAIB Committee eNews.
In This Issue:
1. Updated Sustainability Framework Published
2. Integrating the Business Reporting Supply Chain Features Recommendations from Key Business Leaders
3. New Risk Management and Internal Control Survey Published
4. IFAC Invited to Participate in Update of COSO Internal Control - Integrated Framework
5. New UNCTAD Book on Governance Includes Chapter from IFAC CEO
6. PAIB Committee Chair Presents Keynote Address at CFO Conference
7. Practice Management Guide for SMPs Includes Content for PAIBs
8. PAIB Committee to Meet in Australia in May
1) Updated Sustainability Framework Published
The Professional Accountants in Business (PAIB) Committee recently updated the IFAC Sustainability Framework, designed as a tool for accountants around the world to accomplish the integration of sustainability within an organization's strategy, operations, and reporting. Through key considerations developed from examples and opinions from major international corporations, smaller firms, and leaders from around the world, the Framework provides a comprehensive global view of some of the current best practices in each of these areas.
The Framework addresses sustainability from three key perspectives:
• Business strategy: By taking a strategic approach, accountants encourage their organizations to allow sustainability considerations to inform all aspects of an organization's planning--vision and leadership, strategic planning, objectives, goals and targets, governance, accountability, and risk management.
• Operations: By looking at all management and management accounting activities through the lens of sustainability, accountants can help implement an organization's sustainability goals to support higher-quality information and more informed decision making.
• Reporting: By considering how organizations can improve the usefulness of their external communications and reporting, accountants can lead the way in developing a reporting and disclosure strategy that will yield high-quality reports that provide a more complete picture of an organization's performance. This perspective also includes practical guidance on how to implement sustainability and integrated reporting.
The Framework can be accessed on the International Center for Professional Accountants in Business as a digital magazine and a downloadable PDF. Additionally, articles discussing the Sustainability Framework in more detail are available for organizations wishing to provide their membership with additional information. Please contact communications@ifac.org for permission and copies of these articles.
For those interested in additional information on integrated reporting around the world, please refer to the International Integrated Reporting Committee's website.
2) Integrating the Business Reporting Supply Chain Features Recommendations from Key Business Leaders
IFAC recently published Integrating the Business Reporting Supply Chain, a report based on recommendations from key business leaders around the world. The interviewees represent a diverse range of professional backgrounds, nationalities, industries, and perspectives; therefore, a broad range of opinions were compiled to determine a communal outlook on improving governance in organizations, financial reporting, financial auditing, and steps toward integrated business reporting.
Overall, the interviewees agreed on the following main points, among others:
• The primary responsibility of directors is performance, not compliance.
• Organizations should expand their view from a shareholder perspective to a stakeholder perspective.
• Organizations should take economic, as well as social and environmental performance, factors into account.
• Organizations should better integrate governance and sustainability in strategy, operations, and stakeholder communications.
• Organizations should further improve their stakeholder communications.
Additionally, IFAC published the fourth article in the series on how to improve business reporting, corporate governance, and auditing in the aftermath of the financial crisis, titled "A Global Language for Business Reporting." All four articles, the final report, and summary of key recommendations, highlighting the common themes and key recommendations from the interviews, are available on the Financial Reporting Supply Chain project page of the IFAC website.
3) New Risk Management and Internal Control Survey Published
The PAIB Committee recently published the results of a survey project, created with the support of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and designed to determine what is needed to strengthen risk management and internal control on a global basis. Risk Management and Internal Control Survey, provides an analysis of the survey results, as well as respondents' proposed next steps.
The survey results show a need for risk management and internal control systems to be better and more fully integrated into the governance, strategy, and operations of an organization, and risk management and internal control guidelines to be combined into one set of integrated guidelines. For further details, please see the full report on the International Center for Professional Accountants in Business website.
4) IFAC Invited to Participate in Update of COSO Internal Control - Integrated Framework
As a direct result of IFAC's collaboration with the Committee of Sponsoring Organizations of the Treadway Commission (COSO), IFAC is participating in the COSO Internal Control - Integrated Framework update initiative, which will take place during 2011. As discussed in the Risk Management and Internal Control Survey, COSO has published one of the most widely used internal control frameworks.
This project is intended to help organizations around the world better assess, design, and manage internal control in a business environment (for more information, please see COSO's press release announcing the project). As part of the update project, COSO is requesting feedback from those familiar with the original internal control Framework. COSO has posted a survey online, also available through COSO's website, with questions for users of the Framework--what is still relevant, what is missing, and what needs to be updated.
Professional accountant in business Cees Klumper from Geneva, Switzerland is serving as the IFAC representative on COSO's Advisory Board and IFAC staff member Vincent Tophoff has an observer seat. IFAC's input will be based on the outcomes of the risk management and internal control survey, as well as on the other materials developed in this area. If you have any queries, suggestions, or comments about this update, please contact Vincent Tophoff at vincenttophoff@ifac.org.
5) New UNCTAD Book on Governance Includes Chapter from IFAC CEO
The United Nations Conference on Trade and Development (UNCTAD) recently published Corporate Governance in the Wake of the Financial Crisis: Selected International Views. IFAC CEO Ian Ball contributed the chapter "From Conformance to Performance: Linking Governance, Strategy, and Sustainability," which discusses how professional accountants and IFAC each support effective governance in organizations and offers a number of recommendations to further improve governance, with the goal of creating more sustainable organizational value, economies, and societies. The book includes chapters written by The World Bank, the International Organization of Securities Commissions, and the Organisation for Economic Co-operation and Development, among other organizations. The book is accessible from the Governance and Ethics section of the PAIB Committee website.
6) PAIB Committee Chair Presents Keynote Address at CFO Conference
Roger Tabor, the chair of the PAIB Committee, was the keynote speaker at a CFO conference, "Scaling New Heights, Facing New Challenges," in Karachi, Pakistan, sponsored by the Institute of Chartered Accountants in Pakistan. His presentation focused on the needs and opportunities for professional accountants in the context of challenges for businesses, governments, and regulators, as well as additional details about the various capacities in which PAIBs operate.
The presentation is available in the Speeches section of the Media Center on the IFAC website.
7) Practice Management Guide for SMPs Includes Content for PAIBs
The Small and Medium Practices (SMP) Committee's Guide to Practice Management for Small- and Medium-Sized Practices includes topics regarding starting and growing a small practice, but also discusses issues of risk management, client relationship management, technology, and succession planning, all of which might be helpful for PAIBs in supporting their organizations or clients. The guide is available online through the Publications and Resources section of IFAC's website.
8) PAIB Committee to Meet in Australia in May
The Institute of Chartered Accountants in Australia and CPA Australia will host the next meeting of the PAIB Committee in Melbourne, Australia, May 11-13, 2011. A PAIB Forum will also be held in conjunction with the committee meeting.
To comment or inquire about any of the items mentioned above or for questions about the PAIB Committee, please contact communications@ifac.org.
About the PAIB Committee and IFAC
The PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, financial services, the public sector, education, and the not-for-profit sector. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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