PAIB eNews: August 2012
Newsletters & eNews
Aug 14, 2012
New York, New York
PAIB eNews: August 2012
Welcome to IFAC’s Professional Accountants in Business (PAIB) Committee eNews
In this Issue:
- Internal Control Guidance Released
- Reminder: Deadline Approaching for Comments on Proposed Business Reporting Processes Guidance
- Update on COSO
- Final Kay Review of Equity Markets Released
- Recent News, Events, and Publications of Interest
1. Internal Control Guidance Released
The PAIB Committee recently issued new International Good Practice Guidance, Evaluating and Improving Internal Control in Organizations, highlighting areas where the practical application of existing internal control standards and frameworks often fails in many organizations. The new guidance will assist professional accountants in business as they work with their organizations to continuously evaluate and improve internal control, and ensure that it is an integrated part of the organization’s systems of governance and risk management. Better integrated internal controls can save the organization time and money while helping to create and preserve value.
This guidance helps professional accountants in business ensure their organization has sound internal control practices that are continuously adapted to changing circumstances, a critical function. Organizations are most successful when they can take advantage of opportunities and defend against threats, both of which are enabled by an appropriate system of internal control.
The guidance also helps organizations evaluate and review their internal controls at all levels and within all functions to continue to achieve their objectives. Using this guidance, professional accountants in business can help lead their organization through this process to further improve internal control.
2. Reminder: Deadline Approaching for Comments on Proposed Business Reporting Processes Guidance
The deadline for submitting comments for the proposed guidance Eleven Principles for Effective Business Reporting Processes is fast approaching—August 23, 2012. The 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.
3. Update on COSO
The Advisory Council of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), in which IFAC participates, met in July 2012 to discuss the comments received on the Exposure Draft of the proposed Internal Control—Integrated Framework (the draft Framework and received comments are available on the COSO website). COSO is also developing a compendium, Internal Control over External Financial Reporting—Approaches and Examples, which will be released for public consultation in September 2012 with a revised version of the Framework.
4. Final Kay Review of Equity Markets Released
The UK Department for Business Innovation and Skills has released The Final Report of the Kay Review of UK Equity Markets and Long-Term Decision Making, a wide-ranging, UK-government sponsored review and report that analyzes problems with financial markets in the UK and their relationships with investors and businesses. The Kay Review highlights and explores in depth many of the issues discussed in IFAC’s 2012 report Investor Demand for Environmental, Social, and Governance Disclosures: Implications for Professional Accountants in Business. The report’s findings and 17 recommendations, including a proposal for companies to cease managing short-term earnings expectations and announcements, may also usefully apply to nations and economies other than the UK. The Institute of Chartered Accountants of England and Wales (ICAEW) has expressed its support for the Kay Review in a press release, adding that in addition to removing the mandatory requirement for quarterly reporting “those firms that wish to continue reporting on a quarterly basis—perhaps in response to the demands of their shareholders—should be free to do so.” The ICAEW also submitted a response to the initial draft of the Kay Review.
5. Recent News, Events, and Publications of Interest
- Fédération des Experts Comptables Européens (FEE) has released a new Discussion Paper, The Functioning of Audit Committees, which aims to put the European Commission’s audit-related initiatives and proposals into perspective and address reporting to and from the audit committee. The comment deadline is September 28, 2012.
- The International Integrated Reporting Council (IIRC) has released its Draft Outline of the Integrated Reporting Framework. The IIRC plans to release a prototype Framework later in 2012, a Draft Framework in early- to mid-2013, and a “version 1.0” in late 2013.
- The Association of Chartered Certified Accountants has published Confidence Accounting: A Proposal, which looks at the accuracy of numbers in published reports. The comments deadline is December 31, 2012.
- Nederlandse Beroepsorganisatie van Accountants has published Corporate Social Responsibility: CSR for SME Accountants, designed to provide practical guidance for professional accountants working with small- and medium-sized enterprises on getting started with corporate social responsibility (CSR).
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