- summarizes the most important pitfalls in current risk management & internal control (RM/IC) practice;
- provides insight into current thinking on risk management and internal control;
- outlines key concepts contained in the most important risk management and internal control guidelines;
- discusses the impact of these developments and approaches for organizations; and
- identifies and discusses other emerging trends related to risk management and internal control.
PAIB eNews August 2013
Newsletters & eNews
Aug 13, 2013
New York, New York
PAIB eNews August 2013
Welcome to IFAC’s Professional Accountants in Business (PAIB) Committee eNews.
Internal Control and Risk Management
3. Revised COSO Framework: IFAC Review Available for Publication
4. Sharing Best Practice on Risk Management and Internal Control
Next PAIB Committee Meeting
11. Next Meeting of Professional Accountants in Business Committee
IFAC and the Chartered Institute of Public Finance and Accountancy (CIPFA) issued a Consultation Draft, Good Governance in the Public Sector, to promote the development of robust governance. The Consultation Draft looks to establish a benchmark for good governance in the public sector at both the government and individual public sector entity levels. The Consultation Draft was developed with input from representatives of relevant international organizations. Public sector representatives and other public sector stakeholders are encouraged to respond to the proposed framework to help improve its applicability to public sector entities at all levels internationally. Comments are requested by September 17, 2013.
IFAC member and regional organizations are invited to publish the supporting article, “New Guidance Aims to Improve Public Sector Governance,” in their journals, newsletters, website, and other forums. The article can also be tailored to suit the needs of each organization and membership. Email firstname.lastname@example.org for permission to translate or reproduce.
Governance is also discussed in What are the Overarching Principles of Corporate Governance? from the Institute of Chartered Accountants in England and Wales (ICAEW). The thought piece encourages corporate boards to focus on a set of simple but fundamental principles of corporate governance. It also outlines five short, purposeful, and aspirational overarching principles that apply to a wide range of companies. These principles should serve to remind corporate boards, and their stakeholders, what corporate governance should look like if a company is to meet its business purpose and other responsibilities.
Internal Control and Risk Management
In response to the publication of the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Internal Control-Integrated Framework in May (see PAIB Committee eNews May 2013 for details), IFAC has written a review discussing the changes in the new COSO publication and the work still to be done. “Revised COSO Framework: Improved but Further Adjustments Warranted” outlines recommendations COSO should take up in future revisions to make the Framework more relevant to a broader global community. This article is also available for publication by member bodies. Email email@example.com for permission to translate or reproduce.
IFAC staff recently gave a presentation on risk management, internal control, and the COSO Framework at the 94th Annual Institute of Management Accountants (IMA) Conference in New Orleans, US. The presentation, made with J. Stephen McNally of the Campbell Soup Company, outlines some of the pitfalls many organizations face with their current systems of risk management and internal control. Vincent Tophoff, IFAC senior technical manager, and Mr. McNally also addressed the changes in the newly revised Internal Control-Integrated Framework from COSO.
IFAC staff also recently gave a presentation on the effective integration of risk management and internal control, especially as it relates to the International Organization for Standardization (ISO)’s standard on risk management, ISO 31000 – Risk Management, at the Second International Conference on ISO 31000 in Toronto, Canada.
IFAC responded to the landmark Consultation Draft of the International Integrated Reporting Framework, published in April by the International Integrated Reporting Council (IIRC). In its comment letter, IFAC recommends, for example, adjusting the Framework to encourage a principles-based, rather than a rules-based, approach to integrated reporting and advocates that it should be the individual organizations that determine their intended audiences, instead of the blanket assumption that integrated reports are primarily for providers of financial capital. The IIRC is now in the process of analyzing the 350 responses it received to the proposed Framework.
The Global Reporting Initiative (GRI) released a new survey report reviewing different ways integrated reports are taking shape around the world. The Sustainability Content of Integrated Reports—A Survey of Pioneers looks at 756 reports published from 2010 to 2012 following GRI Guidelines and surveys 52 organizations that issued integrated reports during all three years.
The World Forum on Natural Capital, an UN-backed event, will be held in Edinburgh, UK, November 21-22, 2013. The event will be the first major global conference devoted to putting an economic value on natural capital (additional information on natural capital is available in Special Edition eNews—Accounting for Natural Capital). Synergies between public and private sector natural capital accounts will be explored, as will the links with integrated reporting and the issues affecting different sectors. The conference is organized by the Scottish Wildlife Trust in association with the United Nations Environment Programme, World Business Council for Sustainable Development, International Union for Conservation of Nature, TEEB for Business Coalition, and the Wildlife Trusts. IFAC stakeholders are being offered a 10% discount on registration (promotional code IFAC10 when registering). Additional information, including the program, is available at www.naturalcapitalforum.com. Early bird registration closes September 12, 2013.
The Institute of Chartered Accountants of Scotland (ICAS) has announced its 2013 essay competition to encourage debate regarding sustainability in business. Entry is open to all accountants and students globally. Professionals and students in related fields are also encouraged to apply. Full details, including competition rules and topic details, can be found at http://icas.org.uk/sustainabilityprizeessay/. The competition, sponsored by Grant Thornton UK LLP, closes on September 30, 2013.
The NYSE Euronext is the newest member of the United Nations’ Sustainability Stock Exchanges (SSE) Initiative. The initiative aims to “explore how exchanges can work together with investors, regulators, and companies to enhance corporate transparency on environmental, social, and corporate governance issues and encourage responsible long-term approaches to investment.” In announcing its participation, Duncan L. Niederauer, CEO of NYSE Euronext, said, "As the only carbon neutral global exchange group, we are proud to join the SSE initiative and partner with the UN and our industry to support best practices in corporate governance and transparency related to corporate sustainability. We lead by example by running our business in an environmentally responsible manner, and by leveraging the unique power of our platform and our NYSE Euronext community, we empower learning and collaboration within the broader corporate sector."
The latest IFAC SMP Quick Poll results showed that the vast majority, 73%, of the nearly 4,000 small- and medium-sized accounting practitioners (SMPs) surveyed are either currently providing or have plans to provide sustainability services to their clients, suggesting there is a sizable market for these services among the small businesses that SMPs typically serve. Results varied somewhat by size of practice and region. The larger the size of the SMP, the more likely it was to be offering sustainability services.
Next PAIB Committee Meeting
The next meeting of the PAIB Committee will be hosted by the Chinese Institute of Certified Public Accountants (CICPA), October 14-15, in Beijing, China. It will be followed by a forum on October 16, 2013, at the CICPA offices. Additional information on the forum, which will be open to the public, will be made available in coming issues of eNews.