Highlights from the IESBA's December 4-6, 2013 meeting in New York, New York.
00:33 Overview
1:03 Long Association
2:50 Structure of the Code
6:14 Non-Compliance with Laws and Regulation
10:16 Future Strategy and Work Plan
In today’s global economy, there is strong public interest in high quality, relevant assurance on information beyond the audit or review of financial statements. Recognizing this, the International Auditing and Assurance Standards Board (IAASB) today released an updated and enhanced International Standard on Assurance Engagements (ISAE), titled ISAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, which addresses a broad range of assurance engagements.
“The importance of relevant and consistent high quality engagements for assurance services cannot be understated. Preparers and users alike already look to the accountancy profession to provide assurance services on an expansive range of information, and this is anticipated to continue to grow. ISAE 3000 (Revised) provides the platform for practitioners to provide such services, and to develop new assurance services over many different subject matters, while enhancing the quality of such engagements,” noted Prof. Arnold Schilder, IAASB Chairman.
ISAE 3000 (Revised) covers a wide variety of engagements, ranging from assurance on statements about the effectiveness of internal control, for example, to assurance on sustainability reports and possible future engagements addressing integrated reporting. The standard covers both reasonable and limited assurance engagements, and introduces guidance designed to help readers better understand these two levels of assurance.
“ISAE 3000 (Revised) is the overarching standard for current and future topic-specific ISAEs and assurance engagements where no separate ISAE exists. As a result, the IAASB’s revision involved striking an appropriate balance between ensuring that the standard is sufficiently robust, and that it is able to also facilitate innovation in the dynamic and evolving field of assurance,” noted James Gunn, IAASB Technical Director.
Accompanying the release of ISAE 3000 (Revised) are conforming amendments to the International Framework for Assurance Engagements; ISAE 3402, Assurance Reports on Controls at a Service Organization; ISAE 3410, Assurance Engagements on Greenhouse Gas Statements; and ISAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus.
About the IAASB
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC).
About IFAC
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 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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This revised assurance standard deals with assurance engagements other than audits or reviews of historical financial information.
The Notice of the Call for Nominations for the IFAC Board and Committees in 2015 was issued today along with the companion guide, Developing a Nominations Strategy. The Notice of the Call sets out the upcoming opportunities for membership on the Board of the International Federation of Accountants (IFAC), the global organization for the accountancy profession with 179 members and associates in 130 countries, and its Compliance Advisory Panel, Professional Accountancy Organization Development Committee, Professional Accountants in Business Committee, Small and Medium Practices Committee, and Nominating Committee.
For 2015, there are 29 vacancies on the Board and committees, including two leadership positions—the IFAC deputy president and the chair of the Small and Medium Practices Committee. All vacancies on the Board and committees are open for nominations by IFAC Members.
The Nominating Committee encourages all IFAC Members to review the Notice of the Call, including the detailed information regarding open vacancies, composition targets, specific membership qualifications, and requirements for the Board and each committee. It also offers strategic guidance in selecting candidates, including identifying the most qualified nominee for each available position.
The official Call for Nominations will be issued on January 15, 2014, and nominations may be submitted from January 15 to March 15, 2014. The Notice of the Call is issued in advance of the Call for Nominations to allow sufficient time for stakeholders to prepare for the next nominations cycle.
The Nominating Committee follows an open and transparent process in selecting the best candidates for the available positions while also striving to achieve gender, regional, and professional balance. For more information about the Nominating Committee, its due process, or guidance in selecting the best candidate, please visit the Nominating Committee web page.
About IFAC
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 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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Ireland
Eamonn Siggins is chief integration officer at Chartered Accountants Ireland, having previously served as chief executive of the Institute of Certified Public Accountants in Ireland (CPA Ireland). Eamonn previously served as a Technical Adviser for the IFAC Board from 2005 to 2011. Prior to this, he served as a Technical Adviser to two separate chairs of the IFAC Education Committee, the predecessor to the International Accounting Education Standards Board.
Mr. Siggins was elected Chairman of the Edinburgh Group in 2016. He was Secretary to the Edinburgh Group from 2004 to 2010 and has represented CPA Ireland within the Edinburgh Group since its formal establishment.
Prior to joining CPA Ireland, Mr. Siggins retired, with the rank of Captain, from the Irish Defence Forces after 14 years of service in a number of appointments in Ireland and with the United Nations peace keeping force in Lebanon.
Mr. Siggins is an Honours Graduate in Legal Science from the National University of Ireland, Galway, holds post graduate qualifications in Leadership and in Strategy and Innovation. He is also a member of the Institute of Directors.
Ireland
Gail McEvoy served on the IFAC board from November 2013 to November 2019, having been nominated by the Institute of Certified Public Accountants in Ireland (CPA Ireland).
Ms. McEvoy previously served as a Technical Advisor for the IFAC Small and Medium Practices Committee. She is a Principal Partner of McEvoy Craig Accountants & Auditors. Ms. McEvoy is also a Director of the Drogheda Port Company.
A member of CPA Ireland since 1997, Ms. McEvoy served as its President and Vice President from 2010 to 2012. She was elected a Life Member of CPA Ireland in 2015.
Note to Editors: This article is available for IFAC member organizations to publish in their journals and/or websites. Email permissions@ifac.org for access and copyright information.
An audit is probably the most common form of assurance worldwide but it’s not the only one, and in some cases, it might not be the right one. Small- and medium-sized entities (SMEs) are often not required by legislation to have an audit. Lacking the complexity of their larger counterparts, an audit doesn’t necessarily make sense for an SME, and the costs may outweigh the value added for these small operations. There are other forms of assurance that may be more cost-effective and better suited to meet their needs. SMEs can look to their accountants and their statement users to help them determine what level of assurance on their financial statements is most appropriate.
A review engagement, for example, is another form of assurance that can meet the needs of some SMEs without putting an undue strain on time and other resources.
What is a Review Engagement?
A review is a limited assurance engagement. It provides less assurance than an audit but more than a compilation engagement, which offers no assurance. The International Auditing and Assurance Standards Board (IAASB) revised International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements, in 2012. ISRE 2400 (Revised) is designed not only to provide an effective and consistent level of limited assurance on financial statements but also to allow for efficient delivery of the service proportionate to the complexity of the statements reviewed. The revised standard includes strengthened requirements and additional guidance to promote a clearer understanding of the nature of a review engagement.
Merits of a Review Engagement
SMEs that are not required by law to have an audit may still want some level of independent assurance to increase the credibility of their financial statements, for example, when seeking a loan from a bank. In these cases, a review can be an ideal solution. Additionally, since the work effort involved in performing a review engagement is generally less than that in conducting an audit, a review should be a more cost-effective option while still involving the financial reporting expertise of an independent professional accountant.
When to Conduct a Review Engagement
Under ISRE 2400 (Revised), a review engagement may only be performed when it both serves a rational purpose and is appropriate under the circumstances. An engagement without a rational purpose, for example, is one in which management unreasonably restricts the practitioner’s inquiries to specific individuals. A review may not be appropriate, for example, for complex entities, such as banks or insurance companies, for which inquiry and analytical procedures alone may not reduce engagement risk sufficiently. In these cases, an audit or a compilation engagement may be more appropriate.
Where Can I Learn More?
The IFAC Small and Medium Practices (SMP) Committee has developed a comprehensive guide to help IFAC member organizations and their members in practice, especially SMPs, understand and implement ISRE 2400 (Revised). The Guide to Review Engagements is planned for release in December 2013, which is also when the updated standard goes into effect (effective for periods ending on or after December 31, 2013).
Practitioners can use the guide to develop a deeper understanding of a review engagement conducted in compliance with ISRE 2400 (Revised) through explanation and illustrative examples. The guide also includes a number of appendices with key checklists and forms that practitioners can adapt to meet the requirements and circumstances in their particular jurisdiction.
The International Federation of Accountants (IFAC), the global organization for the accountancy profession, held its 36th Council Meeting in Seoul, South Korea, last week. As part of the meeting, IFAC held its annual seminar, Strengthening the Links of the Financial Reporting Supply Chain.
The seminar focused on the elements necessary to support high-quality financial reporting, including the drivers of audit quality, and the importance of oversight and regulation.
“Financial reporting and analysis are the foundations of economic development and efficient capital markets. They contribute to the integrity, accountability, and sustainability of our global economy,” said IFAC CEO Fayez Choudhury. “This year’s seminar looked at certain components of the financial reporting supply chain, how they can each be strengthened, and how the links and interactions between them can also be strengthened. This is essential for economic and social progress.”
“The speakers identified two important overarching challenges: understanding the interconnectedness of the components of the financial reporting supply chain, and the importance of sufficient talent and capacity at every stage of the chain,” continued Choudhury.
The seminar included high-profile speakers, including Albert Au, Chair, BDO Limited and SMP Committee member; Kenneth Chatelain, Partner, PwC Public Policy & Regulatory Affairs; Robert Dohrer, Global Leader, Quality & Risk, RSM International Limited; In-Ki Joo, Professor of Accounting, Yonsei University; Olivia Kirtley, Deputy President, IFAC; David Maxwell, Partner, Grant Thornton; Hwi Joon Park, former Vice President, Woori Investment & Securities; Tong-Wook Shim, Senior Vice President and Head of Finance, POSCO; Janine van Diggelen, Vice Chair, International Forum of Independent Audit Regulators; Kenneth Yap, CEO, Singapore Accounting and Corporate Regulatory Authority; Jae-hoon Yoo, Standing Commissioner of the Securities and Futures Commission under the auspice of the Financial Services Commission; and Kyung-Sik Yoon, Head of the Audit Quality Control Supervisory Service, KICPA. Warren Allen, IFAC President, Arnold Schilder, IAASB Chairman, and Lee White, CEO, Institute of Chartered Accountants Australia, moderated the sessions.
About IFAC
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 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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The International Federation of Accountants (IFAC), the global organization for the accountancy profession, today announced its new Board members and new member bodies, decided at its annual Council Meeting.
Four members were elected to the IFAC Board: Gail McEvoy (Ireland), Michael Hathorn (United Kingdom), Sebastian Owuama (Nigeria), and Wienand Schruff (Germany). The IFAC Council also re-elected Ana Maria Elorrieta (Brazil) and Robert Harris (United States). In addition to enhancing the diversity of the IFAC Board—in terms of gender, geography, and professional experience—these Board members contribute skills and expertise that will help IFAC move forward in its areas of strategic focus.
IFAC admitted the Institute of Management Accountants as a member. In addition, three existing associates were admitted to the organization as members:
Five new associates were admitted to the organization:
Finally, the Association of Corporate Treasurers became an IFAC affiliate. For a full listing of IFAC members, see the membership section of IFAC’s website.
“We are delighted to include these organizations,” said IFAC Chief Executive Officer Fayez Choudhury. “IFAC has many synergies with the Institute of Management Accountants and Association of Corporate Treasurers, particularly in light of our focus on the important role played by professional accountants in business in the global economy. In addition, many of the new members and associates are based in emerging and transitioning countries, and the profession plays a critical role in supporting the development of their local economies and societies. We welcome them into the global profession and look forward to working together to advance IFAC’s mission of supporting global economic growth and development.”
About IFAC
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 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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Note to Editors – IFAC Board Members November 2013-November 2014:
Warren Allen (President)
Olivia Kirtley (Deputy President)
Carol Bellringer, Canada
Norunn Byrkjeland, Norway
Dr. Yugui Chen, China
Pamela Monroe Ellis, Jamaica
Ana Maria Elorrieta**, Brazil
Rachel Grimes, Australia
Ahmadi Hadibroto, Indonesia
Robert Harris**, United States
Michael Hathorn*, United Kingdom
Prof. In-Ki Joo, Republic of South Korea
Russell Loubser, South Africa
Gail McEvoy*, Ireland
Sebastian Owuama*, Nigeria
Jacques Potdevin, France
Ganapathy Ramaswamy, India
Marta Rejman, United Kingdom
Wienand Schruff*, Germany
Makoto Shinohara, Japan
Masum Turker, Turkey
Steven Vieweg, Canada
* New IFAC Board members as of November 2013
** IFAC Board member reappointed for a second term in November 2013
Prof. Linda de Beer has been approved as the chair of the Consultative Advisory Group (CAG) to the International Auditing and Assurance Standards Board (IAASB) by the Public Interest Oversight Board (PIOB)* on the recommendation of the members of the IAASB CAG**. The approval of Prof. de Beer extends her leadership, the first term of which commenced on October 1, 2010, for an additional 18-month period that will end on March 31, 2015.
The IAASB CAG is an independent body of 32 key stakeholders of the IAASB—including regulators, preparers, international investor and user groups, and others with an interest in international auditing and assurance—that provides strategic and technical advice in the public interest to the IAASB. The chair of the CAG plays a key role to ensure that the views of the CAG are heard and considered in the IAASB’s deliberations. The IAASB is an independent standard-setting board that establishes International Standards on Auditing (ISAs) and other pronouncements for use by professional accountants around the world. The PIOB oversees the activities of the IAASB and of the CAG.
Prof. de Beer, who, before her election as chair represented the World Federation of Exchanges on the CAG, is an independent director on a number of listed company boards in South Africa and an advisor on reporting and corporate governance matters, inter alia, the Johannesburg Stock Exchange (JSE). She is also a visiting professor in Audit and Accounting at the University of the Witwatersrand in Johannesburg, and a member of the King Committee on Corporate Governance and a number of South African standard-setting structures. She was also recently appointed as chairman of the Financial Reporting Investigations Panel.
“I am humbled and honored to be re-elected into this position by my CAG colleagues. The esteemed CAG Member Organizations and their Representatives bring a broad range of skills and experiences from across sectors and jurisdictions to the table in informing the work of the IAASB and serving the interest of the public at large. The CAG plays a vital role in ensuring that recipients of assurance services—including preparers and users of financial information as well as regulators—have an appropriate voice in the process of setting standards,” said Prof. de Beer. “In the past three years I have represented the CAG at the IAASB meetings, I have seen remarkable progress, under Arnold’s leadership, in the honest and serious attention that is given to the views of non-auditor stakeholders in the setting of standards for auditors. As a result, significant strides have been made in enhancing the value of an audit, the legitimacy of the auditing profession and thus in serving the public interest.”
Commenting on Prof. de Beer's re-appointment, Prof. Arnold Schilder, chairman of the IAASB, said, “Linda brings a wealth of experience to her leadership role on the IAASB CAG. Her experiences, in South Africa and globally, give her valuable insight, and we are very pleased to be able to continue to work with her. ”
About the IAASB
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC).
About IFAC
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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
* The Public Interest Oversight Board (PIOB)
Established in 2005 as the oversight board for the global accountancy profession, the PIOB oversees IFAC's public interest activities with the objective of increasing the confidence of investors and others that such activities, including the setting of standards, are properly responsive to the public interest. The PIOB oversees the activities of the IAASB and of the CAG and, as one element of this oversight, establishes the criteria for their due processes and working procedures. PIOB members are nominated by international institutions and regulatory bodies.
** IAASB CAG Members
IAASB CAG Observers
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