IFAC, IPSASB Represented at World Bank Group-IMF Seminar

New York, New York English

IFAC Chief Executive Officer Fayez Choudhury and International Public Sector Accounting Standards Board (IPSASB) Deputy Chair Ron Salole recently participated in a World Bank Group-International Monetary Fund (IMF) seminar, “Strengthening Fiscal Transparency and Government Accounting,” held Tuesday, October 8 in Washington, DC.

The seminar was part of the World Bank Group-IMF 2013 Annual Meeting, bringing together central bankers, ministers of finance and development, private sector executives, and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Bertrand Badré, Managing Director and World Bank Group Chief Financial Officer, delivered a welcome address to the seminar participants, followed by a keynote speech from Gerd Schwartz, Deputy Director, IMF Fiscal Affairs Department.

Messrs. Choudhury and Salole were panelists for “Improving Government Accounting,” chaired by Charles McDonough, Vice President and Controller of the World Bank. The panel explored the importance of accrual accounting, opportunities and challenges with its implementation, and the role that the International Public Sector Accounting Standards (IPSASs) play for transparency and quality of government accounting.

"Sound government finances directly contribute to the efforts to restore or gain confidence in the public sector,” Mr. Badré said. “It is an important step in building trust in governments as the transparency, reliability, and accountability that result from such practices support value for taxpayer’s money.”

“IFAC’s support of high-quality international standards for the public sector will be instrumental in promoting more comprehensive and reliable fiscal reporting by governments around the world,” said Mr. Schwartz.

“Poor governmental reporting represents a threat to global financial stability and economic growth that must be addressed,” Mr. Choudhury said, citing the 2012 IMF paper Fiscal Transparency, Accountability and Risk, which highlighted the seriousness and extent of current inadequacies in governments’ fiscal reporting and accountability and underscored the risks associated with them.

“IFAC has long recognized that a fundamental way to protect the interests of the public and investors is to develop, promote, and enforce a common set of high-quality international financial reporting standards for the public sector,” he added. “That is why the IPSASB, an independent standard-setting board, was created to develop IPSASs.”

“We see the adoption of IPSASs as important to all economies around the world,” said Mr. Salole. “Additionally, there are some advanced economies that still follow cash accounting and we see this as inadequate in terms of governmental reporting.”

The event also featured regional briefings, press conferences, and other events focused on the global economy, international development, and the world's financial systems. The IMF also used the seminar to launch the new Fiscal Transparency Code, which will serve as a basis for a renewed push for greater fiscal transparency.

About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC. The IPSASB receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the Chartered Professional Accountants of Canada, the South African Accounting Standards Board, and the governments of Canada, New Zealand, and Switzerland.

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.

 

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IESBA eNews: September 2013 Meeting Summary

New York, New York English

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA, the Ethics Board). This edition provides a summary of decisions made at the Ethics Board’s meeting held September 16-18, 2013, in Sydney, Australia. See the Meeting Page for the meeting highlights, including a podcast summary and agenda papers

Responding to a Suspected Illegal Act

The Ethics Board considered an alternative to the approach set out in the Exposure Draft, Responding to a Suspected Illegal Act, regarding a professional accountant’s responsibilities when encountering a suspected illegal act. Among other matters, the Ethics Board:

  • Discussed and agreed to align the term “illegal act” with the term “non-compliance with laws or regulations” used in the International Standards on Auditing (ISAs);
  • Explored the possibility of establishing a presumption, which can be rebutted, that disclosure will be made under certain conditions by professional accountants for clients that are public interest entity audit clients; and
  • Discussed documentation, changes to other sections of the Code of Ethics for Professional Accountants (the Code), and communication between successor and predecessor accounting firms.

The Ethics Board is considering releasing a revised draft of the proposed standard for public comment and will review this draft at its December 2013 meeting

Structure of the Code

The Ethics Board received an update on the Structure of the Code Working Group’s preliminary analysis of research findings regarding ways to improve the usability of the Code. Among other matters, the board discussed enhancing the visibility of the Code’s requirements; clarifying responsibility for compliance with the Code’s requirements; simplifying the language in the Code; repackaging parts of the Code; and an electronic Code. The Ethics Board will receive the Working Group’s preliminary report at its December 2013 meeting.

Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

The Ethics Board is reviewing the long association provisions in Section 290 of the Code to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. Following research conducted by the working group, the Ethics Board discussed preliminary issues, including:

  • Potential structural changes affecting the profession in the context of external regulatory developments relating to audit reform;
  • The involvement of those charged with governance in rotation decisions;
  • Who on the engagement team should be subject to rotation with respect to audits of public interest entities (PIEs);
  • The duration of the “time on”  and “cooling off” periods;
  • Permissible activities during the “cooling off” period;
  • Exceptions to rotation requirements; and
  • The need for rotation requirements for audits of entities that are not PIEs.

The board will continue its deliberation of the issues at its December 2013 meeting.

Emerging Issues and Outreach

The Ethics Board discussed and broadly supported proposals for processes to deal with emerging issues and outreach. At its December 2013 meeting, the board will consider refinements to the proposed processes and draft Terms of Reference for a standing working group to oversee emerging issues and outreach activities going forward.

Review of Part C of the Code

As part of the first phase of this project, the Ethics Board discussed adding a potential new section to Part C of the Code, aimed at professional accountants in business, that would address pressure from superiors and others to engage in unethical or illegal acts and related issues. Among other matters, the board discussed the scope of the guidance, and how it would be applied using a threats and safeguards approach. As part of the same phase of the project, the board will consider issues relating to the preparation and reporting of information at its December 2013 meeting.

Non-Assurance Services

The Ethics Board approved a project proposal to review the non-assurance services (NAS) provisions in the independence sections of the Code (Sections 290 and 291) as these relate to the following three areas: management responsibilities; services of a routine or mechanical nature; and emergency exceptions for bookkeeping and taxation services. The board also discussed producing a paper that would set out its views and positions on NAS and related matters. The Ethics Board will review a first draft of proposed changes to the Code related to the above three areas at its December 2013 meeting.

Future Strategy and Work Plan

The Ethics Board discussed a number of matters arising from the International Auditing and Assurance Standards Board (IAASB)'s Audit Quality project that may have implications for the Ethics Board’s future strategy and work plan. These matters included: the need for additional guidance to expand upon some of the fundamental principles in the Code as these apply to auditors; information sharing by auditors with respect to shareholders and regulators, and between auditors when there is a change of auditors; the need for, and who should be involved in developing, guidance on audit firm governance; and the need for a process to analyze root causes of audit failures.

The Ethics Board also discussed an initial draft of the Consultation Paper, IESBA Strategy and Work Plan 2015-2018, setting out the context for the board’s future strategy, proposed strategic themes, and potential actions and priorities. The board will consider a revised draft of the Consultation Paper for approval at its December 2013 meeting.

Definition of Those Charged with Governance

Last month, the Ethics Board released a revised definition of “those charged with governance” in, and related changes to, the Code. The amendment is intended to more closely align the definition in the Code with that in the International Auditing and Assurance Standards Board (IAASB)’s International Standard on Auditing (ISA) 260, Communication with Those Charged with Governance, thereby eliminating any potential confusion. The Ethics Board does not expect any changes will be necessary to accounting firms’ systems and methodologies or common practice. 

Next Meetings

Meetings of the Ethics Board and the Ethics Board’s Consultative Advisory Group (CAG) are open to the public. The next meeting of the board will be held in New York, USA, on December 4-6, 2013. The next meeting of the CAG will be held via teleconference on October 10, 2013. The next physical meeting of the CAG will be held on March 10, 2014, in New York, USA.

For more information and to register to attend an Ethics Board or Ethics Board CAG meeting as an observer, visit Ethics Board Meetings  and Ethics Board CAG Meetings respectively. 

2013 Handbook of the Code of Ethics Available

The 2013 Handbook of the Code of Ethics for Professional Accountants is now available to download or purchase. The 2013 edition contains the final revised pronouncements addressing a breach of a requirement of the Code and conflicts of interest, and the revised definition of “engagement team.” These changes will be effective in 2014; see the individual pronouncements for details. To download a free electronic copy of the handbook for personal use or purchase print copies, see Handbook of the Code of Ethics for Professional Accountants.   

Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from around the world will convene at this quadrennial IFAC event. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession. Register Now.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.

 

IESBA September 2013 Meeting Highlights

English

Highlights from the IESBA's September 16-18, 2013 meeting in Sydney, Australia.

00:32 Overview

1:04 Part C of the Code (Professional Accountants in Business)

2:52 Suspected Illegal Acts

6:54 Long Association

9:44 Structure of the Code

Meeting Highlights Listen & Subscribe in iTunes
IESBA September 2013 Meeting Highlights

International Donor Initiative Releases Report Assessing Accountancy's Global Landscape

New York, New York English

As part of the continuing effort to strengthen the accountancy profession globally, the Professional Accountancy Organization Global Development Report was released today. The report is an initiative of MOSAIC, the Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration.

The report was created to provide an assessment of professional accountancy organization (PAO) development at the global, regional, and national levels. Through its 10 key findings, the report establishes the success factors and challenges associated with building a strong, sustainable accountancy profession supported by an effective PAO.

“As an integral part of national financial infrastructures, PAOs can provide significant contributions to the financial, economic, and social development of nations,” said Deborah Williams, MOSAIC Steering Committee co-chair and chair of the IFAC PAO Development Committee. “Capacity-building efforts benefit the global economy since properly functioning PAOs support the production of high-quality financial information and contribute to public and private sector development, economic growth, and the aid-effectiveness agenda.”

The report’s key findings include the importance of undertaking PAO development comprehensively at the national level; strengthening legal and regulatory foundations; furthering implementation of international standards; and supporting internal strengthening of PAOs. The findings will provide direction for the MOSAIC Steering Committee in its future endeavors.

“This report will provide vital direction on where to focus efforts to increase PAO capacity and improve the quality of public and private sector accounting and financial management, goals that underpin MOSAIC,” said Jennifer Thompson, MOSAIC Steering Committee co-chair and chief financial management officer at the World Bank. “It allows us to further the principles of aid effectiveness—embodied in the Paris Declaration, Accra Agenda for Action, and the Busan Partnership for Effective Development Cooperation—to contribute to economic growth and a reduction in poverty.”

MOSAIC is a historic Memorandum of Understanding that sets out the basis for improving cooperation and collaboration between IFAC, international donors, and the international development community. With 13 signatories, it provides the foundation for an aligned approach to increase the capacity of PAOs and improve the quality of financial management systems in emerging economies. The PAO Global Development Report was co-financed by the African Development Bank, Asian Development Bank, Inter-American Development Bank, and World Bank.

About MOSAIC
MOSAIC (the Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) sets out the basis for improving cooperation and collaboration between IFAC, international donors, and the international development community. MOSAIC’s objective is to increase the capacity of PAOs in partner countries to improve the quality of public and private sector accountancy and financial management with a view toward enhancing the effectiveness and efficiency of donor assistance, contributing to economic growth, and reducing poverty. IFAC, the global organization for the accountancy profession, serves as the Secretariat for MOSAIC.

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.

 

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2013 Handbooks from IAASB, IESBA, and IPSASB Now Available

New York, New York English

The International Federation of Accountants (IFAC) today announced the availability of the 2013 editions of the handbooks from the International Auditing and Assurance Standards Board (IAASB), International Ethics Standards Board for Accountants (IESBA), and International Public Sector Accounting Standards Board (IPSASB).

2013 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements

The 2013 handbook contains two new standards issued by the IAASB since the 2012 edition: International Standard on Auditing (ISA) 610 (Revised 2013), Using the Work of Internal Auditors and International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Financial Statements.

To download an electronic copy of the handbook for personal use, purchase print copies, or find information on recent developments and outstanding exposure drafts, visit the IAASB’s website at www.iaasb.org.

2013 Handbook of the Code of Ethics for Professional Accountants

In addition to the extant Code of Ethics for Professional Accountants (the Code), the 2013 edition includes three revised pronouncements related to breaches of a requirement of the Code; conflicts of interest; and the definition of “engagement team.” Changes to these pronouncements will take effect in 2014. See individual pronouncements for details.

To download an electronic copy of the handbook for personal use, purchase print copies, or find information on recent developments and outstanding exposure drafts, visit the IESBA’s website at www.ethicsboard.org. 

2013 Handbook of International Public Sector Accounting Pronouncements

The 2013 edition includes Chapters 1-4 of the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities, which were issued in January 2013. The 2013 handbook also includes an updated list of those International Public Sector Accounting Standards (IPSASs) that are applicable to annual financial statements covering periods beginning on or after January 1, 2013, and a list of those IPSASs that are applicable to annual financial statements covering periods beginning on or after January 1, 2014.

To download an electronic copy of the handbook for personal use, purchase print copies, or find information on recent developments and outstanding exposure drafts, visit the IPSASB’s website at www.ipsasb.org.

The standards and pronouncements in each of the handbooks were developed by the IAASB, IESBA, and IPSASB, respectively. The structures and processes that support the operations of these independent standard-setting boards, including publishing the handbooks, are facilitated by IFAC.

The International Accounting Education Standards Board has not issued a 2013 edition of its Handbook of International Education Pronouncements but plans to publish an updated version in 2014.

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.

 

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The Role and Expectations of a CFO: A Global Debate on Preparing Accountants for Finance Leadership

Discussion Paper

This Discussion Paper is designed to stimulate a global debate on preparing accountants for finance leadership roles, including chief financial officer (CFO). The paper features five principles that highlight the changing expectations, scope, and mandate of the CFO and finance leadership roles and recommends what action professional accountancy organizations and employers can take to prepare professional accountants for career progression to finance leadership.

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