A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.

In the immediate post Sarbanes-Oxley period, IFAC and the international regulatory community took initiatives to strengthen the international auditing standard-setting process in line with these principles. Among the most important actions was the establishment of the Public Interest Oversight Board (PIOB) to provide independent public interest oversight of the key elements of the standard-setting structure and process. The PIOB, formed in 2005, oversees the International Auditing and Assurance Standards Board (IAASB), the International Accounting Education Standards Board, the International Ethics Standards Board for Accountants, as well as the IFAC Member Body Compliance Program.

"A system of shared responsibility for standard setting draws on the strengths of the profession and of the regulators. Each group brings different skills, experiences and authority to the standard-setting process," states IFAC Chief Executive Officer Ian Ball.  "The PIOB, for example, provides assurance that the standard-setting process is operating independently and in the public interest."

In addition to the establishment of the PIOB, other significant elements of the standard-setting process include a highly transparent due process, a strong role for Consultative Advisory Groups that provide technical input from the perspective of external stakeholders, including regulators, and a composition of the standard-setting boards that has an appropriate balance of "practitioner" and "non-practitioner" members.

Speaking about the system as a whole, Mr. Ball emphasizes, "The ultimate test of any system is that it works well, in this case meaning it produces high quality standards that operate in the public interest. The level of adoption and endorsement of the standards - also outlined in the paper - suggest that this test is being met."

 "IFAC and the regulators share a common goal: we want effective standard-setting processes," points out new IFAC President Robert Bunting. "To be effective they must operate in the public interest, they must be balanced, not resulting in excessive compliance costs for any group, and they must contribute to building public confidence in financial reporting. These criteria are ageless, but they are worth re-emphasizing in times of global crisis like these."

International Standard Setting in the Public Interest may be downloaded from the IFAC website by going to https://www.ifac.org/Store/. 

IFAC (https://www.ifac.org/) 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. IFAC is comprised of 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) is recognizing World Accountancy Week -- December 7-13, 2008 -- by launching an initiative to reach out to more professional accountants in business. The committee is inviting their participation in selecting the winner of its 2008 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have been published by IFAC's 158 member bodies and associates.  This is the first time that individual accountants worldwide have been invited to be part of the selection process.

"IFAC is dedicated to making its materials more useful and relevant to professional accountants in business," states Ian Ball, IFAC chief executive officer. "The best way to do that is to involve them more directly in our work." 

Ten articles focused on leading-edge issues that PAIBs are addressing today have been selected by the PAIB Committee for global distribution and have been nominated for the top Article of Merit Award. Professional accountants in business are invited to rate their usefulness.  This input will be used to select the winning article.

The ten articles may be viewed by going to https://web.ifac.org/PAIB/articles-of-merit-2008. They focus on the following topics, among others:

• Outsourcing the finance and accounting function;
• Measuring board performance;
• Analyzing mergers and acquisitions;
• Managing strategic risk;
• Planning multi-year strategies; and
• Achieving employee alignment and motivation.

Individuals are requested to review and rate these articles by January 11, 2009. The winning article will be announced in early 2009.

About IFAC
IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is currently comprised of 158 professional accountancy bodies in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

To mark the beginning of World Accountancy Week, the International Federation of Accountants (IFAC) has released the results of its 2008 Global Leadership Survey. This year's survey sought the views of leaders of accountancy institutes worldwide on the current credit crisis and other top issues for the profession. Chief executives and presidents of 110 accountancy organizations* worldwide responded to the survey. The majority of these organizations have been actively engaged, like IFAC, in identifying and executing appropriate responses to the crisis, supporting their members in understanding applicable international standards, and working with regulators, business groups and others to find solutions. Many of these initiatives are featured on IFAC's website in its new page on the global financial crisis (https://www.ifac.org/financial-crisis/).

"According to survey respondents, the credit crisis is resulting in increased awareness of the value of professional accountants and the services they provide," says IFAC Chief Executive Ian Ball. "It is now up to the profession to continue to meet the expectations of those that depend on our work and to contribute to rebuilding confidence in financial markets."

Leaders of accountancy organizations reported an increased trend in the need for services that are related in some way to the crisis. For example, in the coming year they expect their members in public practice to be more involved in corporate recovery and insolvency services, assurance services (other than audit), as well as risk and compliance related work. Members employed in business and industry are also expected to be more involved in risk management, as well as in the areas of corporate social responsibility and sustainability, internal control, and governance and compliance work.

Respondents believe that the most important issues for the accountancy profession in the coming year are:

• Addressing the needs of small and medium enterprises (SMEs) and small and medium practices (SMPs);
• Meeting expectations to identify and prevent fraud;
• Dealing with the changing regulatory landscape; and
• Transitioning to International Standards on Auditing.

They also believe it is increasingly important to address the transition to International Financial Reporting Standards, auditor liability issues, the use of new technologies like XBRL, and corporate social responsibility issues.

Recently-appointed IFAC President Robert Bunting has indicated that addressing the needs of SMPs and SMEs will be a priority for IFAC over the next two years.

"The survey confirms that meeting the needs of SMPs and SMEs is a global concern and a global goal. These entities are among those likely to suffer significantly from the current financial crisis yet they are among the least at fault. We must look for ways to mitigate the effect of the crisis on SMPs and SMEs," emphasizes Mr. Bunting.

Other survey results point to an increase in the attractiveness of the profession to students. According to survey respondents, the factors positively influencing students are the career options available and earning potential. However, leaders of accountancy institutes indicated that the two factors having the most negative impact on the attractiveness of the profession are work/life balance and legal liability. Most respondents indicated that they have initiatives in place to address these issues.

During World Accountancy Week, December 7, 2008 to December 13, 2008, accountancy institutes will be communicating the benefits of pursuing a career in accountancy and the role of professional accountants in contributing to economic growth and development.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is currently comprised of 158 professional accountancy bodies in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors - List of IFAC 2008 Global Leadership Survey Participants

Accountancy Institutes

Regional Accounting Organizations and Groupings

Eastern Central and Southern African Federation of Accountants
Interamerican Accounting Association
Confederation of Asian and Pacific Accountants
Eurasian Council of Certified Accountants and Auditors
The Institute of Chartered Accountants of the Caribbean
The Association of Accountancy Bodies in West Africa

This information paper contains the results of a survey conducted by the Professional Accountants in Business Committee (PAIB) in the spring of 2008, designed to identify similarities and differences in performance measurement structures in public sector entities and to assess the extent to which these structures help meet their objectives.

Leaders of over 100 accountancy organizations worldwide met in Rome on November 11-14 to participate in the International Federation of Accountants' (IFAC) Board and Council meetings, where they addressed the global financial crisis, convergence to global auditing and ethics standards, and the profession's role in sustainable development. At the conclusion of the meeting, President Robert Bunting of the United States assumed the IFAC Presidency for a two-year term ending in November 2010. Göran Tidström of Sweden assumed the position of Deputy President. In addition, the Council approved the appointment of three new members to the IFAC Board and the reappointment of four members to a second term.*

Newly elected IFAC President Robert Bunting, a past Chairman of the American Institute of Certified Public Accountants and an IFAC Board member since 2005, commented on the global financial crisis, pointing out "The financial crisis has clearly demonstrated how interconnected global markets are. This makes IFAC's initiatives to achieve convergence of international standards ever more urgent. Convergence to a common set of high quality accounting and auditing standards is essential to assuring the quality of the profession's services and is vital to the effective operations of markets and to promoting cross-border trade and investment."

"I believe that IFAC has a key role to play in restoring confidence in the markets," emphasizes Mr. Bunting. "We must demonstrate that our standard-setting processes are rigorous. And we must continue to promote strong corporate governance and the highest quality practices by the world's accountants, whether they work in public practice or in business and industry. Additionally, we need to scrutinize ourselves and look at what we can do better or differently. And lastly, we must be even more engaged with all market participants and actively collaborate with them in identifying and implementing the solutions that can prevent future crises."

Supporting these goals, the IFAC Council approved an updated Strategic Plan for 2009-2012. This plan has an increased focus on the implementation of international standards, on enhancing the relevance and sustainability of the profession, and on communicating more vigorously on regulatory, financial management, financial reporting, corporate governance, and other issues.

"Another area of focus in the strategy and one to which I plan to give my attention is meeting the needs of small and medium practices (SMPs) and enterprises (SMEs)," adds Mr. Bunting. "The SMP/SME community did not cause the current financial crisis, but they will be very much affected by it. We must do what we can, including ensuring that they are not subject to overly burdensome regulatory requirements, to contribute to their health and effectiveness."

The IFAC Strategic Plan for 2009-2012 is available on the IFAC website.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is currently comprised of approximately 158 professional accountancy bodies in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors - IFAC Board Members (November 2008 - November 2009)

Robert L. Bunting, President, United States

Göran Tidström, Deputy President, Sweden

Warren Allen, New Zealand**

Abdeljelil Bouraoui, Tunisia

Yugui Chen, China

Roberto D'Imperio, Italy

Kevin Dancey, Canada

Ingrid Doerga, Netherlands

Robert Hodgkinson, United Kingdom

Gen Ikegami, Japan**

Ved Kumar Jain, India*

Japheth Katto, Uganda

Olivia Kirtley, United States

David Leonard, United Kingdom

Bernadette McGrory-Farrell, Ireland**

Joycelyn Morton, Australia**

William Nahum, France

Norbert Pfitzer, Germany

Roberto Resa, Mexico

Syed Asad Ali Shah, Pakistan*

Luiz Carlos Vaini, Brazil

Steve Vieweg, Canada*

* New IFAC Board members as of November 2008
** IFAC Board members reappointed for a second term in November 2008

Congratulations to Fermín del Valle on his successful and productive term as IFAC President.

He had an eventful term of office and, under his leadership, IFAC accomplished many of its goals. In fact, he has been so energetic and committed to fulfilling the goals of IFAC that at times I wondered if he would leave anything for me to do. However, as inevitably happens, some of his initiatives will pass to me for further pursuit or implementation.

I'm pleased to carry on and complete his good work, including advancing the process for delivering quality translations of IFAC standards, further examining how to enhance business reporting needs, and supporting initiatives addressing the needs of professional accountants in business and small and medium enterprises, to name only a few.

I would also like to express my congratulations to Göran Tidström on his election as Deputy President.  We have already developed a strong working relationship and I look forward to a close association over the next two years.

As part of its mission to serve all professional accountants in business, including those working in the public sector, IFAC's Professional Accountants in Business (PAIB) Committee has conducted a survey to obtain information about the development of financial and non-financial performance measurement and reporting structures in various public sector entities around the world.

The results of this survey, contained in the information paper Developments in Performance Measurement Structures in Public Sector Entities, will help professional accountants in business, and others who work in the public sector, in evaluating and further improving their own financial and non-financial performance measurement structures. This will enable them to better plan, execute and control their organization's service delivery and to achieve a higher level of accountability. The results will also help IFAC's PAIB Committee to consider specific public sector aspects when developing International Good Practice Guidance for professional accountants in business.

The survey received 250 responses from public sector organizations at all levels of government and in a variety of sectors, including local councils, public utilities and various ministries from countries all over the world. The survey results clearly demonstrate that respondents are much more satisfied with the performance measurement structures in the public sector entities for which they completed this survey, if these structures possess the following, more advanced elements:

• A balanced combination of relevant financial and non-financial objectives, supported by specific measurement indicators (financial and non-financial KPIs);
• Accrual accounting for the budgeting, the (legislative) appropriation and the financial reporting processes;
• Capability for capturing, processing and reporting useful information on both financial and non-financial developments;
• Independent external review of the figures to report on financial and non-financial performance;
• A formal structure for measuring and assessing risk, and developing strategies to control it; and
• A regular review to ensure that the performance measurement structure remains effective and efficient.

IFAC (www.ifac.org) 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. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Federation of Accountants (IFAC) supports recent moves by the International Accounting Standards Board (IASB) to contribute to greater consistency in financial reporting and to work towards convergence of international standards, an objective which IFAC views as critical to the efficient operation of global capital markets.

While accepting the value of moving rapidly to remove differences in the application of fair value accounting in different jurisdictions, IFAC strongly opposes attempts to change more radically, or to suspend, the use of fair value accounting without adequate due process. In particular, IFAC considers that making changes at a national or regional level that exacerbate reporting differences would serve to further confuse financial markets and would result in a reduction of confidence in financial reporting - exactly the opposite of what is required in current circumstances. "Reducing transparency is not the answer," says IFAC President Fermín del Valle, "and it will not serve the interests of investors."

IFAC believes that the additional guidance given to those applying both accounting and auditing standards relating to fair values has been very valuable and will contribute to the public interest through more consistent application of the standards. This guidance has come from the IASB and the United States Financial Accounting Standards Board, as well as from the International Auditing and Assurance Standards Board in its Staff Audit Practice Alert, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment.

IFAC and its independent standard-setting boards are continuing to monitor the impact of the credit crisis and will consider whether further guidance is needed.

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. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business. For more information about IFAC, visit its website at www.ifac.org.

The International Federation of Accountants (IFAC) today issued a policy position titled IFAC's Support for a Single Set of Auditing Standards: Implications for Audits of Small and Medium-sized Entities. The paper sets out IFAC's view that International Standards on Auditing (ISAs) are designed to be applicable to audits of financial statements of entities of all sizes, and highlights the ways in which the International Auditing and Assurance Standards Board (IAASB) considers the needs and perspectives of small- and medium-sized entities (SMEs) in the development of those standards.

The paper emphasizes that the consistent use of the ISAs is essential to meeting the public interest expectations of an audit. If auditors intend to issue an ISA audit report, they must comply with the ISAs. This enables a consistent level of assurance to be associated with the word "audit," and allows users to make decisions in the light of a common understanding about the reliability of financial statements. The paper also emphasizes the importance of professional judgment in determining the most effective approach for a particular audit.

The paper points out that SMEs have an alternative to obtaining an audit; they may obtain a review of their financial statements. International Standard on Review Engagements 2400, Engagements to Review Financial Statements, requires a different level of work effort by the practitioner and results in a different and lower level of assurance. The IAASB will be considering changes to this standard in light of the current needs of the marketplace. A new consultation paper, commissioned by the IAASB and developed by staff of several national auditing standard setters, seeks input on the elements that would provide a relevant and cost-effective assurance service that is an alternative to an audit for SMEs in particular. IFAC encourages the broader accountancy community to assist the work of the IAASB by responding to this consultation paper.*

All IFAC policy positions may be downloaded from the IFAC website by going to https://www.ifac.org/Store/.

About IFAC
IFAC (https://www.ifac.org/) 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. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.

*The Consultation Paper, Matters to Consider in a Revision of International Standard on Review Engagements 2400, Engagements to Review Financial Statements, can be accessed at https://www.ifac.org/ED.

Good morning, ladies and gentlemen. It is a pleasure to be here with you for this international conference.

I would like to thank USAID and the hosting organizations for inviting me to be here with you in this country of beautiful lakes and hills that has attracted travelers for thousands of years.

The International Federation of Accountants (IFAC), of which I am currently the President, is the global organization for the accountancy profession. IFAC's mission is to develop the accountancy profession globally so that it can effectively serve the public interest and contribute to the development of strong economies. 

IFAC sees the accountancy profession and all professional accountants as effective agents for development in our societies.  This places the accountancy profession in its true role, and makes the relevance and sustainability of our profession a matter of public interest.

In order to fulfil our mission, we work with our 157 members and associates in more than 120 countries, including the Union of Accountants and Auditors of Kyrgyz Republic, the Chamber of Auditors of the Republic of Kazakhstan and the National Association of Professional Accountants and Auditors of Uzbekistan. We also work with regional organizations and accountancy groupings, such as the Eurasian Council of Certified Accountants and Auditors. Of course, we would also like to work with other professional organizations in Central Asia that want to join our global family and are ready to make the commitment to comply with IFAC's Statements of Membership Obligations.

To achieve our mission, we also work with regulatory bodies, government officials, and representatives of the international donor community.

The presence here today of individuals from each of these backgrounds demonstrates the importance of the focus of this conference: the role of the accountancy profession in economic growth and development worldwide.

Professional accountants play a vital role in every sector of each economy around the world. Professional accountants who work as auditors provide assurance as to the reliability of financial information, which is essential for the proper functioning of capital and credit markets. Professional accountants working in business also contribute to the quality of financial information and promote strong corporate governance and ethics within their organizations. Professional accountants working in government help to ensure that public resources are managed effectively and efficiently.

In each of these areas – serving the markets, their organizations, or the public sector – professional accountants contribute to the development of strong and stable economies. This stability is essential to promoting the long-term growth of nations, to increasing internal and external investment and, ultimately, to generating wealth, improving the lives of citizens, and reducing poverty. 

This morning, I would like to share with you my views on how the accountancy profession, working in collaboration with its various stakeholders, can make a meaningful contribution to economic growth and development.

My remarks today will focus on four main areas:

• Adoption and implementation of international standards to support high quality practice;
• The role of education in building a strong accountancy profession;
• The development of guidance and translations to support implementation of international standards; and
• The importance of collaboration – both nationally and internationally – in strengthening the profession and serving the public interest.

Let me begin with convergence.

Within IFAC, there are four independent standard-setting boards that develop international standards in the areas of auditing and assurance, education, ethics, and governmental financial reporting. These standards raise the level of practice and promote reliable and high quality financial reporting worldwide. IFAC’s commitment to convergence also includes promoting the use of the International Financial Reporting Standards (IFRSs), which are developed by the International Accounting Standards Board (IASB).

The adoption and implementation of a common set of high quality international standards by nations around the world is crucial to assuring the quality and uniformity of the profession’s services. It is also vital to operating effectively in a global world.

When an investor in Boston is looking to invest in Bishkek, he needs to understand and have confidence in that company’s financial information. If the financial information is based on a common set of standards that are used internationally, the investor will tend to be more confident about investing.

This helps to increase international investment and to reduce the cost of raising capital and obtaining credit. Therefore, by reducing or eliminating the differences in financial reporting requirements, we can help to eliminate barriers to international investment and trade.

Regarding IFRSs, it is important to keep in mind that towards the end of this year, or the beginning of 2009, the IASB will be issuing the IFRS for SMEs. This simplified set of standards is being designed to be used by entities that, without being entities of public interest, need to present general purposes financial statements. It is important to remember this fact when making a decision regarding the adoption of IFRS.

With respect to International Standards on Auditing (ISAs), which are developed by the International Auditing and Assurance Standards Board (IAASB), we are seeing the fruits of convergence all over the world.

Countries moving toward adoption of ISAs range from China and India to Canada and the United States, where the Auditing Standards Board, which sets auditing standards for private companies, has set convergence with ISAs as an objective.

I understand that the Kyrgyz Republic adopted ISAs several years ago. This was an important step for your country, but it is not the end of the process. Adoption and implementation of international standards is a journey which requires that we continue to move forward, updating and refining the standards as needed to reflect changes in financial reporting and business practices. 

Much has changed in your country in recent years and much progress has been made. Significant changes have taken place in the realm of financial reporting and auditing standards, and ISAs in particular have continued to be revised and updated to address the new challenges faced by auditors, both here in the Kyrgyz Republic and globally.

One important area in which the ISAs have significantly changed in just the past two years is in their structure and language. The IAASB is in the final stages of a project to redraft all of the ISAs to improve the clarity of the language and to help facilitate their translation and implementation. It is on target to complete the redrafting of all 35 ISAs as final standards by the end of this year, and the standards will have a common effective date for financial periods beginning on or after December 15, 2009.

The IAASB’s Clarity project represents a major change in the standards since they were last adopted here in the Kyrgyz Republic. Your nation has demonstrated its strong commitment to international involvement by becoming the first in Central Asia to join the World Trade Organization in 1998, and I urge you to continue your active international engagement and continue your convergence activities by adopting and implementing the redrafted ISAs on the recommended effective date. I encourage the same of all countries in Central Asia.

Unlike IFRSs, ISAs can be applied in every case, no matter how big or small the entity is. This means it is not necessary to develop a simplified set of auditing standards for the audits of the SMEs. However, we can, and we should, consider the needs of SMEs in the development of International Standards on Auditing and support SMEs in the application of these standards.

To support small and medium accounting practices (SMPs) and others in applying ISAs to the audit of SMEs, last December IFAC released new implementation guidance entitled Guide to Using ISAs in the Audit of Small- and Medium-sized Entities. The guide, developed by the Canadian Institute of Chartered Accountants on IFAC’s behalf, is an example of collaboration at its best.

This new guide, which is available free from our website, provides an analysis of all ISAs issued as of December 31, 2006 and their requirements in the context of an SME audit.  In just the first six months since the guide was issued, more than 11,000 copies were downloaded from our website, showing the clear interest in and need for such guidance.

IFAC is already planning an update to the guide once the IAASB’s Clarity project has been completed to include the newly redrafted ISAs.

Although adoption of international standards is essential both for improving the quality of the profession’s services and to promoting external investment, adoption alone is not enough. The standards must also be effectively implemented and consistently applied by all practitioners.

We at IFAC recognize that implementing a new set of standards presents challenges, which can only be effectively addressed through education, training, and continuing professional development.

Through their participation in the CAP/CIPA certification program, countries in Central Asia have shown that they take education and training seriously. The CAP/CIPA program is an important symbol of collaboration among Russian-speaking nations, and it provides a good foundation for education and certification of professional accountants throughout this region.

Within IFAC, the International Accounting Education Standards Board (IAESB) develops standards and guidance for education and training of all professional accountants. This Board has issued eight International Education Standards (IESs) and a number of guidance papers that are focused on enhancing the professional knowledge, values, skills, and ethics of all professional accountants and accounting students.

One standard in particular, IES 8, Competence Requirements for Audit Professionals, prescribes the competence requirements for audit professionals involved in transnational audits.

This standard, which became effective on July 1 of this year, requires that audit professionals have an advanced level of knowledge about audit and financial reporting, have relevant knowledge regarding information technology, and possess the skills, values, ethics and attitudes expected from audit professionals. Additionally, the standard mandates that professional accountants taking on the role of an audit professional undertake a period of practical experience in audit and undergo an assessment of capabilities and competence before they assume such a role.

All of these requirements are essential to adequately prepare auditors to fulfil their public interest responsibilities to the financial markets and to the investing public, not to mention to the companies they audit.

Achieving full convergence to and implementation of international standards requires developing high quality translations of international standards into the many languages of the world.

IFAC believes that promoting high quality practice and supporting convergence requires that professional accountants have translations of the standards in their languages.  To increase the accessibility of our standards to accountants and others worldwide, in March IFAC issued a consultation paper that set out our proposed strategy to move to one quality translation of IFAC standards per language. This new process is designed to facilitate the ability of member bodies and other qualified organizations to translate IFAC standards and to ensure the timeliness and quality of such translations. IFAC welcomes the active participation of all our members, associates and other interested parties in the process of developing translations of our standards. We recognize, however, that there is a need to coordinate translations activities.  IFAC’s proposed translations policy is designed to eliminate duplicate efforts and ensure that a single, high quality translation of our standards in each language has the authority of international consensus. After considering the comments received, we are planning to approve the final policy on translations at the next IFAC Board Meeting, in September.

An example of success in developing translations collaboratively is the IFAC developing nations toolkit. Entitled Establishing and Developing a Professional Accountancy Body, this good practice guidance is designed to support the establishment and further development of strong national professional accountancy bodies. It addresses the roles and responsibilities of a professional accountancy body, education for accountants, and capacity development.  In collaboration with our member bodies, this guidance has been translated into Spanish, French and Russian, and an Arabic translation is currently being developed. You may find this toolkit to be of particular benefit as you work toward continuing adoption and implementation of international standards, as it provides case studies from IFAC member bodies on their experiences in implementing IFRSs.

The purpose of the guide is to promote the formation and ongoing development of strong professional accountancy bodies, which serve as the foundation of the accountancy profession nationally, regionally and globally.

Strong national accountancy bodies play many important roles, including representing the needs of the profession in their country and acting in the public interest. Professional bodies support the delivery of high quality services by their members by assisting in the implementation of international standards and, in this way, contributing to the achievement of global convergence. They also provide input, from a national perspective, to the development of international standards, helping to ensure that national concerns are addressed in the standard-setting process. In addition, professional bodies can participate in the regulation of the profession by having mechanisms in place to monitor their members’ compliance with ethical and practice standards and by providing input to reform processes to strengthen the profession and broader financial systems.

You may have noticed that in each of the areas I mentioned collaboration is key to making progress.

In developing and emerging nations, where the needs are sometimes great and the resources scarce, collaboration is vital to developing both the accountancy profession and the nation as a whole. As leaders of the accountancy profession, regulatory bodies, and government, those of you here today have an important role in promoting collaboration here in the Kyrgyz Republic, throughout Central Asia, and globally.

I firmly believe that it is only through collaboration and cooperation that we can continue to build a strong and dynamic accountancy profession that protects the public interest, delivers value to its customers and stakeholders, and contributes to the development of the economy.

The accountancy profession must continue to collaborate in moving forward to build a better future for itself. This requires that we both identify and design more efficient ways to deliver our services and that we generate new services that better respond to the changing demands of the market, for example, by taking a lead role in areas such as corporate social responsibility, which includes environmental sustainability as well as social economic performance.  

I firmly believe that sustainability will be increasingly important to long-term business performance in the future and that professional accountants will play an even greater role in sustainability and corporate social responsibility, particularly, in preparing and in auditing reports.

As a united global profession, we must continue to be players, not spectators, in the development of our countries. We can and must continue to take the initiative in collaborating to build an even better future.

Thank you very much for your attention.