Alta Prinsloo and James Gunn have been named Deputy Directors of the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). In announcing the appointments, IFAC Chief Executive Ian Ball said the promotion of Ms. Prinsloo and Mr. Gunn, both of whom currently serve as senior technical managers to the IAASB, recognizes the high level of expertise, broad-based experience, and depth of knowledge that they bring to the newly created positions. Both individuals assumed their new positions on May 1, 2006 and continue to report to James Sylph, IFAC Technical Director.

Ms. Prinsloo joined the IAASB staff team in September 2002 from the South African Institute of Chartered Accountants. As IAASB Deputy Director, she will provide technical direction on the development of the Board's standards. In addition, she will oversee the publication of IAASB pronouncements in electronic and print formats and ensure that IAASB initiatives and related information are appropriately communicated through the Board's website (www.iaasb.org) and other outlets. She will also provide administrative support to the IAASB Consultative Advisory Group and act as point of contact between the IAASB and the International Organization of Supreme Audit Institutions.

Mr. Gunn was seconded from his firm, KPMG, to assist the IAASB between November 2000 and May 2001. He joined the IAASB on a permanent basis in September 2002. As Deputy Director, he will oversee and coordinate all IAASB standard-setting projects, including the Clarity project, which is designed to enhance the readability and understandability of IAASB pronouncements. He will also monitor auditing standard activities of key national standard setters and administer the annual meeting that the IAASB hosts with those bodies.

About the IAASB

The objective of the IAASB, an independent standard-setting Board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board* oversees the activities of the IAASB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

* Note to Editors The Public Interest Oversight Board was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

The International Federation of Accountants' (IFAC's) 2006 Handbook of International Auditing, Assurance, and Ethics Pronouncementsis now available in print and in several electronic formats. It includes all pronouncements issued by the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants through December 31, 2005. The handbook includes the following IAASB pronouncements:

• International Standards on Auditing (ISAs);
• International Standards on Review Engagements (ISRE);
• International Standards on Assurance Engagements; and
• International Standards on Related Services.

The 2006 handbook features the following new standards issued by the IAASB in 2005:

• ISA 230 (Revised), Audit Documentation; and
• ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity.

In addition, the handbook contains the revised Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants in June 2005. The updated Code establishes a conceptual framework for all professional accountants to ensure compliance with the five fundamental principles of professional ethics. These are integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. The Code, which becomes effective June 30, 2006, applies to all professional accountants, including those in business and industry, public practice, the public sector, and academia. Two electronic versions of the 2006 handbook are available: a free PDF downloadable version and an online eComPress version. The eComPress version has features designed to make accessing the pronouncements more user-friendly.

• It is fully searchable, so users can readily find the specific guidance they need.
• Its easy-to-use navigation enables users to minimize the time necessary to find relevant information.
• The handbook can be annotated by the user with a unique "Notes" feature, with all the annotations being transcribed automatically to newer editions.
• The publication is compressed and stays compressed, saving disk space and download time.

Used offline, the eComPress version of the handbook is not reliant on the Web and requires no additional software as it comes complete with its own viewer and index. The eComPress version of the handbook can be securely purchased and is immediately downloadable from the IFAC website. Prices for the 2006 Handbook of International Auditing, Assurance, and Ethics Pronouncements are as follows: print - US $100 and eComPress download - US$50. A package discount of US$130 is available when you purchase both the print and eComPress download versions. Downloadable networked versions are also available. Shipping charges apply for printed materials. Visit the IFAC online bookstore at https://www.ifac.org/Store for more information or to place an order. You can also contact IFAC at +1 (212) 471-8722.

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's current membership consists of over 160 professional accountancy bodies in 120 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 on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high-quality performance by professional accountants in business.

Proposals designed to enhance the quality of audits of group financial statements are released today by the International Auditing and Assurance Standards Board (IAASB). The IAASB recently approved, and is now issuing, a re-exposure draft (ED) of the proposed International Standard on Auditing (ISA) 600 (Revised and Redrafted), The Audit of Group Financial Statements. The ED is drafted in the new style designed to enhance the clarity of IAASB pronouncements. Following earlier consultations, the IAASB has modified the proposals and reissued the ED. The primary issues revolve around the extent to which the group auditor needs to be involved in the audits of components that are audited by other auditors, whether these auditors are independent of the group auditor (unrelated) or belong to the group auditor's national or international firm or network of firms (related auditors). The IAASB is, therefore, seeking reaction on the following two specific matters:

• Previous proposals distinguished between the work that the group auditor needed to do, depending upon whether other auditors were related or not. While this may be a relevant factor, the strength of relationships varies, and the IAASB considers that the distinction is not of itself a sufficient basis for determining the group auditor's work. The IAASB has, therefore, proposed eliminating the distinction in the proposed ISA; this has given rise to substantial changes to some of the proposed requirements. Respondents are asked to indicate whether they are in agreement with the proposal and the effect that it has on the procedures that the group auditor performs in relation to the work of other auditors.
• The proposed ISA is drafted on the basis that a group auditor takes sole responsibility for the audit opinion on the group financial statements. This requires that the group auditor obtain sufficient appropriate audit evidence on which to base such an opinion. Because current group audit practices vary, the IAASB considered it necessary to be reasonably specific about the steps to be taken, and the work effort required, by the group auditor to acquire such evidence when other auditors are involved. Respondents are asked whether this approach is justified.

In addition, respondents are invited to comment on the application of the clarity drafting conventions. John Kellas, Chairman of the IAASB, explains: "Our proposals respond to public expectations for continuous improvement in auditing standards. In particular, a number of regulatory bodies and studies supported the need for this project. The IAASB has shown itself to be prepared to tackle such major audit areas. The project has not been an easy one, but we are confident that the proposed standard will enhance current practice and promote consistency worldwide." In developing the requirements and guidance, the IAASB considered regulatory and standard-setting developments around the world, the interests of small entities, and the expectations of various stakeholders.

How to Comment

Comments on the ED are requested by July 31, 2006. The ED may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to EDComments@ifac.org. They can also be faxed to the attention of the IAASB Technical Director at +1-212-286-9570 or mailed to the IAASB Technical Director at 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on the International Federation of Accountants' (IFAC's) website.

About IAASB

The objective of the IAASB, an independent standard-setting board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board* oversees the activities of the IAASB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

* Note to Editors The Public Interest Oversight Board was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

The Consultative Advisory Group (CAG) of the International Auditing and Assurance Standards Board (IAASB) has announced that its meetings are now open to the public. Its next meeting is scheduled for May 11-12 in Paris.

The IAASB CAG is comprised of organizations that are interested in the development of high quality international standards on quality control, audits, reviews and other assurance engagements designed to serve the public interest. Members include international organizations that represent users and preparers of financial statements and regulators. They provide input to and assist the IAASB by advising on its work program, including project priorities, and offering technical advice on projects as items evolve and on other matters of relevance to the IAASB's activities.

Over the past year, the Chairman of the CAG has brought the representation of organizations in the membership of the CAG to 25 - adding new members so that it could harness the views of a wider constituency of stakeholders, both geographically and by professional background, in the auditing process. An important feature is the accountability of the IAASB to the CAG: IAASB project task forces are required to consider significant points made in the CAG discussions and respond in writing to the CAG, explaining how the matters raised have been dealt with.

In developing this process, the meetings of the CAG are attended by the leadership of the IAASB and of the relevant task forces. "Since becoming Chairman, I have planned for the opening of the CAG meetings to the public," says David Damant, Chairman of the CAG. "I have already noted the high-level transparency with which the IAASB operates and this step seems essential to me if organizations, which rely on the auditors and the standards they use, want to have confidence in the full standard-setting process."

Opening the CAG meetings to the public will provide organizations other than the CAG member organizations, and the general public, an opportunity to observe the discussions and follow the various points of view put forward. This may assist them in preparing responses to documents issued by the IAASB for public consultation. Attendance at the CAG meeting can also help individuals or organizations to better understand how the public interest is represented in the development of international auditing and assurance standards.

John Kellas, Chairman of the IAASB, emphasizes: "The CAG is an integral and important part of the IAASB's formal process of consultation. This step further enhances the transparency of that process."

In addition to the May 2006 meeting, the CAG will meet September 11-12 in Toronto. The meeting venues and a registration form to be completed by public observers are available on the IAASB website. The agenda and material for each meeting will be posted to this website two weeks in advance of the meeting.

Notes: IAASB Consultative Advisory Group

The IAASB CAG is independent of the International Federation of Accountants (IFAC). A list of the CAG member organizations as at December 31, 2005 is attached to this press release. The objective and the scope of activities of the CAG, with the rules for membership, and operating procedures are set out in its terms of reference, which are available on the IAASB website.

International Auditing and Assurance Standards Board

The objective of the IAASB, an independent standard-setting board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.

Public Interest Oversight Board

The international Public Interest Oversight Board (PIOB) for accountancy, established in 2005, 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. The opening of the CAG meetings to the public is in line with these criteria. 

IAASB Consultative Advisory Group Members (As at December 31, 2005)

• Asian Financial Executives' Institutes
• Basel Committee on Banking Supervision
• CFA Institute
• Eastern, Central and Southern African Federation of Accountants
• European Commission
• European Federation of Accountants and Auditors for SMEs
• European Financial Executives' Institutes
• Fédération des Experts Comptables Européens
• Foundation Institute Capixaba of Research in Accounting, Economy, and Finance
• Information Systems Audit and Control Association
• Institute of Internal Auditors
• Institute of International Finance
• International Accounting Standards Board
• International Actuarial Association
• International Bar Association
• International Corporate Governance Network
• International Organization of Securities Commissions
• International Organization of Supreme Audit Institutions
• Islamic Financial Services Board
• Japan Securities Dealers Association
• National Organization for Financial Accounting and Reporting Standards in Russia
• North American Financial Executives' Institutes
• United Nations Conference on Trade & Development
• World Bank
• World Federation of Exchanges

I am pleased to have been invited to today's roundtable and to have an opportunity to present the perspective of the Public Interest Oversight Board on regulatory and practical challenges in achieving quality implementation of financial reporting and auditing standards.

It is a great pleasure to be able to represent the International Auditing and Assurance Standards Board (IAASB) in Beijing today. I should like to express my appreciation of the confidence shown in the International Standards on Auditing (ISAs) by the decision of China to accelerate convergence with the ISAs; and my admiration for the way in which the CICPA has made progress in response to that decision. A similar decision has been taken by the European Union, which will shortly be going through the process of endorsing the ISAs. And there are many other countries who have similar policies.

At IAASB, we need to ensure that we write ISAs that can be adopted in jurisdictions with such different legal systems, histories and cultures. We do this, in part, by having a sound and transparent process for the development of the ISAs.

We are pleased and greatly honored to be here today as the Ministry of Finance of the People's Republic of China and the Chinese Institute of Certified Public Accountants announce their intention to converge Chinese auditing standards with International Standards on Auditing. Your enormous achievements to date in strengthening the Chinese accountancy profession through convergence towards international standards should not be viewed as an isolated event. It is significant and fundamental to the further development of your country's capital markets and is, I believe, fully consistent with the reforms the People's Republic of China has advanced in the last decade.

The reforms, including opening your door to increased trade, authorizing the private ownership of business entities, and encouraging foreign direct investment by the establishment of free enterprise zones in coastal regions, have enhanced your country's role and reputation in the global markets. Adhering to high-quality auditing standards is another way to strengthen your financial architecture and confidence in your capital markets.

It is a pleasure to be with you today to participate in the announcement of such a significant achievement here in the People's Republic of China: one that has great ramifications globally. To share the speaking platform today with so many distinguished leaders within the People's Republic of China's Ministry of Finance, the Accounting Standards Board, the Chinese Institute of Certified Public Accountants and the CICPA's Auditing Standards Board, is truly an honor.

The decision by China to converge towards international auditing standards sends a clear message to the world that both the Chinese people and the Chinese accountancy profession are committed to transparency, quality, and high professional standards. Support of these standards will benefit not only the accountancy profession, but also, and even more importantly, all Chinese citizens and the Chinese economy as a whole.

The involvement of related parties, such as directors, owners, and management, in major corporate scandals encouraged the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) to review its current auditing standard on the subject. The IAASB has just issued an exposure draft (ED), proposed International Standard on Auditing (ISA) 550 (Revised), Related Parties, as a result of its review, and is inviting comments on proposed requirements for auditors regarding the audit of related party relationships and transactions.

The current standard requires the auditor to perform certain specified procedures. The proposed standard would extend current practice by requiring the auditor to obtain an understanding of the nature and business rationale of an entity's related party relationships and transactions sufficient to identify, assess and respond to the risks of material misstatement resulting from them. It also places greater emphasis on the difficult task for the auditor of attempting to identify related party relationships and transactions not identified or disclosed by management. The proposed standard places new emphasis on evaluating the effects of related party relationships and transactions on the financial statements, even in circumstances where the financial reporting framework does not establish related party accounting or disclosure requirements.

John Kellas, Chairman of the IAASB, explains: "The proposed standard gives greater recognition to the particular risks associated with related parties and calls on the auditor to do more work to identify related parties and the rationale for the transactions between them and the audit client."

How to Comment

Comments on the exposure draft are requested by April 30, 2006. The exposure draft may be viewed online. Comments may be submitted by email. They can also be faxed to the attention of the IAASB Technical Director at +1-212-286-9570 or mailed to the IAASB Technical Director at 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IAASB and IFAC

The objective of the IAASB, an independent standard-setting board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The international Public Interest Oversight Board* oversees the activities of the IAASB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

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. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC sets ethics, education, and public sector accounting standards and develops guidance to encourage high-quality performance by professional accountants in business.

* Note to Editors The international Public Interest Oversight Board was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.