This ISA deals with the auditor's responsibilities relating to fraud in an audit of financial statements. Specifically, it expands on how ISA 315 and ISA 330 are to be applied in relation to risks of material misstatement due to fraud.

This document, from October 2008, provides a progress update on the Clarity project to help those with responsibilities relating to audits of financial statements set in motion plans to ensure that audits are effectively carried out under the clarified ISAs when the standards come into effect.

All clarified ISAs will be effective for audits of financial statements for periods beginning on or after December 15, 2009.

In This Issue:

1. IPSASB Achieves Goal of Substantial Convergence with IFRSs
2. Outcomes of December IPSASB Rome Meeting
3. Exposure Draft Approved for Service Concession Arrangements
4. IFAC Launches Improved Publications Website
5. Share IPSASB eNews with Your Colleagues

1. IPSASB Achieves Goal of Substantial Convergence with IFRSs

The IPSASB has accomplished its strategic goal of achieving substantial convergence by December 31, 2009 with the International Financial Reporting Standards (IFRSs), dated December 31, 2008. During its December 8-11 meeting in Rome a series of new or improved standards were approved.

Three of these new International Public Sector Accounting Standards (IPSASs) deal with financial instruments:

• IPSAS 28, Financial Instruments: Presentation
• IPSAS 29, Financial Instruments: Recognition and Measurement
• IPSAS 30, Financial Instruments: Disclosures

The effective date of these three standards is for annual financial statements covering periods beginning on or after January 1, 2013.

In the current global economic environment, when governments are increasingly raising debt through the capital markets as a result of their financial interventions in the private sector, the need for well-developed financial instruments standards is urgent and will enhance transparency.

The IPSASB also approved for issue, IPSAS 31, Intangible Assets. The effective date of this standard is for annual financial statements covering periods beginning on or after April 1, 2011.

In addition, the IPSASB approved for issue Improvements to IPSASs, which includes amendments to converge existing IPSASs with the relevant IFRSs of the International Accounting Standards Board (IASB) and arise from improvements adopted by the IASB in May 2008. The effective date for this standard is for annual financial statements covering periods beginning on or after January 1, 2010.

The IPSASB issued another converged standard earlier this month - IPSAS 27, Agriculture.

The new standards will be available to download free of charge from the IFAC website (web.ifac.org/publications) in January 2010.

2. Outcomes of December IPSASB Rome Meeting

Meeting Highlights from the IPSASB's December meeting in Rome are now available in English, with plans to translate them into French and Spanish. At this meeting, the IPSASB addressed the following topics, among others:

• Substantial Convergence with IFRSs - See Item 1 above.
• Strategy - The IPSASB considered a number of aspects of its future strategy and operational plan for 2010-2012. Further to discussions initiated in September 2009, the need for public oversight of the IPSASB was identified as a desirable outcome and the IPSASB and IFAC will identify and evaluate oversight models in the future. Some key messages as far as strategic themes include the paramount importance of the public sector conceptual framework project and the urgent need to progress this project over the next three years. The IPSASB will continue with its strategy discussions in April at which time it will approve a work plan for 2010 while considering a longer term strategy and vision for the next few years.
• Conceptual Framework: Consultation Paper - Phase 1 - The IPSASB continued its review of the responses to the Consultation Paper, Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities. The paper explores the objectives of financial reporting and the scope of financial reporting. It also examines the qualitative characteristics of information included in general purpose financial reports.

The December 2009 meeting was the last under the chairmanship of Mike Hathorn; his three-year term ending on December 31, 2009. In addition to the significant achievement of substantial convergence with IFRSs, his tenure has been marked by a communications and outreach program that has contributed to the significant momentum involving global interest in, and the adoption of, IPSASB standards. 

The next IPSASB meeting will be held in Toronto, Canada on April 6-9, 2010.

3. Exposure Draft Approved for Service Concession Arrangements

The IPSASB has approved the proposed guidance, Exposure Draft (ED) 43, Service Concession Arrangements: Grantors, with a proposed publication date in February 2010 and a comment period to June 30, 2010.

The proposed guidance addresses the grantor accounting issues that correspond to the operator accounting issues addressed in International Financial Reporting Interpretations Committee (IFRIC) interpretation 12, Service Concession Arrangements. 

The ED is a mirror of IFRIC 12 in terms of the scope of arrangements covered, terminology and criteria for asset recognition. Application Guidance is proposed for applying certain existing IPSASs to various parts of a service concession agreement, including asset, liability, revenue, and expense items.

The ED will soon be accessible at the Exposure Drafts and Consultation Papers section of the IFAC website at www.ifac.org/Guidance/EXD-Outstanding.php.

4. IFAC Launches Improved Publications Website

IFAC has launched a newly redesigned Publications and Resources website that offers users expanded functionality and interactivity, as well as greater access to IFAC's growing selection of publications and guidance.

Featuring over 200 titles developed by IFAC boards and committees, the new site features a more modern appearance, enhanced navigation, and updated item descriptions.

The scope of the site has also been broadened to include a wider range of IFAC publications and resource materials, including adoption and implementation support materials, exposure drafts, and consultation Papers.

The site can be accessed at web.ifac.org/publications. The section devoted to IPSASB publications and resources can be found at web.ifac.org/publications/international-public-sector-accounting-standards-board.

5. Share IPSASB eNews with Your Colleagues

The IPSASB issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and advise them to subscribe to IPSASB eNews by following these simple steps:

    1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
    2. Enter your email address, name, and country.
    3. Select "Public Sector eNews" from the check list as well as any other eNews alerts that you would like to receive.

You will receive the next issue of the IPSASB eNews directly into your inbox.

For more information about any of the items mentioned above or other information about the IPSASB, please contact: communications@ifac.org or visit the IPSASB's home page at www.ipsasb.org.

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 159 members and associates in 124 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

In This Issue:

1. IESBA Issues Revised Code of Ethics
2. Revisions Strengthen Independence, Clarify Requirements
3. Member Bodies and Firms Encouraged to Develop Implementation Plans
4. Resources Available to Support Adoption and Implementation of Revised Code
5. Ethics Board Launches Process for Developing 2010-2012 Strategic Plan
6. Tell Others About Ethics eNews

1. IESBA Issues Revised Code of Ethics

The International Ethics Standards Board for Accountants (IESBA) issued in July, following the approval and consideration of due process by the Public Interest Oversight Board, a revised Code of Ethics for Professional Accountants (the Code). The revised Code clarifies requirements for all professional accountants and significantly strengthens the independence requirements of auditors.

The Code is effective on January 1, 2011.

The full text of the revised Code can be accessed from the Ethics section of the IFAC online bookstore at www.ifac.org/Store.

2. Revisions Strengthen Independence, Clarify Requirements

The revisions to Code of Ethics for Professional Accountants (the Code) include the following changes, among others, to strengthen the Code's independence requirements:

• Extending the independence requirements for audits of listed entities to all public interest entities;
• Requiring a cooling-off period before certain members of the firm can join public interest audit clients in certain specified positions;
• Extending partner rotation requirements to all key audit partners;
• Strengthening some of the provisions related to the provision of non-assurance services to audit clients;
• Requiring a pre- or post-issuance review if total fees from a public interest audit client exceed 15% of the total fees of the firm for two consecutive years; and
• Prohibiting key audit partners from being evaluated on or compensated for selling non-assurance services to their audit clients.

Also included within the revisions are changes in the drafting conventions used in the Code. These changes, which include the use of the word "shall," present the Code's requirements in clearer, more precise language.

3. Member Bodies and Firms Encouraged to Develop Implementation Plans

Given the effect the revisions to Code of Ethics for Professional Accountants (the Code) will likely have on professional practice, and the fact that they will go into effect less than 18 months from now, member bodies, firms, and other relevant stakeholders are encouraged to develop plans for implementing the revised Code by the effective date of January 1, 2011.

Issues to consider while developing implementation plans would include the implications of:

• Expanded partner rotation requirements;
• New independence requirements for public interest entity audit clients; and
• Expanded requirements related to the provision of non-assurance services to audit clients

4. Resources Available to Support Adoption and Implementation of Revised Code

The IESBA has developed a number of resources to support adoption and implementation efforts for the revised Code of Ethics for Professional Accountants (the Code).

These materials include the following:

• A high-level overview of the Code
• A detailed presentation slide package and speaking notes addressing the independence requirements contained in section 290
• A presentation slide package and speaking notes addressing the independence requirements for audits of public interest entities
• Templates, both high-level and detailed, to help member bodies/firms analyze differences between the requirements in their jurisdiction and the requirements of the revised Code
• Comparisons, both high-level and detailed, to the existing Code
• A short paper describing the changes from the existing Code
• An article for member bodies describing the process of developing the Code, highlighting some key changes and emphasizing the need to start the process of implementation

All of these support materials will be available soon in the Ethics section of the IFAC website (www.ifac.org/Ethics).

5. Ethics Board Launches Process for Developing 2010-2012 Strategic Plan

In April 2009, the IESBA launched a strategic review to develop the 2010-2012 Strategic and Operational Plan.

The IESBA's terms of reference and due process require the strategic review to include a formal survey of key stakeholders' views about issues that they believe should be addressed in the immediate future. The IESBA conducted a short survey to solicit these views in July. The IESBA will consider this feedback as it develops its Strategic Plan which will be exposed for public comment.

To view the 2007-2009 Strategic and Operational Plan, please visit the Ethics section of the IFAC online bookstore at www.ifac.org/Store.

6. Tell Others About Ethics eNews

The IESBA issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive this eNews by following these simple steps:

1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter your email address, name, and country.
3. Select "Ethics eNews" from the checklist, as well as any other eNews alerts that you would like to receive.

The next issue of the Ethics eNews will be delivered directly to you in your inbox.

For more information about any of the items mentioned above or other information about the IESBA, please contact: communications@ifac.org.

About the IESBA and IFAC

The IESBA develops ethical standards and guidance for use by professional accountants. It encourages member bodies of IFAC to adopt high standards of ethics for their members and promotes good ethical practices globally. The Public Interest Oversight Board oversees the activities of the IESBA and, as one element of that oversight, establishes its due process and working procedures.

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, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.