The IAASB recently published its third Professional Skepticism Communiqué (click here), which provides an update to stakeholders on the IAASB’s efforts to appropriately reflect professional skepticism in its standards.

The Professional Skepticism Communiqué also includes other relevant news and information and recent activities of the IESBA related to professional skepticism.

In September, New York City played host to the Third Annual Joint IAASB/IESBA Plenary Meeting, the latest advance in a coordination effort between the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA). The annual joint meeting provides a forum to look at issues and opportunities common to the work of both international boards. 

Building on their overarching commitment for enhanced connectivity and coordination to better serve the public interest, the boards discussed matters of mutual interest and opportunities for collaboration. One presentation, which focused on the IAASB and IESBA future strategies and work plans, discussed the notion of “joined-up thinking.”

“Both standard setting boards are committed to seeking alignment to the fullest extent possible on overlapping issues and identifying issues of common concern to help serve the public interest,” said Tom Seidenstein, recently appointed chair of the IAASB. “In many instances, the boards can achieve a common position. Even if not achieved, it is important to understand the reasons for the different positions and to be transparent to stakeholders about those reasons.”

The theme for this year’s joint session was “Acting on Coordination” and there was a clear sense that both boards realize that ‘joined-up thinking’ can be an important enabler for each to achieve its goals. Board members and official observers participated in discussion groups and exchanged views on selected policy issues. Discussion items included finding a pathway to convergence on the treatment of public interest in their respective standards.

“It is about understanding each other’s views and recognizing where the gaps may be in process, or language, or reason,” said Stavros Thomadakis, Chair of the IESBA.  “Such insights will be valuable in helping the boards deepen and develop joint thinking in their coordination both on specific current projects and in priorities and strategies.”

IAASB and IESBA have committed to holding the fourth annual plenary meeting in 2020. Meanwhile, coordination on current and upcoming projects, as well as strategic planning, will continue as part of fulfilling each board’s standard setting mandate.

In September, New York City played host to the Third Annual Joint IAASB/IESBA Plenary Meeting, the latest advance in a coordination effort between the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA). The annual joint meeting provides a forum to look at issues and opportunities common to the work of both international boards.

Building on their overarching commitment for enhanced connectivity and coordination to better serve the public interest, the boards discussed matters of mutual interest and opportunities for collaboration. One presentation, which focused on the IAASB and IESBA future strategies and work plans, discussed the notion of “joined-up thinking.”

“Both standard setting boards are committed to seeking alignment to the fullest extent possible on overlapping issues and identifying issues of common concern to help serve the public interest,” said Tom Seidenstein, recently appointed chair of the IAASB. “In many instances, the boards can achieve a common position. Even if not achieved, it is important to understand the reasons for the different positions and to be transparent to stakeholders about those reasons.”

The theme for this year’s joint session was “Acting on Coordination” and there was a clear sense that both boards realize that ‘joined-up thinking’ can be an important enabler for each to achieve its goals. Board members and official observers participated in discussion groups and exchanged views on selected policy issues. Discussion items included finding a pathway to convergence on the treatment of public interest in their respective standards.

“It is about understanding each other’s views and recognizing where the gaps may be in process, or language, or reason,” said Stavros Thomadakis, Chair of the IESBA.  “Such insights will be valuable in helping the boards deepen and develop joint thinking in their coordination both on specific current projects and in priorities and strategies.”

IAASB and IESBA have committed to holding the fourth annual plenary meeting in 2020. Meanwhile, coordination on current and upcoming projects, as well as strategic planning, will continue as part of fulfilling each board’s standard setting mandate.

On Wednesday, November 20^th, at 10:00 AM SST (Singapore) the International Ethics Standards Board for Accountants (IESBA), the ASEAN Federation of Accountants, and the Institute of Singapore Chartered Accountants will co-host a 90-minute webinar focusing on the key features of the International Code of Ethics for Professional Accountants.

Wednesday November 20, 2019 at 10:00 AM SST (Singapore Standard Time): Register now

During the webinar, the IESBA representatives will explain the Code’s new structure; as well as the substantive revisions, including enhancement to the conceptual framework and provisions relating to inducements, including gifts and hospitality; pressure; and preparing and presenting information. The webinar will also touch on the new Non-compliance with Laws and Regulation (NOCLAR) and revised Long Association provisions; as well as the IESBA’s new eCode which was launched in June 2019.

Effective since mid-June 2019, the Code reinforces professional accountants’ responsibility to comply with the five fundamental principles of ethics and emphasizes the International Independence Standards that apply in performing audits, reviews and other assurance engagements.

More information about the Code is available at the IESBA’s website.   

If you have questions about this webinar, please email Geoff Kwan at geoffkwan@ethicsboard.org.  

The Finance Minister of Portugal, Mário Centeno, spoke at the IPSASB's September 2019 meeting in Lisbon, Portugal. 

In his speech, he highlights the importance of IPSAS in public financial management, as well as the state of IPSAS adoption in Portugal.

The full speech text can be accessed by clicking here.

In celebration of World Standards Day, IFAC (International Federation of Accountants) today released a new report detailing how and where international accountancy standards—which focus on audit and assurance, ethics, education, and private and public sector accounting—are being adopted and implemented globally.

The report, which includes data from the more than 170 professional accountancy organizations that comprise IFAC’s membership, shows strong and sustained support for both the adoption and implementation of international standards, especially in areas where IFAC member organizations are involved in the process from start to finish.

The International Standards: 2019 Global Status Report reveals:

• 90+% of jurisdictions examined use International Standards on Auditing, International Financial Reporting Standards, and the International Code of Ethics for Professional Accountants.
• 80+% of jurisdictions examined have monitoring & enforcement mechanisms for quality assurance and investigation and discipline.
• 76% of IFAC member organizations have some level of authority in adopting international standards and best practices.
• IFAC member organizations are instrumental in ensuring high-quality standards’ implementation through advocacy, raising awareness, technical support, translation, training and enforcement.

The report also shines a light on the important and often untold story of how standards are adopted and implemented—a process that can be as complex as developing a standard.

“Since there are no international laws requiring nations to adopt and implement international standards, support from IFAC’s member organizations for these dual objectives is critically important to progress,” according to IFAC CEO, Kevin Dancey. “This new report reinforces the impact of standards in driving transparency and creating a common language for high-quality financial information.”

 According to the new report, there is a positive trend in international standards’ usage where IFAC member organizations have at least some authority in the standard-setting and regulatory environment. However, additional multi-stakeholder support from international policymakers and regulatory organizations, as well as leaders from government, academia, and business, is required to extend the adoption success story by creating the right conditions for implementation.

“International standards have come a long way since 2000 when there was little to no global adoption. While there is always more to be done, IFAC member organizations play a vital role in ensuring the successful implementation of international accountancy standards, which ultimately help drive sustainable economic growth and financial market stability in their respective jurisdictions,” said Dancey.

About the Report
The International Standards: 2019 Global Status Report's data comes from the IFAC Member Compliance Program and covers 173 IFAC member organizations and the 130 jurisdictions in which they operate. The report establishes a baseline on international standards’ adoption and implementation and explores how accountancy best practices and IFAC member organizations have a positive impact.

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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

A global alliance of accounting organisations has found that firms that offer both audit and non-audit services are best positioned to deliver robust and reliable assurance.

The report published today by Chartered Accountants Australia and New Zealand (CA ANZ), the Association of Chartered Certified Accountants (ACCA) and the International Federation of Accountants (IFAC) provides compelling evidence that “the presence of multidisciplinary firms in a large and evolving corporate reporting system fills a valuable market need” and simultaneously commends how the rules that have evolved over the past two decades “mitigate risks associated with audit firms providing non-audit services to some audit clients.”

The report, Audit Quality in a Multidisciplinary Firm, draws its findings from leading academic literature, views of policy experts, and an in-depth study of how regulators worldwide manage risk. It is meant to contribute constructively to the international debate on the multidisciplinary firm business model and auditors providing non-audit services.

The report notes that high quality audits require “a diverse skill base” and that “the multidisciplinary model is one of the best mechanisms to develop the skills, expertise and consistency needed for quality audits.”

The narrower issue of providing non-audit services to audit clients is more nuanced. The report notes, “There continues to be concern that independence is compromised in doing so, in spite of strict rules that prohibit or restrict firms from providing such services to audit clients.

“Services that are permitted quite often are complementary to the audit, and threats to independence can be effectively mitigated. However, demonstrating to the public that perceived conflicts of interest are being appropriately managed is challenging.”

The report continues: “As this issue continues to be considered, it is important to remember that evidence cited in this paper calls into question the need for sweeping regulatory changes that could have unintended consequences on audit quality” and notes that “the vast majority of non-audit fees actually come from clients for whom firms do not provide audit services.”

Maggie McGhee, executive director - governance at ACCA, said:

“We welcome a robust debate on these issues that no doubt will continue to be important for the profession and policy makers, and encourage a conversation grounded on the facts.

“ACCA is delighted to publish this report with our colleagues from CA ANZ and IFAC. It is the latest example of the benefits which our alliance creates for our members and our students, as well as for the accountancy profession and the public interest.”

Amir Ghandar, CA ANZ Reporting & Assurance Leader, said:

“The multidisciplinary base of auditing firms is a strength that contributes to audit quality, but firms and the profession at large must continue to actively establish and demonstrate a culture of integrity through governance, transparency, and our core ethics.

“Robust independence rules have evolved over the past two decades to mitigate real or perceived risks of conflict of interest associated with audit firms providing non-audit services, and these should continue to evolve in order to keep pace with public expectations and emerging challenges.”

Kevin Dancey, IFAC CEO, said:

“Questions about audit quality, independence, and competition are always worth asking. But no one should rush to conclusions. The business case for the multidisciplinary model is strong and there is significant evidence in support of the model.

Let’s work with the facts as we continue to best serve the public interest.”

###

 For media enquiries, contact:

CA ANZ: priya.kumar@charteredaccountantsanz.com
ACCA: alex.murphy@accaglobal.com
IFAC: geenaderose@ifac.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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce. 

About CA ANZ
Chartered Accountants Australia and New Zealand (CA ANZ) is a professional body comprised of over 120,000 diverse, talented and financially astute members who utilise their skills every day to make a difference for businesses the world over.

Members are known for their professional integrity, principled judgment, financial discipline and a forward-looking approach to business which contributes to the prosperity of our nations.

We focus on the education and lifelong learning of our members, and engage in advocacy and thought leadership in areas of public interest that impact the economy and domestic and international markets.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

To help our stakeholders understand the IESBA’s recent proposed Code of Ethics changes to promote role and mindset expectation, the IESBA hosted a webinar detailing these changes.

Listen to IESBA Deputy Chair Richard Fleck share an overview of the proposed revisions, including:

• Highlighting professional accountants’ wide-ranging role in society and the relationship between compliance with the Code and the responsibility to act in the public interest;
• Enhancing the robustness of the fundamental principles of integrity, objectivity and professional behavior;
• Requiring an inquiring mind when applying the conceptual framework; and
• Highlighting the importance of being aware of bias and having the right organizational culture.

Comments to the Exposure Draft, Proposed Revisions to Promote the Role and Mindset Expected of Professional Accountants, are requested by October 31, 2019. For more information, please visit the Role and Expectations web page.

Dear Stakeholders:

On behalf of the IAASB, we are pleased to share our public report, Foundation for the Future, summarizing the Board’s achievements from January 1, 2016 to June 30, 2019.

This period, chaired by Professor Arnold Schilder, was one of great productivity for our Board and staff. Five new and revised standards were approved. Six exposure drafts were issued and we consulted with stakeholders on five key areas. The IAASB also published nine project proposals, project updates and feedback statements. To help our stakeholders better understand and implement our standards, the IAASB developed 31 implementation and support resources.

In line with the 2015-2019 strategy, the IAASB’s activities have focused on enhancing audit quality and addressing engagements other than audits of financial statements. The IAASB has also increasingly focused on what more can be done to better understand and address the challenges some users face in applying the International Standards on Auditing in audits of less complex entities.

In addition, the IAASB has remained true to our commitment to a rigorous program of international outreach (IAASB members and staff engaging with stakeholders by way of personal visits and meetings, participation in conferences, discussion groups and forums, as well as webinars and other methods of communication to inform and engage on technical topics). From 2016 to 2019, almost 400 outreach activities across 44 countries were conducted with key stakeholder groups. By working with our stakeholders and strengthening our relationships, we are better able to understand issues affecting our standards and promote their adoption and implementation.

As we enter a new phase for the IAASB, we are proud of the broad reach of our standards and recognize the significant responsibilities that come with this. During the period covered by this report, the number of jurisdictions worldwide that use or are committed to using the International Standards on Auditing increased from 111 to 130.

We are now completing the development of a new strategy and work plan in the knowledge that there is a strong foundation in place. At the same time, we accept the need to identify and respond to emerging challenges to ensure that we continue to deliver international standards that are relevant, robust and operable.

 
Yours sincerely,


Tom Seidenstein                                               Willie Botha
Chair (Effective July 2019)                                 Technical Director