The International Auditing and Assurance Standards Board (IAASB) today released International Standard on Auditing (ISA) 600 (Revised). The revised standard addresses special considerations that apply to audits of group financial statements (group audits). Group audits are often more complex and challenging than single-entity audits because a group may have many entities or business units across multiple jurisdictions, and component auditors may be involved. The revised standard becomes effective for audits of group financial statements for periods beginning on or after December 15, 2023.

“ISA 600 (Revised) is a significant step forward to enhance the consistent performance of quality group audit engagements and thereby supports users’ interests and broader financial stability,” said Tom Seidenstein, IAASB Chair. “Group audits is an area identified by regulators requiring attention. The changes in the standard build off other recent IAASB revisions, such as the revisions to the quality management standards, and should enhance audit quality by strengthening the accountability of group auditors and clarifying the interactive relationship between group and component auditors.”

ISA 600 (Revised) includes a robust risk-based approach to planning and performing a group audit. The approach focuses the group auditor’s attention and work effort on identifying and assessing the risks of material misstatement of the group financial statements and designing and performing further audit procedures to respond to those assessed risks. It also recognizes that component auditors can be, and often are, involved in all phases of the group audit. The standard furthermore promotes a clear, proactive and scalable approach for group audits that can be applied to today’s evolving group audit structures.

The IAASB also developed a Basis for Conclusions and factsheet to support the implementation, which are also available on the IAASB’s website.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

As the global voice of the accountancy profession, IFAC has supported the establishment of the International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of sustainability disclosures for investors and capital markets, endorsed by IOSCO and implemented around the world. This will lead the way to a harmonized, global system of consistent, comparable, reliable, and assurable information. 

Now, two new proposed standards from the ISSB address the urgency of the climate crisis and chart a course for companies and policymakers to transition to ISSB Sustainability Disclosure Standards as they become available. Importantly, they build upon TCFD recommendations and SASB Standards, in addition to the work of the Climate Disclosure Standards Board, the International Accounting Standards Board, the Value Reporting Foundation, and the World Economic Forum.

IFAC CEO Kevin Dancey said, “Alignment among various sustainability-related initiatives is important, so we strongly support the ISSB’s continued work with international organizations and jurisdictions so that these global baseline proposals can be incorporated into jurisdictional requirements and be compatible with disclosures that address broader stakeholder sustainability information needs. Following an inclusive and transparent due process, consistent with that of the IASB, will drive confidence and acceptance around the world.”

IFAC will be responding and encourages members of the accountancy profession to contribute their expertise and feedback by 29 July 2022 on these two proposals, as well as related jurisdiction-specific initiatives, so that global alignment and interoperability, connectivity to financial information, and the assurability of sustainability disclosures is achieved.

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The International Federation of Accountants (IFAC) welcomes the U.S. SEC’s proposal on enhanced climate disclosures, as we continue our work in support of a global system for delivering consistent, comparable and assurable sustainability information.  The SEC’s action is one more important demonstration of the need to enhance and evolve corporate reporting.

Sustainability-related disclosure is now a core component of the corporate reporting ecosystem, as reflected in global and jurisdiction-specific initiatives.  Climate and other ESG matters are decision critical.  Regulatory frameworks must promote rigor, clarity, and consistency of information, both to meet investor demands and those of other stakeholders. 

The SEC’s proposal also acknowledges the importance of high-quality assurance—to bring confidence and trust to what is disclosed.  This is consistent with the work of IOSCO at the global level, which has identified independent assurance as a “key element of building trust in sustainability reporting.”  See IFAC’s Vision for High-Quality Assurance of Sustainability Information.

IFAC CEO Kevin Dancey said, “This SEC proposal allows policymakers and stakeholders worldwide to compare and contrast important initiatives that are taking place on climate-related disclosure, including the work of the newly established International Sustainability Standards Board under the IFRS Foundation, that of the European Union, and others. 

“Alignment among all these initiatives is imperative for decision-useful information. It’s critical that we create a harmonized, global system of sustainability and climate disclosure and avoid a patchwork of standards and regulations emerging across jurisdictions.  IFAC also supports regulations that promote narrative as well as performance-focused measurements and that better align sustainability disclosure with financial reporting.”

Read more about IFAC’s support for global sustainability-related standards on the IFAC website.

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

Together with ICAEW, The International Federation of Accountants (IFAC) today released a new installment in its Anti-Money Laundering: The Basics educational series: Installment Seven: Virtual Assets.  

The publication is part of a series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment seven looks at the broad new class of assets that have emerged over the past decade known as virtual assets, including Bitcoin and NFTs (non-fungible tokens).

Anti-Money Laundering: The Basics is user-friendly, easily accessible, and will be a resource for Small and Medium Practices (SMPs) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference. Future installments will examine trends in money laundering and tools to fight back illegal activities.

Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point. 

For more information about IFAC, visit www.ifac.org.

For more information about ICAEW, visit https://www.icaew.com/.

The International Auditing and Assurance Standards Board (IAASB) approved a new work plan, A Public Interest Focus in Uncertain Times, during its December 2021 meeting. Pending approval by the Public Interest Oversight Board (PIOB), anticipated in early April 2022, the work plan will guide the IAASB’s work in 2022 and 2023, reflecting the IAASB Strategy for 2020-2023.

Sustainability and environmental, social, and governance (ESG) assurance are a prominent addition to the new work plan and will see increased time and resourcing for 2022–2023. In addition, the new work plan highlights candidate topics in the Audit and Review space (e.g., responding to assessed risks of material misstatement and the impact of technology on various standards) that the IAASB will consider for a further project to commence in 2023. A key focus will remain the progression and completion of projects underway at the start of 2022, including audits of financial statements of less complex entities, audit evidence, going concern, and fraud.

“Based on the increasing global attention, and urgency, around sustainability/ESG reporting and the assurance thereof, the IAASB is dedicating additional capacity and resources to this workstream. We are committed to acting with a sense of urgency, building off our existing platform of assurance standards that are already used worldwide,” according to IAASB Chair Tom Seidenstein. “Our collaboration with others and an expedited information gathering phase will allow us to determine the precise scope and timing of our efforts so we take the right action to meet the growing public demand.”

“While we’re awaiting PIOB approval, we want our stakeholders to know what is on our program for this year and 2023, and be able to plan accordingly,” said IAASB Technical Director Willie Botha. “The initiatives and projects in our work plan, especially sustainability/ESG assurance, are those our board believes currently are the most pertinent public interest issues to address in ensuring the continued credibility and confidence in our work as global audit and assurance standard setter.”

Extended External Reporting Guidance Renamed

To help stakeholders more readily identify and understand available guidance for assurance of sustainability/ESG reporting, the IAASB agreed to rename a key piece of guidance. The newly renamed Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Sustainability and Other Extended External Reporting Assurance Engagements was originally released in April 2021. It responds to key stakeholder-identified challenges commonly encountered when applying International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information to such engagements.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

As technology advances and the world becomes more complex, the professional accountant’s skills and competencies, underpinned by ethics and recognizing their public interest responsibility, are critical in navigating new challenges and opportunities and ensuring trust in the profession. To help professional accountants and stakeholders better understand these topics, the Chartered Professional Accountants of Canada (CPA Canada), the Institute of Chartered Accountants of Scotland (ICAS), the International Ethics Standards Board for Accountants (IESBA), and the International Federation of Accountants (IFAC) have released Technology is a double-edged sword with both opportunities and challenges for the accountancy profession, the second in a four-part thought leadership series examining the professional accountant’s role in a new technological era.

The publication examines the impact of rapid technological change and the importance of ethical leadership from the lens of the professional accountant. It also provides practical guidance to both professional accountants and professional accountancy organizations.

Technology is a double-edged sword with both opportunities and challenges for the accountancy profession follows Complexity and the professional accountant: Practical guidance for ethical decision-making, the first publication in the series, and builds off a collaborative exploratory paper and global roundtable event called Ethical Leadership in an Era of Complexity and Digital Change, which CPA Canada, ICAS and IFAC jointly hosted earlier in 2021. The third and fourth publications in the series will focus on identifying and mitigating bias and mis-/disinformation, and mindset and enabling skills.

The publication is available on the IFAC Knowledge Gateway and the IESBA’s webpage Technology: Ethics & Independence Considerations.

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About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) works collaboratively with the provincial, territorial and Bermudian CPA bodies, as it represents the Canadian accounting profession, both nationally and internationally. This collaboration allows the Canadian profession to champion best practices that benefit business and society, as well as prepare its members for an ever-evolving operating environment featuring unprecedented change. Representing more than 220,000 members, CPA Canada is one of the largest national accounting bodies worldwide. cpacanada.ca

About ICAS
The Institute of Chartered Accountants of Scotland (ICAS) is the global professional body for Chartered Accountants. We educate, examine and lead, enabling excellence whilst always working for the wider public good. All 23,000 ICAS members have earned our world-class CA designation of Chartered Accountant, the qualification that’s shaped an international business community spanning industries and continents, full of local heroes and corporate leaders. And we continually foster the bonds between our members, so CAs at all stages of their careers can learn from shared experience and connect their ambitions to success. For further information please visit – icas.com.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

About IFAC

The International Federation of Accountants (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. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.

Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies.

Today, the International Federation of Accountants (IFAC) published its vision for high-quality assurance of sustainability information—calling out best practices identified during its year-long, global engagement campaign related to the State of Play in Sustainability Assurance. This vision addresses the importance of global standards, regulation that supports decision-useful disclosure, and the value of an interconnected approach to sustainability and financial information reporting and assurance.

“In order to be trusted, sustainability disclosure must be subject to high-quality, independent, external assurance,” said IFAC CEO Kevin Dancey. “Sustainability information must take its rightful place in the corporate reporting ecosystem and stakeholder confidence must be on par with financial reporting. Given the announcement of the International Sustainability Standards Board, the publication of a Climate Prototype, and IOSCO’s continued support for the initiative, it’s an appropriate time for regulators and authorities to put sustainability assurance on the agenda, as already proposed in the EU’s Corporate Sustainability Reporting Directive. We urge IFAC member organizations to promote high-quality reporting and assurance through discussions with policymakers, regulators, investors, and other stakeholders.”

As a harmonized, global reporting system for reporting sustainability information takes shape, based on the Building Blocks Approach, emerging regulatory frameworks should be designed to promote robust, decision-useful disclosure and disincentivize a compliance-based approach to both reporting and assurance. Aligning sustainability disclosure with financial reporting and connecting sustainability assurance engagements with financial statement audits will maximize value to reporting entities and their stakeholders. High-quality, global standards—for reporting, assurance, and ethical professional conduct—play a key role in meeting this objective and in avoiding unnecessary costs and reduced comparability and consistency that result from regulatory fragmentation.

Read more about IFAC’s support for global sustainability-related standard on the IFAC website.

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

Today, IFAC released a publication, “Sustainability Information for Small Businesses: The Opportunity for Practitioners,” exploring the diverse benefits of embracing sustainability information. 

The report examines the importance of readily available, relevant, and reliable sustainability information for achieving better-informed decisions, enhanced strategic and risk management, and more thorough and valuable reporting to external stakeholders. It also highlights a range of emerging services that practitioners can provide to their clients, including advisory services, reporting, agreed-upon procedures (AUP) engagements, and assurance services.

Small businesses make up more than 90 percent of businesses worldwide; they are critical to achieving sustainable outcomes for economies, the environment and society. They can find significant advantages from establishing (or enhancing) processes, systems and controls for identifying, measuring, and analyzing sustainability information. This can include improved efficiencies and performance, as well as differentiation from competitors. Small businesses are also likely to be subject to sustainability-related reporting information requests from a diverse range of stakeholders, including large companies, banks, and suppliers—if they are not already. 

This publication was developed with advice and guidance from the IFAC Small and Medium Practices (SMP) Advisory Group and builds on the Advisory Group’s work on practice transformation. 

Although focusing on sustainability information and related services may seem premature for some small businesses and practitioners, the field is growing quickly. To speak to different practitioners’ unique circumstances, the publication includes suggestions on building knowledge and competencies and taking initial steps. 

IFAC will explore these issues further in a webinar on December 15 titled “Sustainability Offers New Opportunities for SMPs” (with simultaneous translation into Spanish and French). The webinar will feature a panel discussion with practitioners who are providing services in this space.

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

IFAC’s Professional Accountants in Business (PAIB) Advisory Group has compiled insights on how accountants are contributing to value creation and sustainability in their organizations in both the private and public sectors in a new report, The Role of Accountants in Mainstreaming Sustainability.  

This report includes highlights from the PAIB Advisory Group’s October 2021 meeting, including: 

• Achieving sustainability and decarbonization under the stewardship of CFOs and accountants 
• Navigating potentially disruptive transitions by investing in technology, innovation, talent, and partnerships  
• Optimizing and capturing value for a range of stakeholders 
• PAIB perspective on digital assets and cryptocurrencies 

Sanjay Rughani, IFAC PAIB Advisory Group Chair says: “The need for CFOs and finance functions to contribute strategically as value partners is increasing to advance sustainability. By sharing our learnings as a profession, we can continue to elevate our focus and actions on higher value activities to support and empower professional accountants to take on more strategic roles.” 

Access the report and related case studies.  

The International Federation of Accountants (IFAC), the voice of the global accountancy profession, this week announced its new board members, and that it is maintaining a female-majority board for the third consecutive year in a row. Over the course of the past decade, IFAC is proud to have improved the gender balance on its key governing bodies.

The new and reappointed IFAC Board members and their nominating member organizations are:

New appointments:

• Gregory Anton (Association of International Certified Professional Accountants, USA)
• Tashia Batstone (Chartered Professional Accountants of Canada, Canada)
• Jeanine Poggiolini (South African Institute of Chartered Accountants, South Africa)

Reappointments:

• Lisa Padmore (Institute of Chartered Accountants of Barbados, Barbados)
• Margret Pétursdóttir (Nordic Federation of Public Accountants, Iceland)
• Dr. Jianhua Tang (Chinese Institute of Certified Public Accountants, China)
• Ayşe Arıak Tunaboylu (Union of Chambers of Certified Public Accountants of Turkey / Expert Accountants' Association of Turkey, Turkey)

New IFAC Member Organizations Admitted

In addition to the election of new Board members, the IFAC Council also approved new members and associate member organizations.

New IFAC Members:

• Institut Akuntan Publik Indonesia (IAPI) – Indonesia
• Vietnam Association of Certified Public Accountants (VACPA) – Vietnam

New Associates:

• United Arab Emirates Accountants and Auditors Association (UAE AAA) – United Arab Emirates
• Yemeni Association of Certified Public Accountants (YACPA) – Yemen

The new appointments, reappointments and membership decisions were approved at IFAC’s 2021 Council meeting, held virtually on November 10-11.