With the increased volatility in the modern business environment and the recent financial and economic crises around the world, the effective management of risk in organizations—including good internal control—has taken on even greater importance. Effective risk management facilitates the achievement of an organization’s objectives, while complying with legal, regulatory, and societal expectations, and enables the organization to better respond and adapt to surprises and disruptions. IFAC, therefore, commends COSO on taking up the challenge to update its ERM Framework.
In this submission, IFAC commends the OECD’s development and revision of guidelines on insurer governance. The sector is a vital part of the global financial system, and governance guidelines and high-level principles for insurers will help support robust performance and market and public credibility. We note that guidelines are vital, but they cannot alone ensure governance practices are implemented, or that ethical behavior will result. Effective guideline implementation will require careful consideration and support for their promotion and use.
IFAC commends FEE for its initiative on the future of corporate reporting, and emphasizes Integrated Reporting as the way forward to better informed and more effective capital markets through real change in the way organizations make decisions, based on taking a longer-term perspective. IFAC recommends that the proposed CORE report should be based on Integrated Reporting, including the principles and content elements in the International <IR> Framework.
IFAC is pleased to respond to the UK House of Commons’ Public Administration and Constitutional Affairs Committee’s inquiry into government accounts. In addition to IFAC’s overall comments and based on its understanding of the public sector reporting framework and arrangements in the UK, IFAC believes that it is a model to which other countries might well aspire. Alongside other countries that have strong public sector financial reporting arrangements (like New Zealand and Australia), the UK should see itself as a leader in this field.
The IFAC SMP Committee supports the approach to restructuring taken by the IESBA and the general direction of the project. The work undertaken to increase the clarity of the language will help the understandability of the Code, in particular the simpler and shorter sentences and increased use of the active voice. The SMP Committee believes that the needs of the SMP community should be at the forefront as the IESBA takes this project forward in Phase 2.
The IFAC SMP Committee generally supports IESBA’s proposed revisions to the extant Code pertaining to the conceptual framework. However, it believes that the new overarching requirements for all PAs to apply the Conceptual Framework (R120.3 and R300.2) should be replaced with overarching objectives for the PA, which are supported by more specific requirements.
