High-quality audits are the backbone of the global financial system. Each year, thousands of audits – including over 40,000 audits of public listed companies – make organizations more transparent and trustworthy, help attract investor capital, help secure jobs, and help economies thrive.

The International Federation of Accountants (IFAC) and the global accountancy profession are committed to continuous improvement and recognize the negative consequences of any audit failure. As audit reviews unfold in various national jurisdictions, IFAC is setting out its recommendations for achieving high-quality audits.

“Audits contribute meaningfully to the functioning of organizations, financial markets, and economies. While many thousands of audits are conducted each year without any issues, improvements are needed to ensure consistent high quality,” said IFAC CEO Kevin Dancey. “This, however, cannot be achieved in a vacuum – all participants in the audit and assurance ecosystem must work together in striving to achieve high-quality audits 100% of the time. It is a vital part of our profession’s public interest mandate.”

In order to achieve high-quality audits, IFAC identifies five essential factors: the right process, the right people, the right governance, the right regulation, and the right measurement.

IFAC calls on all participants to create an environment that consistently produces high-quality audits. In particular, firms, Professional Accountancy Organizations (PAOs), regulators, audit committees and audit/assurance professionals must work to:

• Approach audits as a value-added service; not as a compliance exercise
• Evolve new assurance services to meet the needs of all stakeholders
• Continue focus on enhancing skills and competencies, adhering to fundamental ethical principles
• Ensure diversity in hiring practices
• Enhance transparency and communication from audit committees, firms, and PAOs
• Adopt a prudential and evidence-based approach to regulation

“As the global voice of the accounting profession, IFAC works in the public interest and focuses on the role of professional accountants in audit and assurance—but always, and necessarily, as partners in a larger ecosystem striving for better outcomes,” said Dancey. “We call on regulators and PAOs to collect, analyze, and publish more and better data—both aggregate and granular—on audit quality with the goal of enhancing transparency and promoting higher audit quality.”

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. 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.

What is joint audit and how is it used globally? This paper explores current research on the use of joint audit globally, and its impact on audit quality, cost and competition. 

IFAC today released the second installment of its Exploring the IESBA Code educational series: The Conceptual Framework – Step 1, Identifying Threats.

Exploring the IESBA Code is a twelve-month series providing an in-depth look at the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). Each installment focuses on a specific aspect of the Code using real-world situations in a manner that is relatable and practical. Readers will gain a better understanding of the thought process behind more complicated areas of the Code through storytelling and expert analysis from professionals involved in developing the standards.

The first installment of the Series looked at the five Fundamental Principles of ethics, which establish the standard of behavior expected of all professional accountants. Compliance with these principles enable accountants to meet their responsibility to act in the public interest. This second installment highlights key aspects of the Code’s Conceptual Framework, which is an approach that all professional accountants are required to apply to comply with the five principles. The installment focuses on identifying threats and will be supplemented by two subsequent installments that will deal with evaluating and addressing threats.

A professional accountant can often come across complex or challenging situations that are not black and white. These challenging situations require ethical considerations, some of which are expressly dealt with in the Code. The unique and informational series was developed by IFAC in collaboration with the International Ethics Standards Board for Accountants (IESBA) to help explain how the Code assists in navigating some of these challenges.

To read and download this and future installments, visit the IFAC website.

The Exploring the IESBA Code was published by IFAC and does not form part of the Code. It is non-authoritative and is not a substitute for reading the Code.

For more information about the Code, please click here.

This is the second installment of a 12-month publication series titled Exploring the IESBA Code.

This second installment highlights key aspects of the Code’s Conceptual Framework which is an approach that all professional accountants are required to apply to comply with the five principles. The installment focuses on identifying threats and will be supplemented by two subsequent installments that will deal with evaluating and addressing threats.

Today, leading accounting bodies and other organisations have called for corporate and asset owner action and improved reporting on the UN’s Sustainable Development Goals (SDG) in an attempt to hit goals set for 2030. The recommendations are detailed in the report, Sustainable Development Goals Disclosure (SDGD) Recommendations, authored by Carol Adams, Professor of Accounting, with Paul Druckman and Russell Picot, Honorary Professors at Durham University Business School.

The report has been published by global accountancy bodies -  International Federation of Accountants (IFAC), Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants of Scotland (ICAS), Chartered Accountants Australia and New Zealand (CA ANZ), the International Integrated Reporting Council (IIRC) and the World Benchmarking Alliance. It is also endorsed by the Director of SDG Impact from the United Nations Development Programme (UN-DP). 

The SDGD Recommendations offer a new approach for businesses and other organisations to address sustainable development issues aligned to the three most influential and popular reporting frameworks. They attempt to establish a best practice for corporate reporting on the SDGs and enable more effective and standardized reporting and transparency on climate change, social and other environmental impacts.

The SDGD Recommendations were developed through consultation with accounting and finance professionals, sustainability experts, academics, consultants, framework and standard setters, asset owners and managers and civil society participants. 

Responses to the consultation have been published in Sustainable Development Goals Disclosure (SDGD) Recommendations: Feedback on the consultation. They show strong support for alignment of SDGD Recommendations with other key reporting frameworks/standards (those of the Task force on Climate-related Financial Disclosures, the Global Reporting Initiative and the International <IR> Framework).  Respondents agreed that accountability for value destruction and negative impacts are critical. 

The SDGD Recommendations call on organisations to consider sustainable development risks and opportunities relevant to their long term value creation strategy and communicate the actual or potential impacts on achievement of the SDGs. This will require relevant and material disclosures about the factors that influence long term value creation (or destruction) for the organisation and society or that have an impact (positive of negative) on the achievement of the SDGs in the annual report. 

Professor Carol Adams says: “There is increasing awareness in both business and investment communities that the health and wellbeing of the planet and its people impact on the longer term success of business.  The SDGs offer an opportunity to collaborate and address this. A change in what and how business is done is essential to the achievement of the SDGs.  Key to driving change is the requirement for a statement from the Board Chair that the Board accepts responsibility for the SDG Disclosures in the annual report.”

These Recommendations are built upon a suggested five-step approach for contributing to the SDGs aligned with long-term value creation, previously developed by Professor Adams and published by the IIRC and ICAS.

Elizabeth Boggs-Davidsen, Director at the UN DP said: “To achieve the SDGs companies and investors will need to move away from mapping existing activities to the goals to a more integrated practice of directing and disclosing on investment activities that create more impact and contribute to progress towards the SDGs.”

Gerbrand Haverkamp, Executive Director at the World Benchmarking Alliance said: “Without companies aligning their business models and operations with the SDGs - they simply won’t be achieved. We therefore need to work together in translating scientific and societal expectations into clear reporting guidance for companies. This will create the data the World Benchmarking Alliance and others can use to assess and rank corporate performance in a manner that is transparent and free for everyone to see.” 

Kevin Dancey, CEO at the International Federation of Accountants (IFAC), said: "Achieving the SDGs requires dedication from business, and the urgency continues to grow. We fully support global best practices that enable effective, transparent reporting on sustainability measures. It's imperative that we act together and that we act now to secure a sustainable future.”

IFAC joins leading accounting bodies to call for corporate and asset owner action and improved reporting on the UN’s Sustainable Development Goals (SDG) in an attempt to hit goals set for 2030. The recommendations are detailed in the report, Sustainable Development Goals Disclosure (SDGD) Recommendations, authored by Carol Adams, Professor of Accounting, with Paul Druckman and Russell Picot, Honorary Professors at Durham University Business School.

Understanding the cost of audit is crucial to the ongoing global discussions about audit quality. The purpose of this analysis is to quantify audit fees as a percentage of corporate revenue in various North American and European jurisdiction from 2013 to 2018. This report breaks down audit fee data by population, jurisdiction, company size, market and industry, drawing from data provided by research firm Audit Analytics.

This week, a coalition of 11 global and regional accountancy organizations and international development agencies, led by IFAC, the International Federation of Accountants, convened a three-day conference to bring awareness to how effective public financial management is critical to the advancement of emerging economies.

The conference, Developing Accountancy Capacity in Emerging Economies, features a series of keynotes and workshops designed to equip accountants, government officials, stakeholders and other practitioners with a roadmap for facilitating conversations and driving progress in their respective jurisdictions.

“Accountancy capacity development efforts, like this conference, are most effective when national, regional, and global organizations come together with a laser-focus on a common cause. IFAC, with the support of the UK Department for International Development (DFID), is grateful to be able to catalyze the convening of institutions that comprise the financial management eco-system, in order to enhance awareness and collaboration,” said Kevin Dancey, IFAC CEO.

The accountancy profession plays an essential and significant role in a country’s sustainable economic development in both the public and private sectors. Not only has a strong and vibrant accountancy profession been regularly associated with lower levels of fraud and corruption, but there is also a recognized correlation between a strong accountancy profession and higher levels of economic growth. Supporting the development of accountancy capacity can be a catalyst to the success of the state-building strategies implemented by international development actors.

Dr. In-Ki Joo, IFAC President, said: “The role of professional accountants is to manage the financial information required by all stakeholders, and to develop the insights needed for sound decision-making that helps promote economic, social and political stability. This important connection between accountancy and economic development is something that organizations, including the DFID, the World Bank, the Asian Development Bank and the Global Fund, have understood for a number of years and we are grateful for their ongoing partnership.”

Aman Trana, Director, Procurement, Portfolio, and Financial Management Department of the Asian Development Bank, said: “One of ADB’s operational priorities under its Strategy 2030 is to strengthen governance and institutional capacity of its developing member countries. Professional accountants play a critical role in this area by supporting public financial management institutions improving their public service delivery, financial efficiency, and transparency and accountability, thereby accelerating poverty reduction and achieving sustainable development.

IFAC extends its sincere appreciation to its partners and hosts for making the conference possible: DFID, the World Bank, the Asian Development Bank, the Global Fund, the Malaysian Institute of Accountants, the Confederation of Asian and Pacific Accountants, the ASEAN Federation of Accountants, the South Asian Federation of Accountants, and the Arab Federation of Accountants and Auditors.

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. 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 the Asian Development Bank
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.

IFAC, the International Federation of Accountants, is pleased to recognize Mr. Aki Fujinuma of Japan with its Global Leadership Award for his service to the accountancy profession.

Among his many achievements, Mr. Fujinuma helped build public confidence in the accountancy profession over the past two decades. His actions, which included launching a quality-control initiative in Japan and other countries to ensure confidence in audit, significantly contributed to that effort in the region and around the world.

Mr. Fujinuma is a well-known leader both within and outside of the profession, having been recognized by the government of Japan for his leadership and contributions to the accountancy profession and Japanese society. He is a past president of IFAC (2000-2002) and played a significant role promoting IFRS adoption in the Asia-Oceania region as a former vice chair of the IFRS Foundation.

Mr. Fujinuma’s accomplishments also include serving as an IFRS Foundation trustee, a member of the Financial Accounting Standards Foundation of Japan and the International Auditing and Assurance Standards Board, and as chairman and president of the Japanese Institute of CPAs, which awarded him its Grand Prize of the Day of CPAs. He has served as an outside director of many large corporations, including the Japan Exchange Group, and as one of the Governors of Japan Exchange Regulation.

“I am honored to present the Global Leadership Award to Aki, for whom I have the deepest respect,” said Dr. In-Ki Joo, IFAC President. “At a critical time, Aki built bridges between the profession and key stakeholder groups—and he continues to do so. Aki’s efforts have resonated at difficult moments and he continues to be a powerful advocate for the accounting profession on the global stage.”

Established in 2017 by the IFAC Board, the IFAC Global Leadership Award recognizes individuals who make outstanding contributions to the global accountancy profession. The award honors the contributions of Robert Sempier, IFAC’s first executive director who greatly contributed to the development of the profession worldwide.

The Global Leadership Award was presented during IFAC’s 2019 Council meeting, held from November 13 to 14 in Vancouver, Canada.

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.