This International Good Practice Guidance provides a framework and principles-based guidance for professional accountants in business and their organizations in evaluating and improving governance. Although most organizations have a governance structure in place, it is often focused on conformance with regulations. This conformance is necessary but a governance structure should also support an organization’s efforts to improve performance. This guidance helps create a balance between performance and conformance.

Two international networks of accounting firms, IEC and JHI, have been admitted as full members of the Forum of Firms after indicating that they have met the Forum's membership standards. This includes reporting that they have implemented a globally coordinated quality assurance program, have policies and methodologies based on the International Standards on Auditing (ISAs), and have met other specific ethics requirements. Nineteen other international networks of accounting firms achieved full member status in 2008 and continue to report their adherence to the Forum's membership obligations. A list of the Forum's members is attached.

The Forum of Firms is an association of international networks of accounting firms. These firms perform a major global share of the audits of financial statements that are or may be used across national borders. The Forum's goal is to promote consistent and high quality standards of financial reporting and auditing practices worldwide. "Membership of the Forum demonstrates a network's commitment to meeting its public interest responsibilities and the highest level of quality in auditing on an international scale," emphasized David Maxwell, Chair of the Forum of Firms. "In these tumultuous economic times, such a public commitment to International Standards on Auditing and rigorous quality control standards is an active support to public confidence in the accountancy profession and in financial reporting in general."

In order to achieve full membership status, IEC and JHI had to commit to meeting the Forum's membership obligations which require members to:

• Maintain appropriate quality control standards in accordance with International Standards on Quality Control issued by the International Auditing and Assurance Standards Board (IAASB) in addition to relevant national quality control standards and conduct, to the extent not prohibited by national regulation, regular globally coordinated internal quality assurance reviews;
• Have policies and methodologies for the conduct of transnational audits that are based, to the extent practicable, on ISAs issued by the IAASB; and
• Have policies and methodologies which conform to the IFAC Code of Ethics for Professional Accountants and national codes of ethics.

For additional details on the Forum of Firms, please visit: https://www.ifac.org/Forum_of_Firms/.

The unexpected severity, speed and consequences of the credit crisis present unique challenges for management and auditors in meeting their responsibilities in assessing an entity’s ability to continue as a going concern. To help auditors and management, as well as those charged with governance, in addressing those challenges, the staff of the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), has released a new practice alert entitled Audit Considerations in Respect of Going Concern in the Current Economic Environment. The alert was developed following consultation with the IAASB and a review of similar guidance issued by national standard setters.

Management, those charged with governance and auditors alike must consider the effect of the credit crisis and economic downturn on an entity’s ability to continue as a going concern and whether these effects ought to be described in the financial statements. The alert highlights areas within International Standard on Auditing (ISA) 570, Going Concern, as well as other ISAs, that are particularly relevant in the current economic environment and provides additional guidance for auditors in evaluating management’s use of the going concern assumption. It also raises awareness of issues surrounding liquidity and credit risk that may create new uncertainties for entities or exacerbate those already existing.

James Sylph, Executive Director, Professional Standards, emphasizes, “While the alert notes that auditors are always required to evaluate management’s use of the going concern assumption, given current economic conditions, the evaluation will take on even more importance and is likely to be more complex. This is particularly the case with regard to the availability of credit and the impact of the current economic environment on budgets and forecasts, factors which are likely to result in additional disclosures in the current period’s financial statements. As such, we believe this alert will be useful for auditors as well as management of entities of all sizes in the current audit season.”

This new alert is the second alert issued by staff of the IAASB. The first, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment, was issued in October 2008 to assist auditors in addressing the challenges of auditing fair value accounting estimates, and highlights areas within the ISAs that are particularly relevant in the audit of fair value accounting estimates in times of market uncertainty. Both alerts may be downloaded free of charge from the IFAC website (www.ifac.org). For more information on IFAC initiatives with regard to the global financial crisis, please visit https://www.ifac.org/financial-crisis/.

About the IAASB and IFAC
The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB 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 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), moves closer to completion of its Clarity Project* today with the release of seven clarified International Standards on Auditing (ISAs) and one clarified International Standard on Quality Control (ISQC), following the consideration and approval by the Public Interest Oversight Board (PIOB) of the due process. To date, the IAASB has released 29 final redrafted ISAs and one final redrafted ISQC in the new clarity style.

Titles of the newly issued standards are as follows:

• International Standard on Quality Control (ISQC) 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements
• ISA 220 (Redrafted), Quality Control for an Audit of Financial Statements
• ISA 500 (Redrafted), Audit Evidence
• ISA 501 (Redrafted), Audit Evidence-Specific Considerations for Selected Items
• ISA 505 (Revised and Redrafted), External Confirmations
• ISA 520 (Redrafted), Analytical Procedures
• ISA 620 (Redrafted), Using the Work of an Auditor's Expert
• ISA 710 (Redrafted), Comparative Information-Corresponding Figures and Comparative Financial Statements

The PIOB has also considered and approved the due process of four additional ISAs that were approved by the IAASB at its September 2008 meeting. However, in finalizing ISA 210 (Redrafted), Agreeing the Terms of Audit Engagements, at its meeting last week, the IAASB approved conforming amendments to the following four reporting standards:

• ISA 700 (Redrafted), Forming an Opinion and Reporting on Financial Statements;
• ISA 800 (Revised and Redrafted), Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks;
• ISA 805 (Revised and Redrafted), Special Considerations-Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
• ISA 810 (Revised and Redrafted), Engagements to Report on Summary Financial Statements.

The IAASB agreed that these four ISAs will be issued only after the PIOB has considered and approved the due process applied to ISA 210 (Redrafted), which is expected in February 2009.  The IAASB recognizes that the four reporting standards present fewer implementation challenges than other ISAs, and so the interest in issuing a final text including conforming changes outweighs the desire to make them immediately available.

IAASB Chair John Kellas commented on the IAASB's progress: "The approval of the twelve standards now cleared by the PIOB made the IAASB's September meeting one of its most productive.  It also kept us firmly on our timetable for completion of the Clarity Project by the end of 2008. By issuing eight of these standards today we are fulfilling our commitment to make the standards available as soon as practicable. As noted in the Clarity Project Update, early attention given to implementation of the clarified ISAs is of the utmost importance."

In addition to ISA 210 (Redrafted), at its meeting last week the IAASB approved new ISA 265, Communicating Deficiencies to Those Charged with Governance and Management, and ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Service Organization. Subject to PIOB approval, these ISAs will be released in March 2009. The IAASB has also agreed to changes in the approved clarified ISAs as a result of a review for consistency and other matters of clarity; they will be made available on the IAASB's website in early 2009.

The IAASB considers that, with its approval of the final three ISAs (subject to PIOB approval) and its review of consistency, its work in redrafting its international standards under the Clarity Project is now complete.

The complete set of clarified ISAs will be effective for audits of financial statements for periods beginning on or after December 15, 2009. The ISAs can be downloaded free-of-charge from the IFAC online bookstore. The IAASB also plans to publish the set of clarified ISAs in a handbook, expected to be released in April 2009.

About the IAASB and IFAC
The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB and, as one element of that oversight, establishes its due process and working procedures.

IFAC (www.ifac.org) 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 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.
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* Key elements of the Clarity Project drafting conventions include: establishing an objective for the auditor with respect to the subject matter of each standard; clearly distinguishing requirements from guidance on their application; avoiding ambiguity through eliminating the present tense to describe actions by the auditor and using more imperative language where a requirement was intended; and other structural and drafting improvements to enhance the overall readability and understandability of the standards.

A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.

In the immediate post Sarbanes-Oxley period, IFAC and the international regulatory community took initiatives to strengthen the international auditing standard-setting process in line with these principles. Among the most important actions was the establishment of the Public Interest Oversight Board (PIOB) to provide independent public interest oversight of the key elements of the standard-setting structure and process. The PIOB, formed in 2005, oversees the International Auditing and Assurance Standards Board (IAASB), the International Accounting Education Standards Board, the International Ethics Standards Board for Accountants, as well as the IFAC Member Body Compliance Program.

"A system of shared responsibility for standard setting draws on the strengths of the profession and of the regulators. Each group brings different skills, experiences and authority to the standard-setting process," states IFAC Chief Executive Officer Ian Ball.  "The PIOB, for example, provides assurance that the standard-setting process is operating independently and in the public interest."

In addition to the establishment of the PIOB, other significant elements of the standard-setting process include a highly transparent due process, a strong role for Consultative Advisory Groups that provide technical input from the perspective of external stakeholders, including regulators, and a composition of the standard-setting boards that has an appropriate balance of "practitioner" and "non-practitioner" members.

Speaking about the system as a whole, Mr. Ball emphasizes, "The ultimate test of any system is that it works well, in this case meaning it produces high quality standards that operate in the public interest. The level of adoption and endorsement of the standards - also outlined in the paper - suggest that this test is being met."

 "IFAC and the regulators share a common goal: we want effective standard-setting processes," points out new IFAC President Robert Bunting. "To be effective they must operate in the public interest, they must be balanced, not resulting in excessive compliance costs for any group, and they must contribute to building public confidence in financial reporting. These criteria are ageless, but they are worth re-emphasizing in times of global crisis like these."

International Standard Setting in the Public Interest may be downloaded from the IFAC website by going to https://www.ifac.org/Store/. 

IFAC (https://www.ifac.org/) 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 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) is recognizing World Accountancy Week -- December 7-13, 2008 -- by launching an initiative to reach out to more professional accountants in business. The committee is inviting their participation in selecting the winner of its 2008 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have been published by IFAC's 158 member bodies and associates.  This is the first time that individual accountants worldwide have been invited to be part of the selection process.

"IFAC is dedicated to making its materials more useful and relevant to professional accountants in business," states Ian Ball, IFAC chief executive officer. "The best way to do that is to involve them more directly in our work." 

Ten articles focused on leading-edge issues that PAIBs are addressing today have been selected by the PAIB Committee for global distribution and have been nominated for the top Article of Merit Award. Professional accountants in business are invited to rate their usefulness.  This input will be used to select the winning article.

The ten articles may be viewed by going to https://web.ifac.org/PAIB/articles-of-merit-2008. They focus on the following topics, among others:

• Outsourcing the finance and accounting function;
• Measuring board performance;
• Analyzing mergers and acquisitions;
• Managing strategic risk;
• Planning multi-year strategies; and
• Achieving employee alignment and motivation.

Individuals are requested to review and rate these articles by January 11, 2009. The winning article will be announced in early 2009.

About IFAC
IFAC is the worldwide 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 currently comprised of 158 professional accountancy bodies in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

To mark the beginning of World Accountancy Week, the International Federation of Accountants (IFAC) has released the results of its 2008 Global Leadership Survey. This year's survey sought the views of leaders of accountancy institutes worldwide on the current credit crisis and other top issues for the profession. Chief executives and presidents of 110 accountancy organizations* worldwide responded to the survey. The majority of these organizations have been actively engaged, like IFAC, in identifying and executing appropriate responses to the crisis, supporting their members in understanding applicable international standards, and working with regulators, business groups and others to find solutions. Many of these initiatives are featured on IFAC's website in its new page on the global financial crisis (https://www.ifac.org/financial-crisis/).

"According to survey respondents, the credit crisis is resulting in increased awareness of the value of professional accountants and the services they provide," says IFAC Chief Executive Ian Ball. "It is now up to the profession to continue to meet the expectations of those that depend on our work and to contribute to rebuilding confidence in financial markets."

Leaders of accountancy organizations reported an increased trend in the need for services that are related in some way to the crisis. For example, in the coming year they expect their members in public practice to be more involved in corporate recovery and insolvency services, assurance services (other than audit), as well as risk and compliance related work. Members employed in business and industry are also expected to be more involved in risk management, as well as in the areas of corporate social responsibility and sustainability, internal control, and governance and compliance work.

Respondents believe that the most important issues for the accountancy profession in the coming year are:

• Addressing the needs of small and medium enterprises (SMEs) and small and medium practices (SMPs);
• Meeting expectations to identify and prevent fraud;
• Dealing with the changing regulatory landscape; and
• Transitioning to International Standards on Auditing.

They also believe it is increasingly important to address the transition to International Financial Reporting Standards, auditor liability issues, the use of new technologies like XBRL, and corporate social responsibility issues.

Recently-appointed IFAC President Robert Bunting has indicated that addressing the needs of SMPs and SMEs will be a priority for IFAC over the next two years.

"The survey confirms that meeting the needs of SMPs and SMEs is a global concern and a global goal. These entities are among those likely to suffer significantly from the current financial crisis yet they are among the least at fault. We must look for ways to mitigate the effect of the crisis on SMPs and SMEs," emphasizes Mr. Bunting.

Other survey results point to an increase in the attractiveness of the profession to students. According to survey respondents, the factors positively influencing students are the career options available and earning potential. However, leaders of accountancy institutes indicated that the two factors having the most negative impact on the attractiveness of the profession are work/life balance and legal liability. Most respondents indicated that they have initiatives in place to address these issues.

During World Accountancy Week, December 7, 2008 to December 13, 2008, accountancy institutes will be communicating the benefits of pursuing a career in accountancy and the role of professional accountants in contributing to economic growth and development.

IFAC is the worldwide 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 currently comprised of 158 professional accountancy bodies in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors - List of IFAC 2008 Global Leadership Survey Participants

Accountancy Institutes

Regional Accounting Organizations and Groupings

Eastern Central and Southern African Federation of Accountants
Interamerican Accounting Association
Confederation of Asian and Pacific Accountants
Eurasian Council of Certified Accountants and Auditors
The Institute of Chartered Accountants of the Caribbean
The Association of Accountancy Bodies in West Africa

This IAASB Staff Audit Practice Alert assists auditors by highlighting areas within the ISAs that are particularly relevant in the audit of fair value accounting estimates1 in times of market uncertainty.

It is an enormous pleasure and privilege for me to be able to share time with you this morning in order to discuss convergence with international standards on auditing.  President CA Ved Jain, may I start these remarks by thanking you most sincerely for the opportunity to share time with you, with your Vice President, CA Uttam Prakash Agarwal, with your fellow guests and with your members: fellow chartered accountants of the Institute of Chartered Accountants of India. 

May I also take this opportunity to congratulate you on your election as a member of the Board of the International Federation of Accountants, which became effective last week on 13 November 2008.  Our global profession has been illuminated by the contribution of the Institute of Chartered Accountants of India and its many excellent nominees to IFAC boards and committees; it will be even more brightly illuminated by your presence at its Board meetings.  Under your leadership, the Institute of Chartered Accountants of India is the largest professional body of Chartered Accountants in the World, with a strong tradition of service to the public interest and to the Indian economy.  Members of your Institute are increasingly working overseas, to the benefit of the economies of the countries in which they work. 

I am particularly delighted at the MOU signed yesterday between the Institute of Chartered Accountants of India and my own professional body of the Institute of Chartered Accountants in England and Wales.  This foreshadows a time of great development of our wonderful profession in India and the UK and of even more outstanding service to our two great nations.  May I congratulate you on your outstanding leadership of the Institute of Chartered Accountants of India, which will shine throughout the years ahead as a major milestone in the development of the Indian profession and the Indian economy. 

One of the epithets applied to the Institute of Chartered Accountants of India is "partners in nation building."  To me, this is an excellent characterisation of the contribution of our profession of accountancy to the world.  Our profession is concerned with adding value to economies, in particular in creating an investment climate of trust.  An investment climate of trust is key to raising capital on the national and international markets.  It is key to the provision of energy, water, education, healthcare, food, and employment.  Indeed, it is key to the fight against poverty-a fight which is so important to us all.

High standards of auditing are an essential component of an investment climate of trust, and it is my firm belief that trust will be higher if all nations adopt and implement International Standards on Auditing as the standards to be followed by auditors in their own country.  I am most encouraged by the progress which has been made in India towards the adoption of International Standards on Auditing and would strongly encourage you to complete this process at the very earliest opportunity.  Indeed, I am delighted to have been told that this is your firm intention.

This information paper contains the results of a survey conducted by the Professional Accountants in Business Committee (PAIB) in the spring of 2008, designed to identify similarities and differences in performance measurement structures in public sector entities and to assess the extent to which these structures help meet their objectives.