The International Auditing and Assurance Standards Board (IAASB) today released for public comment proposed International Standard on Auditing (ISA) 720 (Revised), The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon.

The proposed standard clarifies and enhances the scope and focus of auditor efforts on “other information”–that is, information included in documents containing or accompanying the entity’s audited financial statements. The proposals recognize that significant changes in financial reporting have occurred over the last two decades regarding the information issued in connection with an entity’s financial statements and the manner in which it is shared with users.

“Today, pertinent disclosures are made not only within financial statements, but also outside of them. As preparers endeavor to better communicate with stakeholders, these disclosures are being disseminated through a diverse range of documents as other information that accompanies audited financial statements. Users are attaching greater importance to this information, particularly when it is more qualitative in nature,” notes Prof. Arnold Schilder, IAASB Chairman. “The public interest question is: Is this auditing standard as up-to-date as it needs to be, and does it do enough to ensure that auditors review this other information in the context of their understanding of the audited entity? Our proposals for an enhanced ISA 720 seek to evolve the requirements so that they remain relevant and sufficient in today’s financial reporting environment.”

Under the proposed standard, the auditor is required to read and consider the other information in light of the understanding of the entity and its environment the auditor has acquired during the course of the audit, and to respond appropriately when the auditor identifies a potential material inconsistency in the other information or a material misstatement in the audited financial statements. The proposed ISA 720 expands the documents considered as “other information,” and clarifies and enhances the nature of the auditor’s responsibilities with respect to reading and considering other information. In addition, it includes guidance to assist auditors in determining the nature and extent of their work in considering the other information.

Proposed ISA 720 (Revised) also introduces reporting obligations to explain in the auditor’s report the nature of the auditor's responsibilities relating to the other information and the findings from the auditor's work, to enhance transparency. The proposals do not extend the scope of the auditor’s opinion on the financial statements to cover the other information.

How to Comment
The IAASB invites all stakeholders to comment on its proposals. To access the Exposure Draft or submit a comment, visit the IAASB’s website at www.iaasb.org. Comments on the exposure draft are requested by March 14, 2013.

About the IAASB
The IAASB 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).

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC) today presented its International Gold Service Award to Professor Mervyn King. IFAC President Göran Tidström presented the prestigious award, which recognizes outstanding contributions to the accountancy profession, during IFAC’s annual Council Meeting.

In his remarks, Mr. Tidström highlighted Mervyn King’s substantial contributions to corporate governance and integrated reporting. In particular, in his role as chair of the King Committee on Corporate Governance in South Africa, Mr. King has demonstrated extraordinary foresight and dedication, pioneering the drafting of the international benchmark for corporate governance guidelines known as King I (now King III), which have been lauded for their inclusive and integrated approach. King now presides at the center of the integrated reporting movement, chairing the International Integrated Reporting Council (IIRC), which has been charged with drafting an internationally accepted integrated reporting framework. Prior to the IIRC’s formation, King led the accelerated development of such a framework for South Africa, when the country, in 2010, became one of the first in the world to require publicly listed companies to produce integrated reports. 

“It is my privilege to present the IFAC International Gold Service Award to Mervyn King here in his home country, where his work in corporate governance and integrated reporting has made South Africa a role model for the rest of the world,” said Göran Tidström. “His leadership and achievements have set the bar higher, challenging the profession worldwide to grow and evolve. His contributions have forever changed the way businesses measure and report on their performance, for the betterment of the accountancy profession, the global business community, and society as a whole.”

King’s illustrious and varied career also includes his work as an attorney, arbitrator, mediator, and advisor. He served as a judge in the Supreme Court of South Africa for two years and as the South African judge at the International Chamber of Commerce International Court of Arbitration in Paris for nine years. He has received numerous academic accolades, including being named Professor Extraordinaire at the University of South Africa in the College of Economic and Management Sciences. He holds an honorary doctor of laws from the University of the Witwatersrand, in addition to numerous honorary appointments and other awards.

About the IFAC International Gold Service Award
The IFAC International Gold Service Award was created by the IFAC Council in 2010 to recognize outstanding individual contributions to the accountancy profession. 

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 127 countries and jurisdictions, along with the World Bank, the Inter-American Development Bank, and the Global Public Policy Committee recently concluded the sixth annual Conference for Accounting and Accountability for Regional Economic Growth, or CReCER (Contabilidad y Responsabilidad para el Crecimiento Económico Regional) in Managua, Nicaragua with the support of the Inter-American Accounting Association, an IFAC recognized regional organization. The 2012 CReCER events were hosted and executed by the Colegio de Contadores Públicos de Nicaragua (CCPN), an IFAC member body.

This year’s three-day conference centered on providing quality financial information, which in turn supports economic development, and featured high-level global representatives and leaders in the accountancy profession. Attendance at the conference was high—more than 600 attendees and 80 speakers, including representatives from more than 30 countries from the region and world, participated.

“The discussions and debates that take place at CReCER each year drive strategic objectives and collaborative initiatives for the coming year,” said IFAC Deputy President Warren Allen, who spoke during multiple sessions at CReCER. “This opportunity to discuss how to advance the profession and ensure high-quality financial information in Latin America and the Caribbean is critical and extremely productive.”

The conference received a great deal of support and involvement from the Nicaraguan government. The Minister of Finance and Public Credit, Iván Acosta Montalván, and Dr. Paul Oquist, Minister, Private Secretariat of National Policy, both spoke during two sessions, highlighting the important developments and progress of the Nicaraguan economy and citing the crucial role of high-quality financial information to sustaining future growth. Comandante Bayardo Arce, Economic Advisor to the President of the Republic of Nicaragua, spoke at the closing plenary session, congratulating the CCPN and global partners of the CReCER initiative for holding such a relevant event in Nicaragua. He highlighted the importance of the accounting profession to increasing the transparency and auditability of public finances.

The conference included sessions on implementation of international accounting and auditing standards, integrated reporting, quality assurance and fraud. Additionally, many meetings were held in conjunction with CReCER, including regional standard setters meetings with Arnold Schilder, chairman of the International Auditing and Assurance Standards Board, and Andreas Bergmann, chair of the International Public Sector Accounting Standards Board, and a gathering of the presidents of regional professional accountancy organizations.

Presentations from the conference will be available on the IFAC website soon.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Public Sector Accounting Standards Board (IPSASB) today released for comment two Exposure Drafts related to its project to develop a Conceptual Framework for the general purpose financial reporting of public sector entities. The Conceptual Framework continues to be the IPSASB’s key strategic objective and is of fundamental importance to the future of global public sector standard setting.

Conceptual Framework Exposure Draft (ED) 2, Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Elements and Recognition in Financial Statements, refines the issues highlighted in the Consultation Paper published in 2010 and reflects the IPSASB’s consideration of the responses to that Consultation Paper. Elements are the building blocks from which the financial statements are constructed.

The ED proposes definitions of eight elements: assets, liabilities, revenue, expenses, deferred inflows, deferred outflows, ownership contributions, and ownership distributions. It also proposes deferred inflows and deferred outflows as elements in order to distinguish the flows related to the reporting period from flows which relate to another reporting period. Deferred inflows and deferred outflows apply to flows that are provided for use in one or more specified reporting periods and are restricted to non-exchange transactions. The ED also considers how to deal with the uncertainty that can arise over the existence and measurement of elements.

Conceptual Framework Exposure Draft (ED) 3, Measurement of Assets and Liabilities in Financial Statements, identifies the measurement concepts that should guide the IPSASB in the selection of measurement bases for International Public Sector Accounting Standards. The ED stresses the importance of selecting measurement bases that meet the objectives of financial reporting-decision making and accountability. Many assets in the public sector are held for their operational capacity and, therefore, entry values that reflect the cost of purchase are likely to be adopted in many situations.

For liabilities that arise from obligations to provide goods and services to citizens and other eligible beneficiaries, the appropriate measurement basis will often be the cost of fulfillment—that is to say, the current cost of meeting the obligations represented by the liability.

“The Conceptual Framework continues to be IPSASB’s main priority and, when finalized, will underpin IPSASB’s standard-setting activities for many years to come,” said IPSASB Chair Andreas Bergmann. “These two Exposure Drafts propose concepts that deal with key aspects of the financial statements—the elements and the appropriate measurement bases. We strongly encourage all stakeholders to submit comments on the two Exposure Drafts.”

How to Comment
To access the Exposure Drafts and the At-a-Glance documents, which provide summaries of the two Exposure Drafts, or to submit a comment, visit the IPSASB website. Comments on the Exposure Drafts are requested by April 30, 2013. The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of these documents to their members and employees.

About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC. The IPSASB receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the United Nations, and the governments of Canada, China, New Zealand, and Switzerland.

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. It is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The staff of the International Ethics Standards Board for Accountants (IESBA) today released additional questions and answers (Q&As) to support the adoption and implementation of the IESBA’s Code of Ethics for Professional Accountants (the Code). The new Q&As cover issues related to materiality, partner rotation, public interest entities, and network firms, among several other topic areas.

To aid consistent application of the Code, the IESBA monitors the adoption and implementation of the Code to identify areas where support is needed. These Q&As respond to the needs identified.

The 141 member organizations of the International Federation of Accountants (IFAC), the global organization for the accountancy profession, are required to apply ethical standards at least as stringent as those stated in the Code. (IFAC associates are progressing toward this status.) In addition, under their membership obligations, members of the Forum of Firms, an association of international networks of accounting firms, agree to have policies and methodologies for transnational audits which conform to the Code.

“This publication reinforces the IESBA’s public interest mandate to support the global adoption and implementation of the Code. Globally adopted, high-quality ethics standards, including independence requirements, are vital to promoting sustainable, efficient capital markets,” said IESBA Chair Jörgen Holmquist. “Inconsistent application of the Code could undermine not only our efforts to promote global adoption but also the credibility of the Code itself,” he added. “So promoting consistent implementation is of critical importance.”

The new publication builds on a previous set of Q&As released in 2010 that includes support on the application of the conceptual framework approach, taxation services, related entities, and the definition of key audit partner, among a number of other topics. 

About the IESBA
The IESBA is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC), the global organization for the accountancy profession, today released for comment the Professional Accountants in Business Strategy and Work Plan for 2013-2016.

Since more than half of all professional accountants in the world work in business and the public and not-for-profit sectors, addressing their needs is of great importance to IFAC and the international accountancy organizations that comprise IFAC’s membership.

The strategy and specific initiatives aim to improve recognition of the diverse roles professional accountants in business perform and how they need to be positioned to drive successful and sustainable organizations. Professional accountants in business can be found working as employees or advisors, often at senior levels such as chief financial officer or controller. They have the collective power to significantly influence their organizations in implementing effective governance and an ethical culture supported by integrated risk management and internal control, sustainable leadership, and effective reporting and performance management.

“The Strategy and Work Plan for 2013–2016 sets out a vision to achieve global recognition of the contribution of professional accountants in business as partners in facilitating sustainable organizational success,” said Roger Tabor, chair of the Professional Accountants in Business (PAIB) Committee, which is tasked with carrying out the strategy and initiatives. “The key theme supporting this vision is that professional accountants in business should facilitate integrated governance, thinking, and management, as well as reporting, in organizations. These are the critical areas that organizations are grappling with and require the accountancy profession to raise awareness of their contribution and ensure that their competency matches the needs and expectations of their employing organizations.”

The proposed Strategy and Work Plan for 2013-2016 includes specifics for planned projects and initiatives. IFAC member organizations and other stakeholders are invited to provide feedback on the proposals.

How to Comment
IFAC and the PAIB Committee invite all stakeholders to comment. To access the Exposure Draft and submit a comment, visit the PAIB Committee section of the IFAC website. Comments on the Exposure Draft are requested by January 31, 2013. You must register on the IFAC website to submit a comment.

About the PAIB Committee
The PAIB Committee serves IFAC member bodies and professional accountants worldwide who work in commerce, industry, financial services, education, and the public and the not-for-profit sectors. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

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. It is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has issued Integrating Governance for Sustainable Success, which uses case studies to analyze how professional accountants in business support the performance of their organizations by integrating governance into the key drivers of sustainable organizational success.

“Governance is still too often seen primarily as a compliance exercise rather than a means for driving the sustainable performance of an organization,” said Roger Tabor, chair of the PAIB Committee. “Successful organizations have a governance structure and culture that go beyond conformance with regulations and support the organization’s efforts to improve performance. Governance should be part of the DNA of an organization.”

The new report illustrates that good governance is about more than the basic protection of stakeholders’ interests or compliance designed to satisfy regulatory requirements. Rather, integrating good governance throughout an organization offers powerful support to the way sustainable value is created. The report addresses how professional accountants support their organizations to build good governance into the entire cycle of strategic planning, resource utilization, value creation, accountability, and assurance. Such a holistic approach ensures that governance is integrated into all aspects of an organization.

“Professional accountants are typically in a position of strategic or functional leadership or are otherwise well placed to partner with colleagues in evaluating and improving governance,” said John Cahill, chair of the PAIB Committee’s Governance and Ethics Task Force. “This report usefully demonstrates how they can increase their organizations’ sustainable performance.”

About the PAIB Committee
The PAIB Committee serves IFAC member bodies and professional accountants worldwide who work in commerce, industry, financial services, education, and the public and the not-for-profit sectors. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC) and the International Valuation Standards Council (IVSC) have renewed their Memorandum of Understanding (MoU), first signed in 2009.

The MoU creates a cooperation process to enable valuers and auditors to obtain a better mutual understanding of standards relevant to financial statements, and will help both organizations pursue their objective of maintaining confidence in business reporting in both the public and private sectors. Actions under the MoU are also designed to promote the credibility and acceptability of valuations prepared in accordance with the International Valuation Standards.

The MoU reflects the IVSC’s and IFAC’s shared conviction that the transparency provided by high-quality international standards contributes significantly to the effective functioning of capital markets and economic growth.  The MoU acknowledges the ongoing working relationships between the IVSC, IFAC, and the International Auditing and Assurance Standards Board (IAASB), which is supported by IFAC. The MoU also anticipates closer working relationships between IVSC and other IFAC activity groups.

Roel Campos, Interim Chairman of the Board of Trustees for the IVSC, states, “This agreement to renew the earlier Memorandum of Understanding represents an ongoing commitment by both IVSC and IFAC to strengthen cooperation between the two organizations. It demonstrates the cohesive and united approach of the IVSC, IFAC, and its independent standard-setting boards to maintaining standards as global markets continue to develop.”

“The ongoing financial crisis has shown the importance of transparency in financial reporting by both private and public sector entities,” said Göran Tidström, president of IFAC.  “The IVSC has served as a member of the IAASB’s Consultative Advisory Group, and the organizations are both members of the Private Sector Task Force (PSTF). This agreement strengthens the already close ties between the IVSC and IFAC and will serve as a platform for further cooperation.”

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. It is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the IVSC
The IVSC is an independent, not-for-profit, private sector organization. As the established international standard setter for valuation, the IVSC develops and maintains standards for the reporting and disclosure of valuations, especially those that will be relied upon by investors and other third party stakeholders. It also supports the need to develop a framework of guidance on best practice for valuations of the various classes of assets and liabilities and for the consistent delivery of the standards by properly trained professionals around the globe.

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Two new signatories were welcomed to MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) this week at the second Steering Committee Meeting held in London, UK, hosted by the Chartered Institute for Public Finance and Accountancy (CIPFA).

The Australian Agency for International Development (AusAID) and Global Fund to Fight AIDS, Tuberculosis, and Malaria have agreed to become a part of this groundbreaking initiative working to strengthen professional accountancy organizations (PAOs), improve financial reporting, management, and auditing in both the public and private sectors, and positively impact economic growth and poverty reduction around the world.

The second meeting of the MOSAIC Steering Committee offered an opportunity for presentation and discussion of the draft PAO Global Development Report. Co-financed by the African Development Bank, the Asian Development Bank, the Inter-American Development Bank, and the World Bank, this report provides MOSAIC signatories and observers with a global view of PAO development; insight into the key trends, challenges, and success factors facing their progress; and a shared starting point to guide future MOSAIC activities. Agenda topics also included potential initial activities for MOSAIC support and coordination and establishment of a permanent MOSAIC Secretariat.

“As MOSAIC grows in strength and number, we are able to see how and where the international development agenda can support PAOs in developing and emerging economies, which, in turn, provides an essential platform for sound financial reporting and economic growth,” said Deborah Williams, co-chair of the MOSAIC Steering Committee and chair of the IFAC PAO Development Committee.

“MOSAIC seeks to support the development of the entirety of the accountancy profession—in both the public and private sectors at the professional accountant and accounting technician levels,” said Tony Hegarty, co-chair of the MOSAIC Steering Committee and chief financial management officer at the World Bank.

MOSAIC was launched in November 2011 by IFAC and 10 signatories from the donor community to increase coordination and provide the foundation for increasing capacity of PAOs.

About MOSAIC
MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) sets out the basis for improving cooperation and collaboration between IFAC, international donors, and the international development community. It provides the foundation for increasing the capacity of professional accountancy organizations and improving the quality of financial management systems in emerging economies. IFAC, the global organization for the accountancy profession, serves as the Interim Secretariat for MOSAIC.

La Federación Internacional de Contadores (IFAC) y sus organismos miembros Instituto de Censores Jurados de Cuentas de España, Federación Argentina de Consejos Profesionales de Ciencias Económicas e Instituto Mexicano de Contadores Públicos acordaron formalmente establecer un marco de cooperación iberoamericana con el objeto de lograr procesos sostenibles a más largo plazo para la realización de una traducción única al español de las normas internacionales y otras publicaciones de la IFAC.

El acuerdo se celebró mediante una ceremonia formal de firmas de la que participó la Asociación Interamericana de Contabilidad, que representa la organización regional de la IFAC para América Latina y el Caribe.

“Si se tiene en cuenta la importancia del idioma español en cuanto a la adopción e implementación de las normas internacionales a nivel global, el establecimiento formal de este acuerdo de cooperación constituye un acontecimiento de suma relevancia”, expresó el Director General de la IFAC, Ian Ball. “A través del trabajo en conjunto, debemos ser capaces de lograr mucho más de lo que cualquiera de nuestras organizaciones podría hacer por sí sola. Consideramos que este proyecto redundará en beneficios para toda la profesión contable y de auditoría, y agradecemos enormemente las valiosas contribuciones de nuestros organismos miembros y nuestra organización regional al respecto”.

A principios de este año, la IFAC celebró la realización de una traducción única al español del Manual de Normas Internacionales de Auditoría y Control de Calidad publicado por el Consejo de Normas Internacionales de Auditoría y Aseguramiento, y del Código de Ética para Profesionales de la Contabilidad, publicado por el Consejo de Normas Internacionales de Ética para Contadores. Estas dos publicaciones traducidas fueron el resultado de un esfuerzo en conjunto de los grupos mencionados anteriormente, en colaboración con otros organismos miembros de habla hispana de la IFAC y otros interesados clave.

Para obtener más información sobre el idioma español u otras traducciones, visite la Base de datos de traducciones de la IFAC.

Acerca de la IFAC
La IFAC es la organización mundial para la profesión contable que se dedica a servir el interés público mediante el fortalecimiento de la profesión y la contribución al desarrollo de economías internacionales fuertes. La IFAC está compuesta por 167 miembros y asociados de 127 países y jurisdicciones, que representan a aproximadamente 2,5 millones de contadores en la práctica pública y en sectores como la educación, el Gobierno, la industria y el comercio.

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