The International Public Sector Accounting Standards Board (IPSASB) today released for comment a consultation paper as part of its project to develop a conceptual framework for the general purpose financial reporting of public sector entities. The Conceptual Framework is the IPSASB’s key strategic objective from 2010 through 2012, and is of fundamental importance to the future of global public sector standard setting for at least the next 10 to 15 years.

The Consultation Paper, “Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Presentation in General Purpose Financial Reports” (CF-CP4), explores concepts applicable to the presentation of information in the general purpose financial reports of public sector entities. It is not limited to the financial statements.

The Consultation Paper describes what is meant by presentation of information, and explains that presentation covers both display and disclosure. It reviews an approach to presentation of information that involves: presentation objectives based on user needs; application of the qualitative characteristics to presentation decisions; and three presentation concepts. The three presentation concepts are: select information that meets user needs, satisfies the cost-benefit test, and is sufficiently timely; locate information in a way that meets user needs; and, organize information to make important relationships clear and to support comparability.

“The Conceptual Framework provides the set of principles that underpin the IPSASB’s standard-setting activities over the long-term,” explained IPSASB Chair Andreas Bergmann. “CF-CP4 breaks new ground by considering presentation from the broader perspective of financial reporting rather than adopting a narrow focus just on the financial statements. Given the central role that the Conceptual Framework will play in the IPSASB’s future standard-setting activities, I strongly urge all stakeholders to submit comments on this Consultation Paper."

How to Comment
To access the Consultation Paper and the At-A-Glance document, which provides a summary of the Consultation Paper, or to submit a comment, please visit the IPSASB website at www.ipsasb.org. Comments on the Consultation Paper are requested by May 31, 2012. The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this consultation paper 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. 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, has opened nominations for the 2012 IFAC International Gold Service Award.

The IFAC International Gold Service Award was established in 2010 to recognize outstanding individual contributions to the accountancy profession, including protecting the public interest; exemplifying professional conduct and ethics; exceptional quality of work; and/or, contributions to a particular project or initiative. Candidates may or may not be members of the accountancy profession, and contributions may or may not be made through IFAC.

The recipients of the IFAC International Gold Service Award in 2011 were Sir David Tweedie (United Kingdom) and Professor Stephen Zeff (United States).The awards were presented on November 16, 2011, at IFAC’s annual Council Meeting in Berlin, Germany, by Göran Tidström, president of IFAC.

Nominations from IFAC member bodies must be submitted to the chief executive officer of IFAC by March 15, 2012. The nomination should consist of a completed nomination form, available on the IFAC website, and a cover letter. The cover letter should include reasons why the member body believes that the individual should receive an award and must be signed by the president and/or chief executive, or their equivalents, of the member body. If a member body wishes to include other supporting material, it should not exceed two pages. Nominations received in a format other than the stipulated form will not be considered.

In addition to nominations from IFAC member bodies, IFAC’s Nominating Committee will identify and recommend candidate(s) for this award. The Nominating Committee will review the nominations, make the necessary inquiries, and recommend candidate(s), if appropriate, to the IFAC Board, which will make the final selection(s), if any, during its meeting in June 2012. The chief executive officer of IFAC will notify the selected candidate(s) in writing, and the president of IFAC will present the award(s) at the annual IFAC Council Meeting, to be held November 14-15, 2012.

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, has issued an announcement to alert its members, Forum of Firms, other international organizations and the general public of its Call for Nominations for IFAC Boards and Committees in 2013 .

For the first time, all vacancies on the public interest activity standard-setting boards* are open for nominations by the public. This change is due to IFAC’s determination to ensure a transparent approach to filling available positions, while also achieving gender, regional, and professional balance, and is in response to the Monitoring Group’s 2010 effectiveness review of the IFAC Reforms.

“The caliber of the volunteer members on our boards and committees is what makes these groups so effective. That is why seeking high-quality nominations is at the core of our nominations processes,” said IFAC President Göran Tidström. “We aim to attract a wide variety of high-quality nominations, to ensure that we have a rich pool from which to find the right candidate for each position. We thank our member bodies and the public in advance for the thoughtful and valuable nominations we anticipate receiving this year.”

Both the Call for Nominations and its companion guide, Developing a Nominations Strategy, are designed to help IFAC stakeholders identify the most qualified person for nomination to each available position on the boards and committees. These in-depth documents, located on the IFAC website, contain strategic and practical advice for nominating organizations and other individuals that allows them to make more informed decisions in their selections and decisions, and to understand the requirements of the various positions.

Each year, approximately one-third of the 155 positions on the boards and committees have openings, though, for some of those positions, serving members may be reappointed. In addition, this year, the position of the IFAC Deputy President is open for nominations from member bodies. For more information about the Nominating Committee, its due process, or for guidance in selecting the best candidate, please visit the IFAC website.

All applications should be submitted before March 15, 2012 electronically via IFAC’s nominations database; instructions are provided on page six of the Call for Nominations.

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 public interest activity standard-setting boards include the International Accounting Education Standards Board, the International Auditing and Assurance Standards Board, and the International Ethics Standards Board for Accountants.

The International Auditing and Assurance Standards Board (IAASB) today released a Feedback Statement on the responses to its January 2011 Discussion Paper, The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications. The Discussion Paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users. Respondents from across the world, including regulators and oversight authorities, users and preparers, audit firms, and professional bodies provided thoughtful and informative input on issues around disclosures. The Feedback Statement provides an overview of the key messages heard and provides thoughts and recommendations on what can be done to address them.

“Disclosures have always been a critical component of financial reporting, but have become more so today as reporting increasingly incorporates fair value information, estimates involving judgment and complex measurements, and narrative disclosures of some of the risks and characteristics of companies and groups. Accordingly, investors and others look to disclosures for vital insights when making investment decisions,” said Prof. Arnold Schilder, Chairman of the IAASB. “This underscores the importance of the IAASB’s initiative to gain further knowledge and understanding of the issues and share what it has heard to stimulate further thinking and exploration in this area.”

The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain, including the impact of trends in financial reporting, applying materiality to disclosures, evaluating misstatements generated by disclosures, the availability of audit evidence to support disclosures, and work effort. To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. However, the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own, but would require international collaboration and cooperation, particularly with both the accounting standard setters—including the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB)—and regulators.

“Financial information that is reliable, understandable, and relevant is essential, as is the assurance on that information that auditors provide. We wholeheartedly agree with the respondents regarding the need for international collaboration and cooperation among standard setters; securities, audit, and prudential regulators; and other stakeholders. We must work together to develop effective responses to the issues being faced today,” notes James Gunn, IAASB Technical Director.  “Like others, the IAASB has a role in enhancing the public’s confidence in disclosures as a priority—recognizing that individual initiatives must be towards finding a collective solution.”

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 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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(New York, December 28, 2011)—The global economy continues to experience difficult conditions as the effects of the financial crisis—for example, on corporate cash flows and access to credit—persist. Volatility in capital markets, and issues including measurement and disclosure of exposures to sovereign debt of distressed countries, continue to create uncertainty. The impact of these issues and uncertainty has wide-ranging financial reporting implications that often extend beyond national borders.

These and other current economic conditions present unique challenges for management of entities, those charged with governance, and auditors in meeting their responsibilities, including assessing an entity’s ability to continue as a going concern and making relevant disclosures in the financial statements and, as appropriate, the auditor’s report.

In light of the current environment, the International Auditing and Assurance Standards Board (IAASB) reminds auditors of their important responsibilities under the International Standards on Auditing (ISAs) and that the appropriateness of management’s use of the going concern assumption is a matter to be considered on every audit engagement.

Prof. Arnold Schilder, Chairman of the IAASB, commented, “Difficult economic conditions give rise to many important audit considerations, but none more important—or more difficult—than evaluating management’s assessment of an entity’s ability to continue as a going concern and determining the appropriate auditor reporting in the circumstances.”

“Auditors must remain alert throughout the audit for evidence of events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern. We cannot stress enough the importance of professional skepticism and judgment in evaluating financial statement disclosures and the implications for the auditor’s report when a material uncertainty exists relating to events or conditions that, individually or collectively, may cast doubt on the entity’s ability to continue as a going concern.”

The 2009 IAASB Staff Audit Practice Alert, “Audit Considerations in Respect of Going Concern in the Current Economic Environment,” highlights matters relevant to the consideration of the going concern assumption in the preparation of financial statements. Among other matters, it addresses factors relevant to the assessment of going concern; the period of time considered in making a going concern assessment; financial statement disclosures; forming an opinion on the financial statements and the implications for the auditor’s report.

“While this Audit Practice Alert was released in context of the 2008-2009 credit crisis, many of the matters addressed in it are equally relevant today. For example, an entity may be experiencing a decline in its financial health, or may have material uncertainties arising from direct or indirect exposures to sovereign debt of distressed countries. Auditors are therefore encouraged to review the Alert and, importantly, the relevant requirements in the ISAs,” emphasized Prof. Schilder.

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 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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Recognizing the need for reliable information in domestic and cross-border securities offerings and other fundraising activities, the International Auditing and Assurance Standards Board (IAASB) today released new International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus.

Companies seeking to access capital markets commonly include pro forma financial information in their prospectuses as a key element to enable investors and others to better assess the investment opportunities presented. Pro forma financial information included in an issuer’s prospectus illustrates the impact of a proposed acquisition, equity or debt issuance, or other transactions on the issuer’s historical financial information as if such event or transaction had occurred at an earlier selected date.

“Pro forma financial information included in prospectuses plays an important role in informing the public’s investment decisions in today’s increasingly global capital markets. Enhancing public confidence in how such financial information has been produced is therefore especially important,” said Prof. Arnold Schilder, Chairman of the IAASB. “The IAASB is confident that this new standard will help meet the public interest need for harmonized practices internationally in this area,” Prof. Schilder added.

The new ISAE 3420 provides comprehensive guidance on the nature and extent of a practitioner’s work when engaged to report on the compilation of pro forma financial information. Among other matters, it establishes minimum benchmarks for suitable criteria for the compilation of such information. It also covers related engagement acceptance and reporting considerations. ISAE 3420 is effective for assurance reports dated on or after March 31, 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 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 Ethics Standards Board for Accountants (IESBA) is proposing changes to its Code of Ethics for Professional Accountants (the IESBA Code) to provide additional guidance to professional accountants in business and in public practice concerning conflicts of interest, and to make revisions to provide more comprehensive guidance in identifying, evaluating, and managing conflicts of interest.

The IESBA approved this project in October 2009.  It examined two sections of the IESBA Code that address conflicts—Section 220, for professional accountants in public practice, and Section 310, for professional accountants in business. In the IESBA’s view, the approach to be taken by a professional accountant in public practice and a professional accountant in business should be broadly similar.  The proposal recognizes, however, that conflicts of interest will typically arise in different circumstances for accountants in public practice, particularly because a conflict of interest may arise from professional services provided by other members of the accountant's firm.

Ken Dakdduk, IESBA Chair, notes, “The proposed changes will provide more specific requirements and guidance for a professional accountant in applying the conceptual framework when identifying, evaluating, and managing conflicts of interest. This includes a clearer description of what is meant under the IESBA Code by the term ‘conflict of interest.’ The changes should assist professional accountants in early identification of a potential conflict of interest, and prompt accountants to evaluate their ability to be objective in that situation and meet the other fundamental principles in the IESBA Code.  From the perspective of the public, timely identification of potential conflicts of interest can provide affected parties with more time to engage an alternative service provider.”

The proposed guidance also calls for professional accountants in business to be alert to interests and relationships that a reasonable and informed third party would be likely to conclude might compromise compliance with the fundamental principles. Further, the IESBA proposal would strengthen the guidance on threats created by compensation and incentive arrangements.

How to comment
The IESBA invites all stakeholders to comment on its proposals. To access the exposure draft and submit a comment, visit the IESBA website at www.ethicsboard.org. Comments on the exposure draft Proposed Changes to the Code of Ethics for Professional Accountants Addressing Conflicts of Interest are requested by March 31, 2012.

About the IESBA
The International Ethics Standards Board for Accountants (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.

The International Auditing and Assurance Standards Board (IAASB) today released International Auditing Practice Note (IAPN) 1000, Special Considerations in Auditing Financial Instruments, to provide important practical assistance to auditors when addressing valuation and other considerations pertaining to financial instruments. Financial instruments is an area of financial reporting involving complex issues and which has come under particular focus due to the recent difficult financial market conditions.

“The IAASB remains focused on supporting financial stability and high-quality financial reporting by continuing to help enhance the consistency of audits.  Accordingly, IAPN 1000 provides important material that will assist auditors in understanding the nature of, and risks associated with, financial instruments, and the different valuation techniques and types of controls that may be used by entities in relation to them. It then highlights important audit considerations that may be relevant throughout the audit process,” noted Prof. Arnold Schilder, IAASB Chairman. “The IAPN is relevant to audits of entities of all sizes, as all entities may be subject to risks of material misstatement when using financial instruments.”

IAPNs are non-authoritative documents that do not impose additional requirements on auditors beyond those included in the International Standards on Auditing (ISAs), nor do they change the auditor’s responsibility to comply with all ISAs relevant to the audit. In finalizing IAPN 1000, and in response to stakeholder concerns, the IAASB evaluated the clarity and appropriateness of the authority of the existing International Auditing Practice Statements (IAPSs). The IAASB decided to withdraw the existing category of pronouncements known as IAPSs and to establish IAPNs, as reflected in the amended Preface to the International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. Accordingly, the six existing IAPSs were also withdrawn as the IAASB determined that they were largely outdated and inconsistent with the text of the clarified ISAs. “The IAASB will be considering in its forward plans matters covered in some of the extant IAPSs, for example the relationship between auditors and banking supervisors, as it develops standards, new IAPNs, or other forms of guidance in the future,” commented Prof. Schilder.

“The IAASB understands that the quality and consistency of audit practice is helped not only through new standards but by other tools that can be used in developing training programs, internal guidance or corresponding national material. New IAPN 1000 helps serve this aim,” explained James Gunn, IAASB Technical Director. “In developing this practical guidance, the IAASB itself gained a deeper understanding of the challenges in this complex area, which will be used to further inform its future work.”

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 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 Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today released the second edition of its Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide). First released in 2010 and developed with CPA Australia, the new edition of the guide features guidance on several new topics, including cloud computing and updated resources for further reading.

“As trusted advisors and small businesses themselves, small practitioners need to be well-versed in all areas of operating a practice. The PM Guide can help SMPs achieve proficiency in a variety of areas to ensure their sustainable, long-term success,” said SMP Committee Chair Sylvie Voghel. “Only by properly managing their practices can SMPs successfully compete in today’s market for professional services.”

To help practitioners improve the management of their accounting practices, this guide includes an extended case study, a sample office procedures manual, and numerous checklists and other worksheets. The comprehensive guide is comprised of eight standalone modules that include developing a growth strategy, managing staff and client relationships, risk management, succession planning, and more. It is intended to help IFAC members support their SMP constituents, and can be used for education and training. An updated companion guide to help members make the best use of the PM guide will be released in early 2012.     

IFAC is grateful to its member bodies Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and Certified General Accountants Association of Canada for providing some of the funding for the PM Guide’s development.

The updated PM Guide can be downloaded free of charge from the SMP Publications and Resources area of the IFAC website. Filter by language to find translations of the first edition. Visit the Small and Medium Practices web pages for access to additional resources, aligned with the topics in each module of the PM guide (see Relevant Links—Practice Management).

About the SMP Committee
The SMP Committee of the International Federation of Accountants represents the interests of professional accountants operating in small- and medium-sized practices and other professional accountants who provide services to small- and medium-sized entities (SMEs). The committee develops guidance and tools, and works to ensure the needs of the SMP and SME sectors are considered by standard setters, regulators, and policy makers. The committee also speaks out on behalf of SMPs to raise awareness of their role and value, especially in supporting SMEs, and the importance of the small business sector overall.

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 Board of the International Federation of Accountants recently approved proposed revisions to the Statements of Membership Obligations (SMOs) to be released for public comment. The SMOs form the basis of the IFAC Member Body Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

The SMOs are issued under the IFAC Board’s authority, and the Compliance Advisory Panel (CAP), together with IFAC Compliance staff, is responsible for reviewing their continuing relevance and sufficiency.

“Since the SMOs were established seven years ago, the regulatory and standard-setting environments in which IFAC members and associates operate have further evolved. As a result, revisiting the SMOs was necessary to reflect those developments and their impact on the global profession,” explained Manuel Sanchez y Madrid, chairman of the CAP. “We redrafted the SMOs to clarify what is expected of IFAC members when they have varying degrees of responsibility for an SMO area. We also brought the SMOs in line with IFAC’s current strategic focus on adoption and implementation of international standards. In the revision project, we were guided by years of experience with the Compliance Program. We looked at how the SMOs have been interpreted and how the compliance assessment is performed by IFAC staff. As a result, I believe the proposed revised SMOs are easier to understand and apply.”

The SMOs and the Compliance Program are designed to assist IFAC in its mission of strengthening the global accountancy profession. The revised SMOs better articulate the obligations of IFAC membership, and the Compliance Program encourages IFAC members and associates in their ongoing efforts to achieve a higher quality of service.

How to Comment
The IFAC Board and the CAP invite all stakeholders to comment on the proposed revisions. To access the Exposure Draft and submit a comment, visit the IFAC website. Comments on the Exposure Draft are requested by March 5, 2012.

About the IFAC Member Body Compliance Program
IFAC members and associates are required to participate in the IFAC Member Body Compliance Program to demonstrate that they are maintaining their good standing and addressing the requirements of IFAC membership. The Program is the responsibility of the IFAC Compliance Staff, reporting to the Chief Executive. The program is overseen by the Compliance Advisory Panel, which—as one of IFAC's public interest activities—is overseen by the Public Interest Oversight Board (PIOB).

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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