The International Auditing and Assurance Standards Board (IAASB) today released for public comment proposed revised International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.

Proposed ISAE 3000 is a principles-based standard that can be applied effectively to a broad range of assurance engagements. Such engagements may range from assurance on statements about the effectiveness of internal control, for example, to direct engagements such as performance or “value for money” audits, to possible future engagements addressing integrated reporting or corporate social responsibility reporting.

“Proposed ISAE 3000 includes requirements that enable consistent high-quality engagements, while being sufficiently flexible to apply to the broad range of relevant engagements,” noted Prof. Arnold Schilder, IAASB Chairman. “This is an important balance. ISAE 3000 is the overarching standard for current and future topic-specific ISAEs and assurance engagements where no separate ISAE exists. As a result, it needs to be sufficiently robust, yet not so unwieldy as to be impractical to apply. Equally, the ISAE should facilitate innovation in the evolving field of assurance, not act as an impediment.”

Proposed ISAE 3000 covers both reasonable and limited assurance engagements. Among other proposals, the ISAE introduces guidance designed to help readers better understand these two levels of assurance. It also includes guidance addressing direct engagements that have become common in the public sector and have been undertaken increasingly in the private sector. “Since 2003, when the existing standard was approved, practitioners and national standard setters have gained considerable experience with ISAE 3000 that has helped identify a number of opportunities to clarify how some of the core underlying concepts should be applied in practice,” explained James Gunn, IAASB Technical Director.

Proposed ISAE 3000 also includes material from the existing International Framework for Assurance Engagements that is necessary for the ISAE to be understood without reference to the Framework. Accompanying the exposure of the proposed ISAE are also proposed consequential amendments to the Framework reflecting the impact of the proposals in ISAE 3000.

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/ExposureDrafts.php. Comments on the exposure draft are requested by September 1, 2011.

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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The International Public Sector Accounting Standards Board (IPSASB) today released for comment an exposure draft (ED), Key Characteristics of the Public Sector with Potential Implications for Financial Reporting. The paper provides background on issues affecting the development of a conceptual framework for public sector entities and standard setting. In particular, it highlights that public sector entities are likely to depend upon taxation rather than commercially generated profits for their continued existence—and have governance arrangements that generally involve a legislative body holding an executive to account.

The paper is geared toward those who may have limited familiarity with the public sector, particularly those with more experience of financial reporting in the private sector—both for- profit and not-for-profit entities.

One of the main objectives of governments and other public sector entities is to deliver goods and services—not to produce profits, as in the private sector. As a result, there are a large number of financially significant non-exchange transactions in the public sector. These include outflows, such as state pension and social security payments, and inflows from taxation and transfers from other levels of government. However, the paper notes that there are a large number of transactions in the public sector that mirror those in the private sector, and that in such cases, there is no reason why accounting treatments should differ between the two sectors.

The paper also considers the importance of the budget in many jurisdictions. It is often the primary mechanism for communicating with citizens and demonstrating compliance with legal requirements.

Other areas explored include the specialized nature of much of the property, plant, and equipment deployed in the public sector, the regulatory role of government, the responsibilities for a nation’s or area’s heritage, the longevity of most governments and many public sector entities, and the ownership or control of rights to natural resources. The paper also notes that for governments, reporting under statistical bases of accounting is highly important for decision-making purposes and economic analysis.

“When government and public sector financial reporting is mentioned, you often hear a view that the public sector is different; sometimes differences can be exaggerated or underestimated. This exposure draft tries to identify areas that really do need to be considered by standard setters when developing the concepts for public sector financial reporting. We are interested to hear stakeholder views on whether we have identified the right areas,” said IPSASB Chair Andreas Bergmann.

How to Comment
To access the exposure draft or to submit a comment, visit the IFAC website at www.ifac.org/Guidance/EXD-Outstanding.php. Comments on the exposure draft are requested by August 31, 2011. The IPSASB invites all stakeholders to comment on the exposure draft.

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.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The International Public Sector Accounting Standards Board (IPSASB) published today its 2011 Handbook of International Public Sector Accounting Pronouncements. In two volumes, the Handbook contains all current IPSASB pronouncements, including 31 accrual-based standards and the IPSASB's cash basis standard. The 2011 Handbook incorporates the amendments made as a result of the IPSASB’s 2010 Improvements Project, as well as?at the beginning of each accrual-based standard?a history of the amendments made to that standard.

“The 2011 Handbook provides a comprehensive set of accounting requirements and guidance developed specifically for preparers of public sector financial statements,” said IPSASB Chair Andreas Bergmann. “In addition, the Handbook has been updated to reflect the IPSASB’s Improvements Project, completed in November 2010.”

How to Order
The Handbook can be downloaded in PDF format from the Publications and Resources page of the IFAC website. Print copies of volumes I and II of the Handbook are also available; however, shipping and handling charges apply. Orders can be placed at web.ifac.org/publications or by calling IFAC at +1 (212) 286-9344.

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.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

International network of accounting firms Kreston International has been admitted as a full member of the Forum of Firms after confirming that it has met the Forum's membership standards. This includes reporting that it has implemented a globally coordinated quality assurance program, has policies and methodologies based on the International Standards on Auditing (ISAs), and has met other specific requirements of the Code of Ethics for Professional Accountants.

As of January1, 2011, twenty-one other international networks of accounting firms are full members of the Forum of Firms and continue to report their adherence to the Forum's membership obligations. A list of the Forum's members is available at www.forumoffirms.org.

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. “We are delighted at Kreston’s decision to join the Forum and their public commitment to International Standards on Auditing and rigorous quality control standards,” says Robert Dohrer, chair of the Forum of Firms. “By taking part in the Forum’s activities, Kreston and other Forum members have an important role in contributing to public confidence in the accountancy profession and in financial reporting in general.”

In order to achieve full membership status, Kreston International 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 that conform to the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants and national codes of ethics.

For additional details on the Forum of Firms, please visit: www.forumoffirms.org.

About the Forum of Firms
The Forum of Firms is an association of networks of international accounting firms that perform transnational audits. Members of the Forum have committed to adhere to and promote the consistent application of high-quality audit practices worldwide, including the use of International Standards on Auditing, and the maintenance of appropriate quality control standards in accordance with International Standards on Quality Control issued by the International Auditing and Assurance Standards Board. Through their organizations, members also conduct globally coordinated internal quality assurance reviews on a regular basis and have policies and methodologies that conform to the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants. The Transnational Auditors Committee is the Executive Committee of the Forum of Firms and a committee of 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 164 members and associates in 125 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 its 2010 annual report. The report highlights the IAASB’s ongoing work to promote the adoption and implementation of its clarified International Standards on Auditing (ISAs), and the issuance of a number of proposals in areas where there is demand for new and innovative assurance and related services other than audits of financial statements.

“A number of projects underway are addressing issues that are at the forefront of our stakeholders’ minds, and our efforts can be best summarized as a pursuit of three goals: clarity, quality, and relevance,” said IAASB Chairman Prof. Arnold Schilder. “Developing assurance standards in new areas has taught us that wide consultation becomes even more critical to ensure the public interest is being met.” Accordingly, the annual report details the extensive outreach and liaison activities undertaken during 2010 with key groups, such as regulators and audit oversight bodies, national auditing standard setters, accounting standard setters, governments and public sector organizations, and accounting firms.

Noted James Gunn, IAASB Technical Director, “The IAASB’s debates on its 2010 standard-setting proposals are likely to evolve during 2011 as stakeholder responses are received. We hope that the new interactive format of the 2010 annual report allows those interested in the IAASB’s work to more easily stay abreast of developments in our initiatives.” The annual report also catalogues the tools and resources that have been developed to support the clarified ISAs and makes reference to the ongoing consultation on the IAASB’s work program for 2012–2014.

A report from Linda de Beer, the newly appointed chairman of the IAASB Consultative Advisory Group (CAG), describes the work of the CAG in providing input to the IAASB. The IAASB also continues to receive oversight from the Public Interest Oversight Board (PIOB).

The 2010 IAASB annual report can be downloaded from its website.

About the IAASB
The IAASB (www.iaasb.org) develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the PIOB, which oversees the activities of the IAASB, and the IAASB CAG, 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 (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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has significantly updated its Sustainability Framework (the Framework), a tool to support professional accountants and their organizations as they integrate sustainability into their strategy, operations, and reporting. The Framework highlights the important roles that professional accountants play in facilitating the sustainable development of their organizations, as well as the importance of adopting an integrated approach to business reporting.

Embracing sustainability and corporate responsibility from three perspectives—strategy, operations, and reporting—is critical to gaining the trust of stakeholders and the wider public, and ultimately ensuring sustainable value creation. Through key considerations, as well as examples from major international corporations, smaller firms, professional accountancy organizations, and leaders from around the world, the Framework provides a comprehensive view of some of the current best practices globally in each of these areas, and is applicable to entities of all sizes and levels of complexity.

“Professional accountants are already doing much to help organizations minimize waste, create efficiencies, and cut costs, which is undoubtedly the biggest driver for embracing sustainability,” said Roger Tabor, chair of the PAIB Committee. “However, accountants also need to be prepared to take on new and expanded roles, activities, and skills as they support their organizations in charting a more sustainable path. The Framework can help them on this journey.”

“To successfully embed sustainability within an organization, business leaders and professional accountants must recognize the importance of incorporating environmental, social, and governance factors into all functions and processes—from strategic planning and goal setting, to external communications and reporting. And, each of these areas is interconnected: to produce high-quality sustainability and integrated reports, these factors must be embedded into an organization’s culture and decision making,” said Ian Ball, CEO of IFAC.

Presented in a digital magazine format, and available in PDF, the Framework contains numerous internal links to allow professional accountants to easily navigate to the sections of most relevance to their particular roles. All sections include key considerations for professional accountants, including examples and references to other sources of information and guidance. The Sustainability Framework is available on the IFAC website.

About the PAIB Committee
The PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, financial services, the public sector, education, and the not-for-profit sector. 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Today over 200 delegates from more than 45 countries converged in Istanbul for the fifth SMP Forum of the International Federation of Accountants (IFAC) Small and Medium Practices (SMP) Committee. Held in cooperation with the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB), the Expert Accountants' Association of Turkey (EAAT), and the Fédération des Experts Comptables Méditerranéens (FCM), the conference featured a keynote address from IFAC President Göran Tidström, and presentations from the World Bank and the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME).

Delegates from IFAC member bodies convened to discuss, debate, and share best practices on a range of topics, including the challenge for small businesses in keeping up with the complicated and rapidly changing regulatory environment and the many ways that SMPs can partner with small businesses to build and sustain value. The forum also included breakout sessions on implementing the IESBA Code of Ethics, the IAASB’s future projects for SMPs, and resources and tools to support this sector.

In his opening remarks, Mr. Tidström indicated that small- and medium-sized entities (SMEs) are a public interest issue: they represent two-thirds of employment globally, and comprise 95% of entities, according to the OECD. “Therefore,” he said, “keeping the wheels of the SME sector turning is critical, as they are the engine of the global economy.”

Mr. Tidström continued, “SMPs can help SMEs thrive by providing them with a broad range of services, including strategic and business advisory services, IT and financial reporting systems support, risk management and fraud prevention services, and financial, tax, and HR advisory services. The IFAC SMP Committee supports SMPs in developing and maintaining their competencies to provide these services, in addition to traditional compliance services.”

“This event continues to provide us with a unique opportunity to unite the global SMP community to focus on the issues that are the most relevant to this sector. The attendance here today is testament to professional accountancy organizations’ commitment to their SMP members. The SMP Committee is committed to building the capacity of SMPs, and we look forward to translating what we have learned here today into tangible outputs,” said Sylvie Voghel, chair of the IFAC SMP Committee.

To learn more about IFAC’s activities to support SMPs, and to access the valuable resources and guides produced by the SMP Committee, see the International Center for SMPs on the IFAC website. Presentations from this year’s forum, as well as videos, will be available on this site.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Compliance Advisory Panel (CAP) has released for comment the International Federation of Accountants’ Proposed Member Body Compliance Program Strategy 2011-2014. The paper was drafted as a result of the strategic discussions held between the CAP, IFAC compliance staff, and Public Interest Oversight Board (PIOB) representatives in October 2010 and January 2011. The discussions were based on the CAP self-assessment, submitted as part of the 2009-2010 Monitoring Group’s review of the IFAC Reforms, as well as comments from the Fifth Public Report of the PIOB (May 2010).

The paper highlights the vision, values, and objectives of the IFAC Compliance Program and suggests priority areas through 2014. These areas include enhancing quality of professional accountancy organizations (PAOs); contributing to the agendas and actions of PAOs for the meaningful adoption and implementation of international standards; improving information and knowledge sharing; and collaborating with stakeholders involved in the regulation and development of the profession.

The CAP invites IFAC members and external stakeholders to comment on its proposed strategy. To access the paper or submit a comment, visit the Exposure Drafts and Consultation Papers section of the IFAC website. Comments on the paper are requested by May 30, 2011.

About IFAC
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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Elemental changes to the current format of financial reporting need to be made to increase its relevance and stakeholder value and stem the increasing complexity that has plagued financial reporting in recent years, according to key business leaders from around the world interviewed by the International Federation of Accountants (IFAC). Developing a new form of reporting that integrates an organization’s social and environmental performance with its economic performance, in a simplified manner, would benefit all stakeholders, according to interviewees. These and other recommendations are summarized in the report, Integrating the Business Reporting Supply Chain, released today by IFAC.

The report is based on IFAC’s interviews with 25 prominent business leaders, representing preparers, directors, auditors, standard setters, regulators, and investors, on what should be done to effectively improve governance, the financial reporting process, the audit, and the usefulness of business reports in the aftermath of the financial crisis. The report provides a summary of interviewees’ recommendations in each area and highlights some of IFAC’s related initiatives.

“Society needs successful commercial organizations that act responsibly, and it is important that the business reporting system not only allows but actively promotes this corporate philosophy. There is much debate as to whether or not the current reporting system is fit for this purpose, and this report seeks to drive forward the debate in the crucial areas: governance, financial reporting, financial auditing, and the usefulness of business reports,” said Charles Tilley, chair of the IFAC Business Reporting Project Group.

Strong governance lies at the core of high-quality business reporting. Interviewees agreed that good governance starts with tone at the top. Additional recommendations to strengthen governance in organizations include:

• Governance codes should be principles based and stakeholder driven;
• Collaborative, global effort is required to address systemic risk; and
• More independence should be required of boards of directors.

Improving financial reporting depends on simplifying reports, so that they are easily understood by all stakeholders in the reporting supply chain, according to interviewees. Interviewees also called upon regulators and standard setters to limit the financial reporting burden on smaller and non-listed entities.

In the area of auditing, interviewees agreed that limited audit choice is a challenge that needs to be addressed. They also made recommendations to further improve practice development and auditor communication, and recommended that auditors expand the scope of their assurance services to include non-financial information, such as the social and sustainable performance information included in integrated business reports.

Interviewees acknowledged that achieving integrated business reporting will be very hard to accomplish, and will require all stakeholders in the business reporting supply chain to manage the challenges—including litigation risks and regulations that may inhibit change—in a coordinated way.

IFAC would like to thank all of the business leaders who agreed to be interviewed, graciously lending their time and expertise, and without whom this project would not have been possible. To access a summary of the key recommendations, the interview transcripts, and a series of articles based on the interviews, visit the IFAC website. More information about the project group and their previous work is also available on this site.

About IFAC
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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Profession Urges International Federation of Accountants to Increase Role in These Areas

Credibility of the profession, standard setting, and adoption and implementation are key areas of focus for leaders in the accountancy profession, according to results of the 2010 IFAC Global Leadership Survey of the Accounting Profession, released today by the International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries.

“In our fourth annual survey, there was extremely strong confirmation among survey participants that IFAC should continue in its pivotal role as an international standard setter,” said Ian Ball, chief executive officer of IFAC. “In addition, respondents asked us to continue to work toward convergence and the adoption of international standards, and proactively support and restore public confidence in the accountancy profession.”

IFAC’s Role in Implementation of Global Standards is Crucial
The accountancy profession feels that transitioning to International Standards on Auditing (ISAs) is a crucial issue—96 percent of survey respondents cited this as very important or important, compared with 83 percent last year. There was also universal sentiment that IFAC, as a representative of the global accountancy profession, has a key role to play in convergence and leading the way in the global adoption and implementation of standards.

Virtually all survey participants (98-99 percent) said that IFAC plays a very important or important role relating to confidence in, and adoption of, high-quality international standards. In addition, 97 percent of respondents said that recognition of IFAC as the umbrella organization for international standards in the areas of auditing and assurance, education, ethics, and public sector financial reporting is very important or important. The vast majority of survey participants said IFAC should continue to work toward convergence and effective implementation of international standards. To encourage implementation, 91 percent of those surveyed said that developing guidance regarding international standards and corporate governance principles is very important or important.

Sustainability and SMPs Take Center Stage
Sustainability emerged as a key issue as well, with 91 percent saying that progressing corporate social responsibility, including sustainability, is important, compared to 82 percent last year. In addition, 95 percent of respondents said that addressing the needs of SMEs and SMPs is crucial.

Global Code of Ethics Needed
The importance of ethics also was cited—auditor independence and agreeing/discussing expectations to prevent and detect fraud were cited by 91 percent and 89 percent of respondents, respectively. The survey also confirmed the widespread opinion that there is a clear need to have a global code of ethics to protect the fundamental qualities of the profession, particularly relating to independence. According to participants, the code needs to take local culture into account, and needs to be effectively enforced.

Demand for Professional Accountants Continues to Grow
Significant demand is seen across various sectors, particularly in public practice, with approximately three-quarters of respondents saying that demand is very high or high in public practice-accounting/advisory/tax/other (78 percent) and public practice-auditing/assurance (71 percent). These results compare positively to our 2009 survey, in which 77 percent and 65 percent, respectively, of respondents cited very high or high demand in these areas. Those surveyed said that the accountancy profession continues to be attractive due to career options, ability to work internationally, and earning potential.

About the Survey
The 2010 IFAC Global Leadership Survey on the Accountancy Profession asked officers (generally presidents and chief executive officers) from IFAC’s member bodies, associates, affiliates, and regional accountancy organizations and groupings a variety of questions regarding the accountancy profession. Survey results include data from 123 respondents who took the survey from January 10, 2011 to February 15, 2011.

About IFAC
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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.