Risk management and internal control frameworks, standards, and/or guidance should be aligned internationally, according to the results of the Risk Management and Internal Control Survey released by the IFAC Professional Accountants in Business (PAIB) Committee. With over 600 responses from around the globe and from all types of organizations, the survey results also highlighted that:

• risk management and internal control systems should be better integrated into the governance, strategy, and operations of organizations; and
• risk management and internal control guidelines should be combined into a set of integrated guidelines, as both elements are integral parts of an effective governance framework.

As many organizations have international activities, further international alignment of risk management and internal control guidelines would benefit their operations and compliance processes, reducing costs and allowing for the comparison of these systems across borders and, thus, increasing investor confidence.

Recommended Next Steps
Respondents recommend that national and international standard-setting bodies and professional associations, as well as the relevant regulators, collaborate to (a) determine the major similarities and differences between the various guidelines, (b) compile leading risk management and internal control practices, and (c) consider the benefits of further integration and international alignment of regulations and guidelines in the area of governance, risk management, and internal control. Respondents would like to see these discussions lead to the establishment of an international, integrated framework. To further international alignment, existing national guidelines could be expanded or modified—with allowances made for specific national circumstances—to meet the principles of an international framework.

The survey analysis, Global Survey on Risk Management and Internal Control—Results, Analysis, and Proposed Next Steps, is available at https://www.ifac.org/publications-resources/global-survey-risk-management-and-internal-control.

About the PAIB Committee
The PAIB Committee (www.ifac.org/paib) 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 (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 Accountancy Organization (PAO) Development Committee of the International Federation of Accountants (IFAC) has issued a revised edition of its Good Practice Guide, Establishing and Developing a Professional Accountancy Body (the Guide), which was first released in 2005 and updated in 2007 to support professional accountancy organizations in expanding and strengthening their role and responsibilities in representing the accountancy profession.

The structure of the Guide, enhanced and simplified from the original version, is now organized in two sections: Establishing and Developing a Professional Accountancy Body, which covers the roles and responsibilities of a professional accountancy organization, education and examinations, and capacity development; and Tools and Resources to Support the Development of the Accounting Profession, which includes new case studies, practical illustrations, and supplementary guidance.

PAO Development Committee Chairwoman Deborah Williams noted, “Building on the hard work undertaken by the former Developing Nations Committee, we are very pleased to release a completely revised and updated Good Practice Guide as our first PAO Development Committee publication, which was written in response to demand from the developing profession. Strengthening professional accountancy organizations is an essential element of developing financial infrastructures, which in turn assists in achieving financial stability. Our committee and the guidance it provides helps newer professional accountancy organizations, and all of their development partners, along the path to building an effective, sustainable profession.”

The Guide should be a valuable resource for individuals and organizations involved in building the capacity of the accountancy profession, IFAC members and associates seeking further development, and other organizations involved in the regulation of accounting and auditing activities. While primarily aimed at building the capacity of the profession in emerging countries, the guide will also be useful for more developed professional accountancy organizations considering revisions to governance structures, the development of education programs, and the adoption and implementation of international standards.

This revised edition includes the following additions:

• Further guidance on enhancing public sector focus
• Expanded information about the IFAC Statements of Membership Obligations (SMOs)
• Sample Action Plans on quality assurance, and adoption and implementation of international standards
• Guidance on strengthening governance

In addition, the guide was developed in the English language with plans for translation into Arabic, French, Russian, and Spanish by December 2011.

Establishing and Developing a Professional Accountancy Body can be downloaded free of charge from the IFAC website.

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.

The effects of the financial crisis continue to be felt by small businesses, according to the small- and medium-sized accountancy practitioners recently polled by the International Federation of Accountants. Economic uncertainty is still the biggest challenge facing small- and medium-sized entities (SMEs), said the largest group of respondents—nearly 30%—while the burden of regulation was a close second. Regulations and standards challenge small- and medium-sized accounting practices (SMPs) as well: over 40% said that keeping up with regulations and standards is the most important issue now facing their practice.

Despite the prevalence of economic uncertainty, nearly 40% of SMPs expect their practices to perform better this year than last year. Only slightly more (43%) expect business to be even with 2010, and 19% expect business to shrink in 2011.

SMPs continue to generate the largest proportion of their revenue from traditional compliance-based services. Nearly 45% of respondents indicated that audit and assurance is their biggest source of revenue, followed closely by accounting and compilation (40%). Tax and advisory/consulting services comprised only 15% combined.

With the aim of taking a snapshot of the key issues confronted by SMPs and their SME clients, the IFAC SMP Quick Poll will be issued quarterly throughout 2011 in the SMP eNews, IFAC’s free newsletter for SMPs. The first Quick Poll collected 425 responses from all regions of the world over a 14-day period (January 27, 2011 to February 9, 2011). To subscribe to the SMP eNews, and participate in our next poll, sign up here.

IFAC wishes to thank those member bodies and regional organizations that published the poll in their newsletters, or otherwise helped promote it. The full survey results are available here.

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.

The International Auditing and Assurance Standards Board (IAASB) today released for public comment a discussion paper exploring key issues relating to disclosures in financial statements. Titled The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications, the paper highlights recent trends in the range, volume, and complexity of financial statement disclosures, and explores issues and practical challenges in preparing, auditing, and using them. In addition, in order to stimulate further debate on audit quality, and in its continuing efforts to facilitate robust audits in the public interest, the IAASB today also released a publication titled Audit Quality: An IAASB Perspective.

Financial Statement Disclosures
“Over the past several years, we have witnessed a transformation in the nature and extent of disclosures; for example, it is now common to see disclosures that are more forward-looking or qualitative,” noted Prof. Arnold Schilder, IAASB chairman. He added, “Such disclosures are critical—as one investor said to me, ‘We care more about the “soft stuff.”’ This development, however, raises important issues and challenges for preparers and auditors alike. Through this discussion paper, the IAASB seeks to better understand different viewpoints on a range of issues about financial statement disclosure practices, as well as the implications from an auditing perspective.”

The discussion paper addresses critical issues such as challenges in preparing disclosures, the nature and extent of evidence for different types of disclosures, and the application of the concept of materiality to disclosures. Views from all stakeholders are sought, and the discussion paper asks specific questions of preparers; investors, lenders, and other creditors; regulators; and auditors. A consultation period of over four months has been provided to enable stakeholders to consider the complex issues addressed in the discussion paper.

Audit Quality
“Audit quality is at the heart of the IAASB’s mandate to set high-quality auditing standards,” noted Prof. Schilder. “However, while our clarified International Standards on Auditing (ISAs) make an important contribution to audit quality worldwide, they are not the only element of audit quality. Also, it has been clear from our various stakeholder outreach efforts that there are many different perspectives on audit quality. This publication aims to help raise stakeholders’ awareness of the many different views and influences on audit quality, as well as of the complexity and multifaceted nature of audit quality.”

“The publication is intended to stimulate further thought and discussion on audit quality among stakeholders, while recognizing the importance of international consensus on audit quality matters,” explained IAASB Technical Director James Gunn. “At the same time, the IAASB recognizes that more can be done to maintain and enhance audit quality. The IAASB will continue to explore how it may do so throughout 2011 and beyond.”

How to Comment
The IAASB invites all stakeholders to comment on its proposals. To access the discussion paper on financial statement disclosures or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the discussion paper on financial statement disclosures are requested by June 1, 2011.

Perspectives on audit quality and views on key audit quality issues are welcomed by the IAASB at any time. They may be submitted in writing to one or more of the key IAASB contacts listed in the audit quality publication.

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 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 (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 International Public Sector Accounting Standards Board (IPSASB) has released an updated and improved version of Study 14, Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities. The third edition of Study 14, which features links to many useful resources, provides guidance on how to migrate to the accrual basis of accounting in accordance with International Public Sector Accounting Standards (IPSASs), and is relevant to governments and other public sector entities, including international governmental organizations.

The latest edition of Study 14 covers all 31 IPSASs, including first-time coverage of the five IPSASs issued in late 2009 and early 2010: IPSAS 27, Agriculture; IPSAS 28, Financial Instruments: Presentation; IPSAS 29, Financial Instruments: Recognition and Measurement; IPSAS 30, Financial Instruments: Disclosures; and IPSAS 31, Intangible Assets. In light of the much increased global knowledge and experience in adopting IPSASs, the non-technical sections of Study 14 were also substantially improved. They now reflect the current state-of-the-art in adoption and implementation.

"This edition of Study 14 includes significant changes from the previous edition, and demonstrates the IPSASB’s commitment to support the global implementation of IPSASs," noted IPSASB Chair Andreas Bergmann.

How to Order
The full text of Study 14 can be downloaded free of charge from the IPSASB section of IFAC’s Publications & Resources site: web.ifac.org/publications. It is available in electronic form only.

About the IPSASB
The IPSASB (www.ifac.org/publicsector) 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 (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 International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries, has issued an announcement to alert its members and the public of its Call for Nominations for IFAC Boards and Committees in 2012.

Both the Call for Nominations and its companion guide, Developing a Nominations Strategy, are designed to help the members of IFAC, and others, identify the most qualified person for nomination to each available position on the boards and committees, while also achieving a gender, regional, and professional balance. These in-depth documents, located on the IFAC website, contain strategic and practical advice for nominating organizations, which allows them to make more informed decisions in their selections and to understand the requirements and expectations of the nominees.

Nominations may be submitted online from January 15 to March 15, 2011.

Each year, roughly one-third of the 150+ positions on the boards and committees come up for rotation, though for some of those positions serving members may be re-appointed. The nominations process is designed to ensure a diverse membership, and a transparent and consistent approach to filling available positions. For more information about the nominations strategy, its due process, Nominating Committee members, or for guidance in selecting the best candidate, please visit www.ifac.org/NominatingCommittee.

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.

The International Auditing and Assurance Standards Board (IAASB) today released for public exposure proposed International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements. This revised standard is the second IAASB proposal in recent months that addresses the growing international need for robust standards for services that can be used by entities that are either not required or do not elect to be audited. 

“The financial statement review engagement is an important service in meeting evolving regulatory, market, and business reporting needs, in particular in the small- and medium-sized entity (SME) sector,” noted Prof. Arnold Schilder, IAASB Chairman. “The proposed standard seeks to establish clear and robust requirements governing the practitioner’s performance of a review engagement, and thus serves to fulfill its purpose of enhancing users’ degree of confidence in an entity’s financial statements.”

A review of financial statements in accordance with the proposed ISRE consists primarily of making inquiries of management and others within the entity involved in financial and accounting matters, applying analytical procedures, and evaluating the sufficiency and appropriateness of evidence obtained. The practitioner reports on whether anything has come to the practitioner’s attention that causes him/her to believe that the financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. The procedures performed in a review are substantially less than those performed in an audit, and the practitioner does not express an audit opinion.

“A financial statement review is, and should be seen as, a distinct service from a financial statement audit. It is essential that users are able to clearly distinguish between the two,” said IAASB Technical Director James Gunn. “An important aspect of the proposed standard therefore is the form and content of the practitioner’s report. The IAASB seeks comments on whether the proposed report communicates clearly to users the work performed and the limited assurance obtained in a review engagement.”

The proposed ISRE will help practitioners around the world who perform review engagements converge towards use of a globally accepted benchmark, and facilitate development of practice in jurisdictions that currently do not have national standards in this area.

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 May 20, 2011.

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 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 (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.

Notes to Editor:
In October 2010, the IAASB released proposed International Standard on Related Services (ISRS) 4410, Compilation Engagements.

The International Auditing and Assurance Standards Board (IAASB) today released for comment proposed new International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements.

“The monetary value of carbon trading transactions around the world is in the billions and continuing to increase exponentially. This has led to a strong and growing need for mechanisms to enhance the reliability of the underlying information used in these transactions—and this proposed standard is an important part of fulfilling that need,” said Prof. Arnold Schilder, IAASB chairman. “Disclosure of emissions information is also increasingly being required by regulation or presented on a voluntary basis to inform investors, consumers, and others,” Schilder added. “For example, it is becoming more common to include detailed emissions information in company sustainability reports. Providing assurance to enhance the reliability of information for regulatory and voluntary reporting is also important.”

Proposed ISAE 3410 has been developed through a robust program of consultation, including a series of global roundtables and feedback received on an earlier Consultation Paper. The proposed standard addresses the practitioner’s responsibilities in identifying, assessing, and responding to risks of material misstatement, and contains illustrative assurance reports on greenhouse gas statements. The proposed requirements and guidance also recognize that most engagements will be undertaken by a multidisciplinary team, so they address the need for the assurance practitioner to integrate experts—in engineering or environmental science, for example—into various stages of the engagement.

“The proposed standard can be applied to a broad range of circumstances, including emissions from electricity used at a single office; emissions from complex physical or chemical processes at several facilities; or emissions calculated using information from multiple entities in a supply chain,” explained IAASB Technical Director James Gunn. He noted, “Importantly, the proposed standard covers both ‘reasonable assurance’ and ‘limited assurance’ engagements for both of which demand is increasingly evident in the marketplace.”

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 June 10, 2011.

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 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 (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 International Auditing and Assurance Standards Board (IAASB) today released for comment its Proposed Strategy and Work Program for 2012–2014. The Consultation Paper was developed with input from the IAASB’s April 2010 strategy survey and other consultation and outreach activities. It highlights issues facing the accounting profession and suggests priority activities for the IAASB during 2012–2014.

The IAASB is proposing to remain focused on three strategic areas:

• Developing and revising standards and pronouncements;
• Monitoring and facilitating adoption of those standards; and
• Responding to implementation concerns and improving the consistency of the standards’ practical application.

Prof. Arnold Schilder, chairman of the IAASB, noted, “An important consideration in setting the IAASB’s work program is determining an appropriate balance between ensuring that the clarified International Standards on Auditing are successfully implemented and kept up to date, while also supporting new and emerging assurance services and addressing the needs of small and medium entities and practices. Therefore, it will be essential for stakeholders to signal where they believe the IAASB’s time, in the public interest, should be spent.”

A number of issues identified in the initial strategy consultation are already being addressed in the IAASB’s current work program. As outputs of its December meeting, the IAASB will be releasing a number of publications over the next several weeks, including: exposure drafts of proposed International Standard on Assurance Engagements 3410, Assurance on Greenhouse Gas Statements and revised International Standard on Review Engagements 2400, Engagements to Review Historical Financial Statements; a Discussion Paper entitled The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications; and a publication entitled Audit Quality: An IAASB Perspective to stimulate further thought and discussion on the topic amongst stakeholders.

“The Proposed Strategy and Work Program for 2012–2014 reflects a continued focus on these and other important projects currently underway,” said IAASB Technical Director James Gunn, adding, “At the same time, it also looks forward more broadly and seeks views on other new initiatives to fulfill the IAASB’s public interest mandate.”

How to Comment
The IAASB invites all stakeholders to comment on its proposed strategy and possible actions to implement the proposed strategy. To access the Consultation Paper or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the Consultation Paper are requested by April 4, 2011.

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 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 (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 Public Interest Oversight Board (PIOB) has confirmed a number of new and reappointed members of the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board supported by the International Federation of Accountants (IFAC). The appointments were recommended by the IFAC Board and are effective January 1, 2011. The PIOB is an independent body that oversees IAASB activities.*

The new members of the IAASB are:

• Jean Blascos (France), a practitioner in a transnational firm;
• Jianshen Chen (China), a practitioner in a large national firm; and
• Merran Kelsall (Australia), a non-practitioner and chair of a national auditing standards setter.

The following members were reappointed for an additional term:

• John Archambault (United States), a practitioner in a transnational firm;
• Jon Grant (United Kingdom), a non-practitioner and staff member of a national audit regulator; and
• Caithlin McCabe (Australia), a practitioner in a transnational firm.

In addition, Diana Hillier was reappointed as deputy chair of the IAASB.

These six new and re-appointed members will work alongside the chairman, Prof. Arnold Schilder, the deputy chair, and the other 10 board members in setting high-quality auditing and assurance standards. In addition to standard setting, the IAASB strives to enhance the quality and uniformity of audit practice throughout the world by promoting the adoption and implementation of its International Standards on Auditing (ISAs).

“These new members are excellent choices for the IAASB,” said IFAC Chief Executive Officer Ian Ball. “In addition to being highly qualified individuals, their appointments maintain the balance of nine practitioners and nine non-practitioners on the board. The appointments also enhance the diversity of the board in terms of gender, regional, and professional balance.”

For more information about the work of the IAASB, visit its homepage at www.iaasb.org.

* Note to Editors
The Public Interest Oversight Board (PIOB) was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

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 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 (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.