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

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

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

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

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

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

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

Titles of the newly issued standards are as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IFAC (https://www.ifac.org/) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Accountancy Institutes

Regional Accounting Organizations and Groupings

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

Leaders of over 100 accountancy organizations worldwide met in Rome on November 11-14 to participate in the International Federation of Accountants' (IFAC) Board and Council meetings, where they addressed the global financial crisis, convergence to global auditing and ethics standards, and the profession's role in sustainable development. At the conclusion of the meeting, President Robert Bunting of the United States assumed the IFAC Presidency for a two-year term ending in November 2010. Göran Tidström of Sweden assumed the position of Deputy President. In addition, the Council approved the appointment of three new members to the IFAC Board and the reappointment of four members to a second term.*

Newly elected IFAC President Robert Bunting, a past Chairman of the American Institute of Certified Public Accountants and an IFAC Board member since 2005, commented on the global financial crisis, pointing out "The financial crisis has clearly demonstrated how interconnected global markets are. This makes IFAC's initiatives to achieve convergence of international standards ever more urgent. Convergence to a common set of high quality accounting and auditing standards is essential to assuring the quality of the profession's services and is vital to the effective operations of markets and to promoting cross-border trade and investment."

"I believe that IFAC has a key role to play in restoring confidence in the markets," emphasizes Mr. Bunting. "We must demonstrate that our standard-setting processes are rigorous. And we must continue to promote strong corporate governance and the highest quality practices by the world's accountants, whether they work in public practice or in business and industry. Additionally, we need to scrutinize ourselves and look at what we can do better or differently. And lastly, we must be even more engaged with all market participants and actively collaborate with them in identifying and implementing the solutions that can prevent future crises."

Supporting these goals, the IFAC Council approved an updated Strategic Plan for 2009-2012. This plan has an increased focus on the implementation of international standards, on enhancing the relevance and sustainability of the profession, and on communicating more vigorously on regulatory, financial management, financial reporting, corporate governance, and other issues.

"Another area of focus in the strategy and one to which I plan to give my attention is meeting the needs of small and medium practices (SMPs) and enterprises (SMEs)," adds Mr. Bunting. "The SMP/SME community did not cause the current financial crisis, but they will be very much affected by it. We must do what we can, including ensuring that they are not subject to overly burdensome regulatory requirements, to contribute to their health and effectiveness."

The IFAC Strategic Plan for 2009-2012 is available on the IFAC website.

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

* Note to Editors - IFAC Board Members (November 2008 - November 2009)

Robert L. Bunting, President, United States

Göran Tidström, Deputy President, Sweden

Warren Allen, New Zealand**

Abdeljelil Bouraoui, Tunisia

Yugui Chen, China

Roberto D'Imperio, Italy

Kevin Dancey, Canada

Ingrid Doerga, Netherlands

Robert Hodgkinson, United Kingdom

Gen Ikegami, Japan**

Ved Kumar Jain, India*

Japheth Katto, Uganda

Olivia Kirtley, United States

David Leonard, United Kingdom

Bernadette McGrory-Farrell, Ireland**

Joycelyn Morton, Australia**

William Nahum, France

Norbert Pfitzer, Germany

Roberto Resa, Mexico

Syed Asad Ali Shah, Pakistan*

Luiz Carlos Vaini, Brazil

Steve Vieweg, Canada*

* New IFAC Board members as of November 2008
** IFAC Board members reappointed for a second term in November 2008

As part of its mission to serve all professional accountants in business, including those working in the public sector, IFAC's Professional Accountants in Business (PAIB) Committee has conducted a survey to obtain information about the development of financial and non-financial performance measurement and reporting structures in various public sector entities around the world.

The results of this survey, contained in the information paper Developments in Performance Measurement Structures in Public Sector Entities, will help professional accountants in business, and others who work in the public sector, in evaluating and further improving their own financial and non-financial performance measurement structures. This will enable them to better plan, execute and control their organization's service delivery and to achieve a higher level of accountability. The results will also help IFAC's PAIB Committee to consider specific public sector aspects when developing International Good Practice Guidance for professional accountants in business.

The survey received 250 responses from public sector organizations at all levels of government and in a variety of sectors, including local councils, public utilities and various ministries from countries all over the world. The survey results clearly demonstrate that respondents are much more satisfied with the performance measurement structures in the public sector entities for which they completed this survey, if these structures possess the following, more advanced elements:

• A balanced combination of relevant financial and non-financial objectives, supported by specific measurement indicators (financial and non-financial KPIs);
• Accrual accounting for the budgeting, the (legislative) appropriation and the financial reporting processes;
• Capability for capturing, processing and reporting useful information on both financial and non-financial developments;
• Independent external review of the figures to report on financial and non-financial performance;
• A formal structure for measuring and assessing risk, and developing strategies to control it; and
• A regular review to ensure that the performance measurement structure remains effective and efficient.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

The staff of the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), has released a Clarity Project Update to help those with responsibilities relating to audits of financial statements set in motion plans to ensure that audits are effectively carried out under the clarified International Standards on Auditing (ISAs) when the standards come into effect.

In December 2008 the IAASB expects to complete its 18-month program to comprehensively review all ISAs and International Standards on Quality Control (ISQCs) to improve their clarity and, thereby, their consistent application. The standards approved in December are scheduled to be submitted to the Public Interest Oversight Board (PIOB) in February 2009, and if cleared by the PIOB, the program will be brought to a final conclusion then. The completion of this program, known as the IAASB Clarity Project, will result in 36 ISAs drafted in accordance with the IAASB's Clarity conventions subject to a single statement of authority, which will come into effect for audits of financial statements for periods beginning on or after December 15, 2009.

"In most cases of annual financial statements for a full 12 month year, the clarified ISAs will apply to audits of financial statements for periods that end after December 15, 2010. This may seem a long way off, but there is much to be done to ensure that implementation of the standards is smooth and that audits will be effectively carried out in accordance with them," states John Kellas, IAASB Chairman. Mr. Kellas continued, "All of the ISAs include improvements to enhance their understandability, and a significant number of them also include, as a result of their revision, substantive new requirements that aim to improve practice in a variety of respects. Accordingly, national standards setters, legislators and others involved in setting standards, IFAC members and associates, regulators, and accounting firms need to take such steps as are necessary for effective implementation, including national adoption, translation, amendment of manuals and processes and training. I urge everyone, therefore, to get ahead with preparations to ensure that implementation of the clarified standards is a success and that their benefits are achieved from the start."

This latest Clarity Project Update indicates the status of the clarified ISAs and clarified ISQC 1 as of October 2008 and where these documents can be accessed on the IAASB website. This staff report also provides an overview of the main changes to the ISAs arising from the Clarity Project, and highlights some of the matters to be considered as jurisdictions implement the clarified standards. It also lists the clarified standards published to date. The update may be downloaded from the Resources section of the IAASB website.

The IAASB plans to publish the set of clarified ISAs in IFAC's 2009 Handbook of International Standards on Auditing and Assurance, expected to be released in April 2009.

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

IFAC 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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Federation of Accountants (IFAC) supports recent moves by the International Accounting Standards Board (IASB) to contribute to greater consistency in financial reporting and to work towards convergence of international standards, an objective which IFAC views as critical to the efficient operation of global capital markets.

While accepting the value of moving rapidly to remove differences in the application of fair value accounting in different jurisdictions, IFAC strongly opposes attempts to change more radically, or to suspend, the use of fair value accounting without adequate due process. In particular, IFAC considers that making changes at a national or regional level that exacerbate reporting differences would serve to further confuse financial markets and would result in a reduction of confidence in financial reporting - exactly the opposite of what is required in current circumstances. "Reducing transparency is not the answer," says IFAC President Fermín del Valle, "and it will not serve the interests of investors."

IFAC believes that the additional guidance given to those applying both accounting and auditing standards relating to fair values has been very valuable and will contribute to the public interest through more consistent application of the standards. This guidance has come from the IASB and the United States Financial Accounting Standards Board, as well as from the International Auditing and Assurance Standards Board in its Staff Audit Practice Alert, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment.

IFAC and its independent standard-setting boards are continuing to monitor the impact of the credit crisis and will consider whether further guidance is needed.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business. For more information about IFAC, visit its website at www.ifac.org.

Over 60 partners from 21 international networks of accounting firms met yesterday to share their experiences, industry insights and current practices for audits of financial institutions at a symposium on the Audit of Financial Institutions organized by the Forum of Firms.  Several panels of experts were assembled with the support of the six large networks to lead discussions on various topics including valuation and impairment, liquidity, market confidence, and going concern.

"This event was an initiative by the Forum of Firms to examine current practice in addressing the auditing and financial reporting issues resulting from the current events in the market and to consider the International Auditing and Assurance Standards Board (IAASB's) latest guidance in this area," states David Devlin, Symposium Chair.

The symposium included a review of current accounting and auditing guidance issued in response to the credit crisis.  Symposium participants noted particularly the IAASB's new Staff Audit Practice Alert - Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment.  This is relevant to audits of all entities that have investments in financial instruments, especially those in illiquid markets.

The symposium concluded with a discussion of specific auditing responses appropriate in audits of financial statements of financial institutions.  These include the importance of strong risk management and transparent disclosure for restoring market confidence as well as heightened sensitivity to going concern issues.

 "This symposium was designed to disseminate good practice in an area of critical importance in today's environment and to support the Forum's members in providing the highest quality audit services to their clients and the public," points out David Maxwell, chair of the Forum of Firms.

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 Federation of 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.

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

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.