At its meeting last week in New York City, the Board of the International Federation of Accountants (IFAC) agreed to assist the International Accounting Standards Board (IASB) in obtaining feedback on its proposed International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs)through field testing and other means. In addition, it agreed to strengthen collaboration with regional accountancy organizations to encourage greater alignment with the IFAC strategy. The Board also discussed the need to more effectively engage various stakeholders in the convergence process, work more closely with the investment community, proactively address small and medium practice (SMP) and SME issues, and communicate more consistent global messages about the value and integrity of the profession. An approach for translating key sections of the IFAC website was also approved. During the meeting, Professor Stavros Thomadakis, Chairman of the Public Interest Oversight Board (PIOB), commented on the PIOB's progress in overseeing IFAC's public interest activities and expressed its satisfaction to date with the cooperation it is receiving from IFAC and its independent boards. A major portion of the meeting was devoted to strategic planning issues. As part of that process, regulatory, standard setting and business leaders provided insights and views to help shape the Board's priorities and future agenda. Guest speakers were:

• Mark Olson, Chairman of the U.S. Public Company Accounting Oversight Board (PCAOB), who highlighted the importance of standards setters, such as the PCAOB and the International Auditing and Assurance Standards Board, continuing to closely monitor each other's work and agendas;
• Professor Robert Kaplan of the Harvard Business School and co-author of the Balanced Scorecard, who spoke on the implications of the balanced scorecard for enhanced business reporting; and
• Paul Pacter, IASB Director of Standards for Small and Medium-sized Entities, who outlined the proposed IFRS for SMEs.

Among other matters, Mr. Pacter urged all Board members and regional accountancy organizations to encourage responses from their respective constituencies on the proposed standard and perceived challenges to its adoption. IFAC President Fermín del Valle stated, "IFAC is highly supportive of this project and recognizes the considerable progress made. To ensure that the final standard meets the needs of the SMP/SME marketplace, it is crucial that IFAC and its members help the IASB seek out and capture the views of all relevant constituents, primarily SMEs, SMPs, and users of SME financial statements." The Board meeting followed a meeting with more than 30 chief executives of national accounting organizations in over 25 countries, which was designed to bring those organizations' perspectives to the deliberations of IFAC's planning. 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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It 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) invites its members and associates to submit outstanding published articles on topics of interest to accountants in business for its 2007 Articles of Merit Award for distinguished contribution to the development of the role and domain of the professional accountant in business.

The Articles of Merit Award is designed to facilitate communication and the sharing of knowledge on key financial and management accounting topics among IFAC's member bodies and their members in business. From among the articles submitted by member bodies, the PAIB Committee will select approximately 10 winning articles that will be published in an information paper, Articles of Merit: 2007. Articles selected for publication are those that have made or will make a distinct and valuable contribution to the advancement of PAIBs.

The annual Articles of Merit publications are widely distributed and read, providing a means for member bodies, authors, and the journals in which the articles are published to obtain recognition worldwide. A press release announcing the award winners is sent to all IFAC members, associates, and regional accountancy bodies, as well as the international media, who may download the publication free of charge from the IFAC website.

In addition, PAIBs worldwide are notified through IFAC's electronic news vehicles. In 2006, nearly 5,000 copies of past Articles of Merit publications were ordered or downloaded by accountants in business and other professionals worldwide from the IFAC website.

How to Nominate Articles
Members and associates are encouraged to nominate up to three articles for the 2007 Articles of Merit. All submissions must be in English and must be received by the PAIB Committee staff no later than April 20, 2007. For more information on how to submit articles, see the 2007 Articles of Merit Call for Nominations which is posted in the Discussion Board on the IFAC MemberNet.

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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

United Nations (UN) System organizations are recruiting a number of candidates to assist in the implementation of International Public Sector Accounting Standards (IPSASs). Candidates for these positions must possess relevant experience in implementing international accounting standards or applying "IPSAS similar" standards within a public sector or international organization. Public sector accountants with experience in preparing accrual financial statements would also be of interest. Announcements on open positions are available from the UN Human Resources website. One such open position is the Finance and Budget Officer, which can be accessed on this site under occupational group "Finance," Vacancy Announcement # 412519. For more information, visit the UN website.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, is seeking nominations for members of its boards and committees for 2008. IFAC member bodies, members of the Forum of Firms and, in some instances, members of the public may nominate candidates by April 15, 2007. All members of IFAC boards and committees are expected to act in the public interest and must sign a declaration committing to act with integrity and in the public interest in their role within IFAC.

Public Members Sought
Individuals, organizations, accountancy firms, and IFAC member and regional bodies may submit nominations for the following public member positions on IFAC's independent standard-setting boards. Two public members are sought for the International Accounting Education Standards Board. One public member is sought for the International Ethics Standards Board for Accountants. And one public member is sought for the International Public Sector Accounting Standards Board. Public members must be seen to be independent of any special interests and seen to be acting to represent society as a whole. Nominees for the public member positions must have an appropriate level of knowledge about the work of the respective standard-setting board, although they do not need to have a professional accountancy designation.

Member Body Nominations
In addition to nominating public members, described above, IFAC member bodies may nominate additional candidates for membership on the IFAC Board, all independent standard-setting boards, the Compliance Advisory Panel, the Developing Nations Committee, the Professional Accountants in Business Committee, the Small and Medium Practices Committee, and the Nominating Committee. Member bodies may submit more than one nomination for each respective board and committee, and they are encouraged to nominate candidates with varying backgrounds.

Forum of Firms' Nominations
Five positions on the Public Interest Activity Committees are open to nominations from members of the Forum of Firms, an organization of international firms that perform audits of financial statements that are or may be used across national borders. Two positions are open on the International Auditing and Assurance Standards Board. Two positions are open on the International Accounting Education Standards Board. And one position is open on the International Ethics Standards Board for Accountants.

How to Submit Nominations
The Call for Nominations for IFAC Boards and Committees in 2008 describes the positions available on IFAC boards and committees and the qualifications required for each position as well as the process for submitting nominations. The Call for Nominations may be viewed on IFAC's website. All nominations must be submitted by April 15, 2007 using the online Candidate Information System, which can be accessed online. For more information on the role and activities of each of IFAC's boards and committees, visit its 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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued revised standards to increase the clarity and usability of International Public Sector Accounting Standards (IPSASs). The 11 revised accrual basis IPSASs and a revised Preface to International Public Sector Accounting Standards are a step towards the IPSASB's goal of achieving convergence.

IPSASs set out the financial reporting requirements by governments and other public sector entities. The IPSASB aims to converge IPSASs with International Financial Reporting Standards (IFRSs), issued by the International Accounting Standards Board, while at the same time also considering public sector specific issues and reflecting public sector emphasis within the standards.

To help apply the IPSASs, the revised Preface to International Public Sector Accounting Standards clarifies that, from now on, all paragraphs within all IPSASs have equal authority.

"Global convergence of financial reporting standards remains one of the key objectives of IFAC and the IPSASB," states Mike Hathorn, IPSASB Chair. "Revising these IPSASs reflects the IPSASB's commitment to progress the IFRS convergence component of its work program, as well as address public sector specific issues not dealt with by IFRSs."

The 11 revised IPSASs are effective for reporting periods beginning on or after January 1, 2008.

The revised IPSASs and the revised Preface to International Public Sector Accounting Standards can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. They will also be included in the 2007 edition of the Handbook of International Public Sector Accounting Pronouncements.

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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released International Public Sector Accounting Standards (IPSASs) which identify disclosures to be made by governments and other public sector entities that make their approved budgets publicly available. These disclosures will contribute greatly to improving accountability by helping readers to compare budget amounts with actual amounts arising from carrying out the budget.

A new standard, IPSAS 24, Presentation of Budget Information in Financial Statements, applies to entities that adopt the accrual basis of financial reporting. In addition, the cash basis IPSAS, Financial Reporting under the Cash Basis of Accounting, has been updated to include both required and encouraged disclosures that apply to entities that adopt the cash basis of financial reporting.

Both standards require that a comparison of budget and actual amounts for the reporting period be included in the financial statements. They also require explanations for material differences between the budget and actual amounts in the notes to the financial statements or in a separate report issued in conjunction with those statements.

"Reporting the actual amounts resulting from execution of budget against the approved budget and explaining the variance will enhance the transparency of financial statements," states Philippe Adhémar, immediate past Chair of the IPSASB who oversaw the development of the new standards. "Compliance with the standards enables public sector entities to better discharge their accountability obligations by demonstrating compliance with the approved budget for which they are held publicly accountable."

IPSAS 24 and Financial Reporting under the Cash Basis of Accounting can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. Both standards will also be included in the 2007 edition of the Handbook of International Public Sector Pronouncements.

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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education 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), has issued the first four final International Standards on Auditing (ISAs) redrafted as part of its comprehensive program to enhance the clarity of its standards. It has also approved amendments to the Preface to International Standards on Quality Control, Auditing, Review, Other Assurance and Related Services, which establishes the conventions to be used by the IAASB in drafting future ISAs and the obligations of auditors who follow those standards. A report developed by the IAASB staff on the status of the IAASB's clarity project was also released summarizing these and other developments. New ISAsThe IAASB has issued the following four redrafted standards:

• ISA 240, The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements;
• ISA 300, Planning an Audit of Financial Statements;
• ISA 315, Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment; and
• ISA 330, The Auditor's Responses to Assessed Risks.

The four redrafted ISAs and the amended Preface were exposed for public comment in October 2005. The IAASB refined its clarity drafting conventions based on the comments received to the exposure drafts and after extensive consultation with interested parties, such as the IAASB's Consultative Advisory Group and national auditing standard setters. In developing these final standards, the IAASB improved the consistency with which the conventions were applied to the ISAs and considered the need for them to be applicable to audits of entities of all sizes.

"The release of these final ISAs in the new drafting style represents an important milestone for the IAASB as it works to improve the clarity of its international standards," states John Kellas, IAASB Chairman. "The IAASB is satisfied that these four redrafted ISAs are clearer and the expectation of consistent application by professional accountants worldwide has been strengthened. We are now proceeding with the application of the clarity conventions to all the ISAs."

The four redrafted ISAs have a provisional effective date for audits of financial statements for periods beginning on or after December 15, 2008. While the final common effective date for all redrafted ISAs will be determined as the IAASB's agenda progresses, it will not be earlier than December 15, 2008. The amended Preface contains important statements about the authority of the IAASB's standards.

In order to embed these within the ISAs themselves, the IAASB intends to revise ISA 200, Objective and General Principles Governing an Audit of Financial Statements to incorporate relevant provisions of the amended Preface. When ISA 200 is revised and exposed for public comment in 2007, respondents will be invited to comment on the material derived from the amended Preface in that new context. Clarity Project Update Progress that the IAASB has made so far and the direction it plans to take as it continues to redraft standards is outlined in the report Status of the IAASB's Work to Improve the Clarity of Its Standards. This staff report describes the main changes to the IAASB's standards arising from the application of its clarity drafting conventions and explains the IAASB's approach to implementing the conventions to all ISAs. How to Access The four ISAs and the Preface may be downloaded free-of-charge from the IFAC online bookstore at https://www.ifac.org/store. They will also be included in the 2007 Handbook of International Auditing, Assurance, and Ethics Pronouncements. The status report on the clarity project may be downloaded from the IAASB's website at https://www.iaasb.org.

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 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 comprised of 155 members and associates in 118 countries, 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 Ethics Standards Board for Accountants (IESBA), an independent standard-setting board within the International Federation of Accountants (IFAC), has issued an exposure draft updating and strengthening the independence requirements contained in the IFAC Code of Ethics for Professional Accountants. The last substantive revisions to the Code were made in November 2001.

The changing environment in the past few years has led the IESBA to consider what revisions to auditor independence requirements might be needed. Over the two-year development period of the exposure draft, the IESBA consulted with interested stakeholders, including regulators, standard setters, leaders of accountancy organizations, and members of the profession. "Auditor independence is a critical cornerstone of financial reporting," states Richard George, IESBA Chair. "We believe that the proposed changes to the Code contain important provisions that we consider are appropriate to protect the public interest." Significant proposed modifications to the Code include:

• Expanding the applicability of partner rotation requirements;
• Updating requirements related to the provision of non-assurance services, including setting out additional guidance on the provision of tax services to audit clients; and
• Extending the independence requirements to the audits of a wider range of entities of significant public interest.

How to Comment
Comments on the exposure draft are requested by April 30, 2007. The exposure draft may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to edcomments@ifac.org. They can also be faxed to the attention of the IESBA Senior Technical Manager at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About the IESBA and IFAC
The IESBA develops ethical standards and guidance for use by professional accountants. It encourages member bodies of IFAC to adopt high standards of ethics for their members and promotes good ethical practices globally. The Public Interest Oversight Board oversees the activities of the IESBA and, as one element of that oversight, establishes the criteria for its due process and working procedures.

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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international standards of ethics through the IESBA, IFAC, through its independent standard-setting boards, sets auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

At its most recent meeting in London in December, the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), approved new proposals to enhance the written representations that auditors request from management, those charged with governance and others, as well as five new exposure drafts written in accordance with its new clarity drafting conventions.

Written Representations

The proposals, which are incorporated in proposed International Standard on Auditing (ISA) 580 (Revised and Redrafted), Written Representations, provide for general written representations regarding the financial statements, including internal control, and the completeness of information made available to the auditor, and for written representations about specific assertions in the financial statements. "The aim of this project was to improve the quality and appropriateness of written representations sought by the auditor and, in particular, to deal with concerns about whether auditors may over-rely on representations at the expense of other evidence," explains John Kellas, IAASB Chairman.

New Clarity Exposure Drafts

As part of its comprehensive program to enhance the clarity of international standards, the IAASB has also issued the following exposure drafts of proposed ISAs:

• ISA 230 (Redrafted), Audit Documentation;
• ISA 540 (Revised and Redrafted), Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures;
• ISA 560 (Redrafted), Subsequent Events;
• ISA 610 (Redrafted), The Auditor's Consideration of the Internal Audit Function; and
• ISA 720 (Redrafted), The Auditor's Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements.

Proposed ISA 540 (Revised and Redrafted) is a combination of ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures (Other Than Those Involving Fair Value Measurements and Disclosures) and ISA 545, Auditing Fair Value Measurements and Disclosures. The IAASB approved ISA 540 (Revised) in September 2006 as a basis for applying the clarity drafting conventions. As part of the redrafting of ISA 540 (Revised), the IAASB decided that the similarities between estimates and fair value information could be emphasized, and redundancy eliminated, by combining ISA 540 (Revised) and ISA 545 within the proposed revised and redrafted ISA 540.

"The proposed ISA 540 (Revised and Redrafted) will reinforce best practice and cause the auditor to give appropriate attention to areas of accounting judgment, such as assumptions, and to possible bias. The other proposed redrafted standards contain clear requirements and easy to understand application guidance," notes Mr. Kellas.

The exposure drafts form part of the IAASB's ambitious 18-month program to redraft existing standards and to develop new and revised standards following the new drafting conventions, which were developed after extensive consultation with interested parties, such as the IAASB's Consultative Advisory Group and national auditing standard setters, and public consultation. Key elements of the new drafting conventions include: basing each standard on the objective of the auditor with respect to the subject matter of the standard; separating the requirements that the auditor is required to follow from guidance on their application; eliminating the present tense to describe actions by the auditor, which raised ambiguity about whether such actions were required; and other structural and drafting improvements to enhance the overall readability and understandability of the standards. Standards redrafted in this way are described as "redrafted." If further revision has been undertaken, a standard is described as "revised and redrafted."

How to Comment

Comments on the exposure drafts of proposed redrafted ISAs 230, 560, 610 and 720 are requested by March 31, 2007. Comments on the exposure drafts of proposed ISAs 540 (Revised and Redrafted) and 580 (Revised and Redrafted) are requested by April 30, 2007. The exposure drafts may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to EDComments@ifac.org. They can also be faxed to the attention of the Executive Director, Professional Standards at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted of IFAC's website.

About the IAASB and IFAC The objective of the IAASB, an independent standard-setting board within IFAC, 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 the criteria for its due process and working procedures.

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 comprised of 155 members and associates in 118 countries, 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 Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released a new standard on reporting revenue from non-exchange transactions. This new standard will contribute greatly to enhancing the transparency of financial reporting by governments and other public sector entities. Taxes and transfers are the major source of revenue for most governments and other public sector entities. However, internationally agreed requirements for financial reporting of these revenues have not previously been developed.

IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), addresses a range of matters critical to government financial reporting of tax revenue, including the basis on which a wide range of taxes should be recognized and measured. It also deals with the other major source of non-exchange revenue for public sector entities - transfers, which include grants from other governments and international organizations, gifts and donations. In addition, the IPSAS establishes requirements on how conditions and restrictions on the use of transferred resources are to be reflected in the financial statements.

"IPSAS 23 is the culmination of four and a half years of intense work, debate and consultation by the IPSASB, which specifically solicited the input of experts in the field of governmental financial reporting throughout the world," states Philippe Adhémar, IPSASB Chair. "This new standard also represents a major achievement for the IPSASB in addressing public sector specific issues at a global level and in establishing an international benchmark for the financial reporting of taxes and transfers. Compliance with IPSAS 23 will enhance the quality, comparability and transparency of financial reporting by public sector entities around the world."

IPSAS 23 can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. It will also be included in the 2007 edition of the Handbook of International Public Sector Pronouncements.

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 comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high quality performance by professional accountants in business.