IAASB’s new and revised suite of quality management standards:
International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
ISQM 2, Engagement Quality Reviews
International Standard on Auditing (ISA) 220 (Revised), Quality Management for an Audit of Financial Statements
Conforming and Consequential Amendments to Other ISAs Arising from the Quality Management Project
Conforming and Consequential Amendments to the IAASB’s Other Standards as a Result of the New and Revised Quality Management Standards
International Standard on Related Services (ISRS) 4400 (Revised), Agreed-Upon Procedures Engagements
The following standards, which are not yet effective for this version of the handbook, have been included in the back of Volume 1:
ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)
Conforming and Consequential Amendments to Other International Standards arising from ISA 600 (Revised)
Volumes 1, 2 and 3 of the handbook can be downloaded from the IAASB website, where users can also order print copies of the three-volume handbook.
The vendor for the e-International Standards (eIS) online platform is experiencing technical difficulties in finalizing the IAASB eIS handbook. In the interim, please refer to the PDF versions of the handbook. We apologize for any inconvenience caused.
The International Public Sector Accounting Standards Board® (IPSASB®), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world, has published an updated chapter of its Conceptual Framework, which establishes the concepts that are applied in developing IPSAS and Recommended Practice Guidelines (RPGs) and are applicable to the preparation and presentation of public sector entities’ general purpose financial reports. The Conceptual Framework enables the IPSASB to ensure the consistency of its standard-setting by strengthening the linkage between IPSASs. Additionally, the transparency of the concepts underpinning the development of IPSASs and RPGs enhances the IPSASB’s accountability.
The updated chapter, Chapter 3, Qualitative Characteristics, completes the limited scope project to improve its Conceptual Framework for Financial Reporting by Public Sector Entities, which also included:
Chapter 5, Elements in Financial Statements
Chapter 7, Measurement of Assets and Liabilities in Financial Statements
The updated chapters have been informed by the IPSASB’s experience using the Conceptual Framework since its approval in 2014, and by global developments, notably the International Accounting Standards Board’s publication of a revised Conceptual Framework for Financial Reporting in 2018.
“As the IPSASB enters its next strategic phase, the Conceptual Framework will continue to be a cornerstone of the IPSASB’s literature,” said IPSASB Chair Ian Carruthers. “These changes strengthen the Conceptual Framework and reinforce its relevance to both our financial reporting and new sustainability reporting activities.”
The updated Chapter 3 includes guidance on prudence, which is not a separate qualitative characteristic in its own right and adds ‘obscuring’ information to ‘misstating’ and ‘omitting’ information as a factor relevant to materiality judgments. The addition of ‘obscuring’ is an acknowledgement that, for example, voluminous disclosures of immaterial items can have an adverse impact on the usefulness of financial reports.
The updated Chapter 5 includes revised definitions of an asset and a liability. Guidance on these definitions has been restructured to better align with the components of the definitions, making it more user-friendly. There are also new sections on unit of account and executory contracts that are equally unperformed by both parties.
The IPSASB has fully revised Chapter 7 to streamline measurement concepts by eliminating unused measurement bases and focusing on the most commonly used measurement bases. The new subsequent measurement framework explains how the various measurement components applied to estimate the value of an asset or liability interact.
The updated chapters of the Conceptual Framework became effective for the IPSASB when published.
How to Access
To access the updated Conceptual Framework chapters, the summary At-a-Glance document, webcast and a related Staff Questions and Answers document visit the IPSASB website. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of these pronouncements to their members and employees.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
Conceptual Framework updates are effective when published. They are non-authoritative.
The International Public Sector Accounting Standards Board® (IPSASB®), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world has opened a consultation to hear stakeholder feedback on its proposed strategy and work program for the next five years.
The IPSASB’s work during 2019-2023 has addressed key gaps in the IPSAS literature which now allows for a rebalancing of its Financial Reporting Work Program towards the maintenance of IPSAS. The IPSASB proposes to put a post-implementation review process in place and to establish an Application Panel to support not only existing IPSAS users but the much larger group of stakeholders expected to be using the IPSASB Standards by 2030. The new strategy assumes that the IPSASB moves ahead with its decision to develop International Public Sector Sustainability Reporting Standards, an initiative begun in 2023 to help equip governments and other public sector entities to provide better transparency, accountability, and comparability of their efforts to combat the climate crisis and other sustainability challenges.
The proposed strategic objective of the IPSASB’s Strategy and Work Program 2024-2028 is:
Strengthening Public Financial Management and sustainable development globally through increasing adoption and implementation of accrual IPSAS and International Public Sector Sustainability Reporting Standards.
"Having achieved so much during the 2019-2023 Strategy period, despite the major challenges we have all faced, the IPSASB has reached an inflection point,” said IPSASB Chair Ian Carruthers. “This exciting new phase of the IPSASB’s work will build on the hard work of the Board to implement the current strategy, as well as the sustained input from all our stakeholders.”
This Consultation provides an opportunity for constituents to comment on the IPSASB’s proposed Strategic Objective, and the two main activities to deliver on the Strategic Objective. In addition to the proposed new maintenance activities and the priorities for these, constituents are also asked to comment on potential future Financial Reporting Work Program priorities, and what the key public sector sustainability reporting issues are the IPSASB should consider adding to its Work Program. Stakeholders should submit responses by February 15, 2024 to ensure their views are considered.
How to Comment To access the Consultation and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website. Comments are requested by February 15, 2024. The IPSASB encourages IFAC member organizations and regional accountancy organizations to promote the availability of this Consultation to their members and employees.
About the IPSASB The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
The International Auditing and Assurance Standards Board (IAASB) has released amendments aimed at bolstering transparency and providing auditors with a clear mechanism to action changes to the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants (including International Independence Standards). The IAASB amended International Standard on Auditing 700 (Revised), Forming an Opinion and Reporting on Financial Statements and ISA 260 (Revised), Communication with Those Charged with Governance.
The IESBA Code now requires firms to publicly disclose when a firm has applied the independence requirements for public interest entities in an audit of the financial statements of an entity. The IAASB’s amendments provide a clear and practical framework for implementing this new requirement through appropriate communication in the auditor’s report and with those charged with governance.
Throughout the development of these amendments, the IAASB maintained close collaboration and coordination with IESBA, striving to align key concepts in the IAASB’s and IESBA’s standards, to the greatest extent possible.
The revisions relating to (a) the definition of engagement team, and (b) group audits. The revisions deal with the independence and other implications of the changes made to the definition of “engagement team” in the Code to align with changes to the definition of the same term in the IAASB’s International Standards on Auditing (ISAs) and International Standards on Quality Management (ISQMs). The revisions also address holistically the various independence considerations in an audit of group financial statements. The revised provisions relating to the definition of engagement team and group audits will be effective for audits of financial statements and audits of group financial statements for periods beginning on or after December 15, 2023. Early adoption of the revisions is encouraged.
The upcoming expiry of the “jurisdictional provision” addressing long association of personnel with an audit client. The jurisdictional provision will expire and be no longer available for audits of financial statements for periods beginning on or after December 15, 2023. Under the jurisdictional provision (paragraph R540.20 of the Code), where a legislative or regulatory body (or organization authorized or recognized by such legislative or regulatory body) has established a cooling-off period for an engagement partner of less than five consecutive years, that shorter cooling-off period may be applied, subject to a floor of three years, provided that the applicable time-on period does not exceed seven years.
The back of the 2023 Handbook contains the IESBA-approved revisions to the Code, which are not yet effective. These revisions will become effective in December 2024 and include:
Changes to the definitions of “audit client” and “group audit client” in the Glossary arising from the approved revisions to the definitions of listed entity and PIE.
Reproducing and Translating the IESBA Handbook To help adoption and implementation of the IESBA standards, stakeholders are invited to submit requests for permission to reproduce or translate the IESBA Handbook online via the Online Permissions Requests or Inquiries system on the IFAC website.
The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting high-quality, international ethics (including independence) standards as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information that is fundamental to the proper functioning and sustainability of organizations, financial markets and economies worldwide.
Fresh research from the International Federation of Accountants (IFAC) expands its sustainability disclosure and assurance data to 20 additional jurisdictions beyond the G20 previously reported on. The new report, The State of Play: Beyond the G20, focuses on the Global South with data from three jurisdictions from Latin America, six in Africa and Middle East, and four in the Asia-Pacific region, as well as six smaller-sized economies within the European Economic Area and Switzerland.
IFAC CEO Kevin Dancey said, “When viewed in full, the State of Play series of reports now provide data on the current market practices of nearly 2,000 of the largest stock exchange-listed companies across forty-two jurisdictions over the period 2019 through 2021. This broader lens on disclosure and assurance makes it even more clear that we are still in the early stages of the journey to provide investors and other stakeholders with consistent, comparable, decision-useful, and assured sustainability information that is as reliable as financial information.”
While the data shows an upward trend in the incidence of assurance, the scope of assurance being obtained by companies is narrowing. Additionally, fragmentation in terms of which assurance standard is used is evident. The International Auditing and Assurance Standards Board’s recently proposed sustainability assurance standard—International Standard on Sustainability Assurance 5000—addresses both of these issues. The International Ethics Board for Accountants is also working to enhance independence and ethics requirements to support high-quality assurance.
As governments, regulators and policy makers around the world are turning their attention to new sustainability requirements, IFAC is conducting this and other research to help raise awareness about the need for high-quality sustainability information and foster evidence-based policy and regulatory decisions, both of which are aligned with its commitment to the adoption of ISSB standards and the ISSB’s Partnership Framework.
Additional Key Findings
89% of companies reviewed reported some ESG information in 2021, with 48% of those companies receiving some level of assurance.
Sustainability disclosure—in the G20 as well as beyond the G20—is still an “alphabet soup” of standards and frameworks. However this study found more connectivity between sustainability and financial information, with only 19% of companies relying on stand-alone sustainability reports, compared to 50% for the G20 (as reported in The State of Play: Sustainability Disclosure & Assurance 2019-2021, published in partnership with AICPA-CIMA).
Assurance rates have risen from 37% to 48%, but engagements cover a narrowing set of topics.. Specifically, broader scope assurance has declined from 74% in 2019 to 64% of engagements in 2021.
Most assurance engagements were conducted by audit firms—62% of assurance engagements in 2021.
81% of these assurance engagements applied the IAASB’s International Standard on Assurance Engagement 3000.
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 180 members and associates in more than 135 jurisdictions, representing millions of professional accountants in public practice, education, government service, industry, and commerce.
Data from the Global South Demonstrates Need for ISSB Global Baseline Disclosure Requirements as Well as Broader Scope Assurance
The International Public Sector Accounting Standards Board (IPSASB), developer of IPSAS®, international accrual-based accounting standards for the public sector, announced its new and reappointed Board members and Deputy Chair for 2024, as well as the extension of its Chair through 2025.
The new IPSASB appointees have been selected following a rigorous nominations and interview process involving the IFAC Nominating Committee and IPSASB leadership, overseen by the Public Interest Committee and approved by the IFAC Board. The 2024 Board will continue to be a diverse, woman-majority group, with exceptional public sector accounting experience from around the world.
The new Board members are:
Angela Ryan, New Zealand
Yacouba Traoré, Burkina Faso
The following three current Board members have been reappointed:
Hervé-Adrien Metzger, France
Mari Kobayashi, Japan
Renée Pichard, Canada
In addition, Scott Showalter of the USA has been reappointed as IPSASB Deputy Chair for 2024.
“For the third year in 2024, the IPSASB will be a board comprising a majority of women,” said IPSASB Chair Ian Carruthers. “Diversity of Board membership is essential to ensure the delivery of high-quality standards that can strengthen public financial management globally. The appointment of a Board member from Francophone Africa will be critical to bringing this regional perspective directly into our work for the first time.”
The tenure of the IPSASB’s independent Chair, Ian Carruthers, has been extended for a final year through 2025.
This allows Mr. Carruthers to continue to lead the Board in its important work addressing accrual-based financial reporting issues in the public sector, at the same time as it advances into the new space for the Board in developing public sector sustainability standards. Under his leadership, the IPSASB will continue to advance its ambitious standard-setting agenda and stay on the front-foot in expanding its global impact.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
IPSASB Welcomes Two New Members and Extends Chair for a Final Year
The Public Trust in Tax survey which questioned 7,700 members of the public across the globe shows that accountants have a major role to play in addressing corruption, which negatively impact on attitudes towards tax in economies across the globe.
Results show that 53.8% consider corruption a major factor, however most people believe the role of professional accountants contributes to improving tax systems by making them more efficient (59%), more effective (57%), and fairer (55%).
The findings follow ACCA (the Association of Chartered Certified Accountants), IFAC (the International Federation of Accountants), and CA ANZ (Chartered Accountants Australia and New Zealand) expanding their biennial G20 Public Trust in Tax survey – which this time omitted Russia and included New Zealand – to address not only corruption but also the issues of sustainable development and corruption, and how these two interconnect with trust in the tax system. The results are clear.
Corruption has a significant impact on attitudes towards tax in economies across the globe, with over half of G20 respondents citing it as a major factor.
At the same time, 68% of respondents in G20 countries see at least some connection between tax and sustainable development, and 57% would be prepared to pay more tax to support it.
In this context, the continued high levels of trust in professional accountants are more important than ever. The results shows that they remain the single most trusted stakeholder in tax in every G20 country, as it has been the case in every biennial G20 Public Trust in Tax survey since the initiative began in 2017.
Kevin Dancey, CEO of IFAC, says: “The impact of corruption on trust in tax has been an emerging theme in our recent surveys, particularly in our 2022 Global Perspectives report, which focuses on jurisdictions outside of the G20. Now, for the first time, we have specific data on that point, and the results are illuminating. Taken together with the continued trust in professional accountants, and additional new data on views about sustainable development, insight into the important interconnections between these issues is starting to come into view.”
Helen Brand, chief executive of ACCA, says: ‘Throughout the course of these surveys, public unease about how tax moneys are spent has been a constant theme in respondents’ comments. Perceptions of corruption are a clear barrier to engagement with the tax system. Accountants have a central role to play in countering corruption, bringing transparency and accountability to the collection and spending of taxes across both public and private sectors.’
Ainslie van Onselen, CEO of Chartered Accountants Australia and New Zealand (CA ANZ), says: ‘As leaders in the global accountancy profession, we are proud to see the sustained high levels of trust in professional accountants, which is hard won, but easily lost. It is vital that we constantly work to maintain and earn trust through both our individual and collective actions. Now, more than ever, the relationship between taxpayers, businesses and governments must be strengthened to provide security and certainty for our broader societies and economies and we look forward to continuing to engage with key stakeholders to drive trust in tax and trust in our profession.’
The survey reveals the attitudes and opinions of the general public towards their tax systems, and the actors involved in them. The key findings indicate that:
Trust in key stakeholders has improved in most regions, but there are still significant variations;
People see tax systems as a mechanism for positive change, but are concerned about corruption;
People generally think that levels of taxes paid are reasonable.
This year’s survey is launched on 14 September at an online event hosted by IFAC, ACCA and CA ANZ. Register here.
Editor’s Notes
The study is based on an online survey, conducted in the second quarter of 2023, of more than 7,700 individuals across all the G20 countries apart from Russia, plus New Zealand. The sample in each country is balanced by demographics based on census data, including age (targeting individuals of taxpaying age), education, gender, ethnicity, household income levels, and geographic location within the country.
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 180 members and associates in more than 135 jurisdictions, representing millions of professional accountants in public practice, education, government service, industry, and commerce.
About ACCA
We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide.
Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 247,000 members and 526,000 future members in 181 countries.
Our forward-looking qualifications, continuous learning and insights are respected and valued by employers in every sector. They equip individuals with the business and finance expertise and ethical judgment to create, protect, and report the sustainable value delivered by organisations and economies.
Guided by our purpose and values, our vision is to develop the accountancy profession the world needs. Partnering with policymakers, standard setters, the donor community, educators and other accountancy bodies, we’re strengthening and building a profession that drives a sustainable future for all.
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand represents more than 136,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action. Find out more at www.charteredaccountantsanz.com.
Accountants remain the most trusted players in tax according to the ACCA, IFAC and CA ANZ biennial global survey.
As the global voice of the accountancy profession, IFAC has long supported the establishment of the International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of sustainability disclosures—which are now endorsed by IOSCO and are ready to be adopted and implemented around the world. High-quality implementation of IFRS S1 and IFRS S2 is critical to the ISSB’s mission.
We congratulate the ISSB for addressing “climate first” with IFRS S2 and also delivering IFRS S1 requirements for broader disclosure of investor-focused information about sustainability-related risks and opportunities. Next, companies need a global baseline for a holistic, narrative analysis of how reporting entities create, preserve, or erode value over time, including how sustainability disclosures are connected to financial position and performance.
IFAC CEO Kevin Dancey said, “Our research clearly shows that companies are moving away from stand-alone sustainability reports—at least in terms of timing and same location. Investors need a consistent, comprehensive view, and companies need a timely pragmatic solution to the connected reporting issue. The <IR> Framework that is commonly used to provide up front narrative information coupled with the IASB’s prior work on Management Commentary provide a constructive roadmap for the two boards to move with pace, just like they did with S1 and S2, to develop a new template for explaining how a company creates sustainable value.”
The ambition and momentum demonstrated by the ISSB since it was announced at COP 26 must continue, and we urge the Board to use the results of this agenda consultation to set out a clear timeline for addressing additional sustainability topics including biodiversity and human capital/rights issues.
IFAC continues its call on the global accountancy profession to work with local regulators and stakeholders to support the adoption of ISSB standards, to help build capacity for their implementation alongside any local complementary reporting requirements, and to continue to contribute our expertise and feedback to the ISSB as its important standard setting work continues.
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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
1. Amplified Engagement through Stakeholder Survey: Recognizing the diverse perspectives and levels of expertise within our stakeholder community, an alternative avenue for feedback has been developed. In addition to the comprehensive Explanatory Memorandum and Response Template, the IAASB has created a stakeholder survey. This user-friendly tool allows the IAASB to obtain the views of stakeholders who may not ordinarily respond to IAASB consultations, including preparers of sustainability information, those with the oversight of its preparation, investors and other users of the sustainability information, sustainability reporting standard setters and members of the academic community. Survey responses will be aggregated and analyzed in conjunction with other feedback received.
2. Webinars for Enhanced Understanding: Learn more about ISSA 5000 at these dedicated IAASB webinars for practitioners and regulators, offered at two different times to allow for global participation.
Dates & Times: September 6, 1-2:30 pm ET and September 7, 8-9:30 am ET
IFAC Sustainability Summit–Asia Pacific: A collaborative endeavor with the ASEAN Federation of Accountants, Confederation of Asian and Pacific Accountants, South Asian Federation of Accountants, and Jeju Group.
Dates & Times:
September 27, 8:30-10:30 am Mumbai / 1:00-3:00 pm Melbourne / 10:00 am-12:00 pm Jakarta / 11:00 am-1:00 pm Singapore / 12:00-2:00 pm Tokyo / 4:00-6:00 am London / 11:00 pm-1:00 am New York
September 28, 10:30 am-1:00 pm Mumbai / 3:00–5:30 pm Melbourne / 12:00-2:30 pm Jakarta / 1:00-3:30 pm Singapore / 2:00-4:30 pm Tokyo / 6:00-8:30 am London / 1:00–3:30 am New York
