The FAQ compilation addresses a variety of questions, including how the concept of materiality applies to sustainability reporting and assurance; the definition of double materiality; and how an assurance practitioner considers an organization’s “materiality process” during a sustainability assurance engagement, among other questions and answers.
The comment period for proposed ISSA 5000 is open until December 1, 2023. To promote broad and diverse participation in the ongoing public consultation, the IAASB has developed a Stakeholder Survey, which may be especially useful for stakeholders wishing to share less technical or overall feedback, and a Response Template.
For further details and updates, visit the IAASB website: iaasb.org/ISSA5000
The Q&A publication is designed to highlight, illustrate, or explain aspects of the revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement. It will assist firms, national standards setters, and professional accountancy organizations in adopting and/or implementing the revisions. The Q&As will also assist regulators and audit oversight bodies, the corporate governance community, investors, preparers, educational bodies or institutions, and other stakeholders in understanding the revisions to the Code.
The development of the Q&As has been informed by the IESBA’s extensive discussions and consultations with a wide range of stakeholders and the IESBA’s own deliberations during the development and finalization of the pronouncement.
The pronouncement is coming into effect for audits of financial statements and group financial statements for periods beginning on or after December 15, 2023, with early adoption permitted.
Artificial intelligence (AI) and intelligent automation (IA) are creating significant opportunities for organizations and individuals and are shaping the future of professional accountants as leaders and business partners.
Digital transformation based on intelligent automation can drive business growth and customer and employee satisfaction.
To provide in-depth insights about AI and IA and consider their impact on the work of accounting and finance professionals, IFAC’s Professional Accountants in Business (PAIB) Advisory Group received a presentation from Pascal Bornet, IA pioneer and CPA, and have shared a recording and takeaways from the discussion.
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.
Disrupting Business; Elevating the Work of Accounting & Finance Professionals
ED 85 proposes minor improvements to accrual basis IPSAS that arise through publications of the International Accounting Standards Board (IASB). The proposals in this exposure draft may be modified in light of comments received before being issued in final form. Comments are due by December 18, 2023 and must be submitted in English.
Across the globe momentum is building for sustainability reporting and assurance in the public sector. The IPSASB decided to move forward with the development of public sector specific sustainability reporting standards beginning with a Climate-Related Disclosures standard. Finance and audit professionals working in government, public sector bodies and supreme audit institutions – Auditors-General’s offices, Courts of Accounts and similar (SAIs) – can demonstrate leadership on this agenda, driving action to progress transparent reporting and assurance of expenditure and actions to address sustainability challenges.
At the World Investment Forum in Abu Dhabi on 16th October three global bodies, ACCA, IFAC and IDI launched a summary of their forthcoming introduction to sustainability and assurance in the public sector.
Based on their ongoing work and recent global roundtables with public sector reporting and auditing experts, the report makes the case for a focus on the principle of sustainable development: "meeting the needs of the present without compromising the ability of future generations to meet their own need." It outlines what sustainability reporting and assurance mean for the public sector, why they are important, and key principles for governments, SAIs and other public sector bodies to consider in this journey.
Speaking at the ACCA/UN symposium on developing public sector sustainability reporting, Maggie McGhee, Executive director for Strategy and Governance at ACCA said, "A sustainable future for all is a primary concern across government activity. At the same time governments play a critical role in establishing good governance: the institutional, policy and regulatory frameworks in which society operates. So governments and other public sector bodies need to be able to measure and report on how their policies and expenditure are addressing sustainability challenges."
Laura Leka, Principal and public sector lead at IFAC said, "Policymakers and other stakeholders, including the public, need information to understand the sector’s impact on sustainable development. It’s important that sustainability reporting provides disclosures that are high-quality, decision-useful, and prepared in accordance with internationally recognized reporting and disclosure standards."
As sustainability reporting develops, independent external assurance will become increasingly necessary to build trust in the information being disclosed. Roundtable participants saw SAIs taking the lead, building on their experience auditing progress towards sustainable development.
Archana Shirsat, Deputy Director General at IDI, said, "SAIs have a central role to play in providing independent and objective oversight on sustainability information generated by the public sector. Determining appropriate forms of assurance or confidence, engaging with stakeholders and developing auditor competencies to audit sustainability information is important to build public trust."
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.
The INTOSAI Development Initiative (IDI) is an autonomous implementing body that is not-for-profit. Its mandate is to provide support to Supreme Audit Institutions (SAIs) in developing countries to enhance their performance and capacity in a sustainable manner. The work done by IDI is based on the needs and challenges experienced by SAIs. The support provided is focused on a needs-based and sustainable approach. IDI seeks to empower SAIs by promoting gender-responsiveness and peer-to-peer cooperation as essential elements of long-term capacity development.
In each country, there is a Supreme Audit Institution that is tasked with auditing public funds to ensure that it is an effective, accountable, and inclusive institution. IDI is convinced that its contribution to strengthening Supreme Audit Institutions can make a difference in the lives of citizens for several reasons. Firstly, government audits are key components of effective public financial management and good governance. Secondly, SAIs contribute to the quality of government engagement and better state-society relations through their work. Lastly, SAIs are key stakeholders in supporting the implementation of Sustainable Development Goals (SDGs).
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.
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.
