The International Ethics Standards Board for Accountants (IESBA) today released for public comment Exposure Draft, Proposed Revisions to Part 4B of the Code to Reflect Terms and Concepts Used in ISAE 3000 (Revised). Part 4B of the revised and restructured International Code of Ethics for Professional Accountants (including International Independence Standards) comprises the independence standards for assurance engagements other than audit and review engagements, as defined in the Code.

The proposed revision fulfills a pre-commitment the IESBA announced in its proposed Strategy and Work Plan, 2019-2023 to review Part 4B of the Code for any changes needed to make the provisions in that Part consistent with the revised assurance terms and concepts in the International Auditing and Assurance Standards Board’s International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

The proposals in the Exposure Draft include:

• Changes in key terminology, including a revised definition of the term “assurance client”;
• Enhanced and clarified independence requirements for attestation engagements;
• Clarification of the types of assurance engagement addressed in Part 4B; and
• Simplified guidance on assurance engagements that refer to the definitive source of explanatory material on such engagements in IAASB literature.

The proposals were developed in close cooperation with representatives of the IAASB, as part of the coordination program of the two standard-setting boards.

Comments on the Exposure Draft are requested by June 26, 2019 from all stakeholders.

About the IESBA
The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA serves the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust globally operable International Code of Ethics for Professional Accountants (including International Independence Standards).

The IESBA believes a single set of high-quality ethics standards enhances the quality and consistency of services provided by professional accountants, thus contributing to public trust and confidence in the accountancy profession. The IESBA sets its standards in the public interest with advice from the IESBA Consultative Advisory Group (CAG) and under the oversight of the Public Interest Oversight Board (PIOB).

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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

At a time of increasing momentum for IPSAS adoption and implementation globally, the International Public Sector Accounting Standards Board (IPSASB) today published its Strategy and Work Plan 2019-2023: Delivering Global Standards. Inspiring Implementation, which will shape the Board’s work and priorities for the next five years.

To ensure it delivers in the public interest, the IPSASB’s strategic objective is:

Strengthening Public Financial Management (PFM) globally through increasing adoption of accrual-based IPSAS. Delivered through two main areas of activity, both of which have a public interest focus:

• Developing and maintaining IPSAS and other high-quality financial reporting guidance for the public sector; and
• Raising awareness of IPSAS and the benefits of accrual adoption.

“Governments depend on the trust of their citizens and their national and international stakeholders in order to deliver their goals efficiently and effectively. The regular publication of high-quality accrual-based financial reports helps strengthen public financial management, and is a fundamental ingredient in maintaining that trust,” said IPSASB Chair Ian Carruthers.

“IPSAS-based information provides a comprehensive and comparable picture of a public sector entity’s financial performance and position. IPSAS adoption and implementation therefore represent fundamental steps for governments to take, not only to increase transparency and accountability to their citizens and stakeholders, but also to inform effective decision making, so contributing to fiscal stability and sustainability. Our new Strategy and Work Plan is intended both to support and to help inspire governments and other public sector organizations making that journey,” Mr. Carruthers added.

The IPSASB will implement its Strategy and Work Plan 2019-2023 through two streams:

• Delivering global standards by:
• Setting standards on public sector specific issues;
• Maintaining IFRS alignment;
• Developing guidance to meet users’ broader financial reporting needs;
• Inspiring their implementation by:
• Promoting IPSAS adoption and implementation; and
• Advocating the benefits of accrual in strengthening PFM.

The Board’s top standard-setting priorities through 2023 include completing its current public sector specific projects, notably revenue, leases, public sector measurement, heritage and infrastructure, as well as making progress with its new public sector specific projects, including natural resources.

The International Public Sector Financial Accountability Index projects that in five years, 65% of countries will report on the accrual basis. The IPSASB seeks to capitalize on this growth by working with key stakeholders to promote IPSAS adoption and implementation and the benefits of accrual information in strengthening PFM.   

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 governments of Canada and New Zealand. 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 Ethics Standards Board for Accountants^® (IESBA^®) is pleased to announce two 90-minute webinars supporting the roll-out of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

To join one of the two webinars, any professional using, applying and enforcing the Code should click the link on their preferred date below to register:

• Thursday March 28, 2019 at 7:00 AM EST
• Wednesday April 17, 2019 at 10:00 AM EST

During the webinar, the IESBA representatives will explain the Code’s new structure; and the substantive revisions, including to the conceptual framework and provisions relating to inducements, including gifts and hospitality; pressure; and preparing and presenting information. The webinar will also touch on the new Non-compliance with Laws and Regulation (NOCLAR) and  revised Long Association provisions which are already effective; as well as the IESBA’s e-Code initiative.

Effective mid-June 2019, the Code reinforces professional accountants’ responsibility to comply with the five fundamental principles of ethics and emphasizes the International Independence Standards that apply in performing audits, reviews and other assurance engagements.

More information about the Code is available at the IESBA’s website.   

If you have questions about this webinar, please email Geoff Kwan at geoffkwan@ethicsboard.org.  

Accounting technicians play an important role in many jurisdictions and an accounting technician qualification is frequently a pathway into the accountancy profession. IFAC is delighted to share a framework for professional accountancy organizations that will support a competent, skilled and future-ready accounting technician workforce.

“Prepared by the AAT, and based on the association’s competency framework, An Illustrative Competency Framework for Accounting Technicians is a conversation starter,” explained Joseph Bryson, Head of Quality & Development at IFAC. “IFAC hopes that every professional accountancy organization with an interest in the accounting technician qualification shares their experiences and helps to grow this important segment of the global accountancy ecosystem.”

The Framework’s illustrative example is a resource for professional accountancy organizations creating an Accounting Technician designation as an additional pathways into the accountancy profession. Those interested in sharing their experience and knowledge should email their articles and/or resources marked “IFAC AAT Framework Discussion”.

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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

Extended external reporting (EER) is becoming increasingly common and there is a growing demand for assurance engagements in relation to it. The International Auditing and Assurance Standards Board (IAASB) seeks feedback on its progress in developing draft guidance in the first phase of its EER Assurance project. Public input is requested by June 21, 2019.

EER encapsulates many different forms of reporting including, but not limited to, integrated reporting, sustainability reporting and other reporting by entities about environmental, social and governance matters.

The IAASB Consultation Paper, Extended External Reporting Assurance , includes the first part of draft guidance for practitioners applying International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, to EER assurance engagements. Input received will assist the IAASB in continuing to develop a complete non-authoritative guidance document due to be published in the second phase of the project.

This consultation includes draft guidance covering:

• The suitability of criteria (reporting framework or standards) used to prepare the EER report;
• Preparer-developed criteria to determine the matters reported on (a preparer’s “materiality process”);
• The types of misstatements that may occur in the EER report (building assertions);
• The materiality of misstatements in the EER report;
• The preparer’s governance and internal control over its process to prepare the EER report; and
• Narrative and future-oriented information in the EER report.

The IAASB invites input on the draft guidance from all stakeholders, especially those with practical experience in this evolving area of reporting, including practitioners and other experts involved in performing engagements, preparers of EER reports, investors and other users, standard setters, and regulators.

Comments on the Consultation Paper are requested by June 21, 2019.

The IAASB’s EER Assurance project is being run with the support of the World Business Council for Sustainable Development.

About the IAASB

The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

The International Auditing and Assurance Standards Board (IAASB) seeks public comment by July 1, 2019 on three interrelated standards that address quality management. The proposals bring important changes to the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements.

The proposed standards include a new proactive risk-based approach to effective quality management systems within firms that establish the foundation for consistent engagement quality. The new approach improves the scalability of the standards because it promotes a system tailored to the nature and circumstances of the firm and its engagements.

The IAASB proposals are intended to improve engagement quality through:

• Modernizing the standards for an evolving and increasingly complex environment, including addressing the impact of technology, networks, and use of external service providers;
• Increasing firm leadership responsibilities and accountability, and improving firm governance;
• More rigorous monitoring of quality management systems and remediating deficiencies;
• Enhancing the engagement partner’s responsibility for audit engagement leadership and audit quality; and
• Addressing the robustness of engagement quality reviews, including engagement selection, documentation, and performance.

Given the significance of the changes and the need for firms to adjust how they manage quality, the IAASB has also developed draft guidance and tools, such as examples and frequently asked questions. These materials will help firms understand the proposals, including how to apply them in different circumstances.

Exposure Drafts

• Overall Explanatory Memorandum, The IAASB’s Exposure Drafts for Quality Management at the Firm and Engagement Level, Including Engagement Quality Reviews
• Proposed International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements (previously ISQC 1)
• Proposed International Standard on Quality Management 2, Engagement Quality Reviews
• Proposed International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements

 Comments on the Exposure Drafts are requested by July 1, 2019.

 About the IAASB

The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org

The evolving environment in which the International Auditing and Assurance Standards Board (IAASB) operates demands a strategy that reflects, among others, changing technology; a dynamic small- and medium-sized entity landscape; and emerging reporting needs. This is global stakeholders’ opportunity to shape the board’s strategy by commenting on the proposed draft.

In the Proposed Strategy for 2020–2023 and Work Plan for 2020–2021, the IAASB puts forth a way forward that it believes meets stakeholders’ evolving needs, and is in the public interest. Enhancing our processes, including using technology and appropriate resourcing, are included in the strategy and are crucial to success. These enhancements will also maximize the impact of our activities, thereby enabling more timely responses to global trends and needs.

The Work Plan highlights the board’s commitment to completing significant projects currently underway, while balancing the needs of different stakeholders.

Feedback on this consultation and on the IAASB’s strategic direction is requested by June 4, 2019 from all interested stakeholders.

About the IAASB

The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org

The International Public Sector Accounting Standards Board (IPSASB) has released a new standard and an Exposure Draft on accounting for social benefits, and collective and individual services, respectively. Between them, International Public Sector Accounting Standard (IPSAS) 42, Social Benefits, and the related Exposure Draft (ED) 67, Collective and Individual Services and Emergency Relief (Amendments to IPSAS 19), address a wide range of significant government expenditures that directly impact the lives of citizens globally.

IPSAS 42 provides much-needed guidance on accounting for social benefits expenditure, which comprises about one fifth of GDP across OECD countries. It defines social benefits as cash transfers paid to specific individuals and/or households to mitigate the effect of social risk. Specific examples include state retirement benefits, disability benefits, income support and unemployment benefits. The new standard requires an entity to recognize an expense and a liability for the next social benefit payment.

“IPSAS 42 represents a big step forward for global financial reporting in the public sector and fills one of the major gaps in IPSASB’s suite of standards,” said IPSASB Chair Ian Carruthers. “Social benefits has been a challenging project because of the differing, strongly held views as to when a liability for social benefits arises. We are confident that the final standard will increase transparency and comparability in public sector financial reporting.”

In order to extend IPSASB’s guidance to public services as well as cash transfers, ED 67 proposes new requirements for accounting for collective services (such as defense at national-levels and street lighting at sub-national levels), individual services (such as healthcare and education) and emergency relief.

For collective and individual services, ED 67 proposes that an expense is recognized at the point of service delivery. ED 67 also proposes that an expense and liability is recognized for some emergency relief, but not where emergency relief is delivered as an ongoing activity of government.

“The distinction between social benefits and collective and individual services is important, but the accounting treatment of these transactions must be conceptually consistent,” said Mr. Carruthers. “Issuing ED 67 now, together with IPSAS 42, will allow our stakeholders to identify and account more consistently for the full range of social policy obligations of government.”

How to Comment
To access Exposure Draft 67 and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website at www.ipsasb.org. Comments on the Exposure Draft are requested by May 31, 2019. The IPSASB encourages IFAC member organizations and regional accountancy organizations to promote the availability of this Exposure Draft 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 governments of Canada and New Zealand. 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.

At a time when public sector spending, government accountability and financial sustainability are in the spotlight, ACCA (the Association of Chartered Certified Accountants) and IFAC (the International Federation of Accountants) are launching a global series that will identify, document and share success stories in public financial management.

Strong public financial management processes and systems are essential for effective and efficient delivery of public services, transparent public finances, and trust between government and citizens. ACCA and IFAC are keen to showcase how such strong systems make a difference when public sector spending is under intense scrutiny.

The series includes videos and written case studies, showcasing stories through their network of global experts. Public sector finance leaders from Tanzania, Australia and Canada have already shared their stories in videos which are available online: https://www.ifac.org/global-knowledge-gateway/business-reporting/discussion/showcasing-good-public-financial-management

Alex Metcalfe, head of public sector policy at ACCA said: ‘The aim of this research is to answer a number of fundamental questions about how public financial management is working now, and how it can operate in the future. We want to capture and share real stories of how public financial management improvements have made an immediate difference in the delivery of public services.’

Alta Prinsloo, IFAC Executive Director, added: ‘Strong public financial management impacts citizens and presents an opportunity for tangible change. Professional accountants have an essential role to play and we must leverage these case studies to continue making progress in the future.”

This research collaboration supports IFAC and ACCA’s work to build capacity in the public sector and to strengthen public financial management globally.

For media enquiries, contact:
Geena De Rose                                                       Helen Thompson
IFAC Communications                                              ACCA Head of Corp Comms
+1-212-286-9344                                                   M: +44 (0)7725 498 654
GeenaDeRose@ifac.org                                            Helen.Thompson@accaglobal.com
@IFAC                                                                     @ACCANews

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 over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

The newly published sequel to the 2017 G20 public trust in tax report from ACCA (the Association of Chartered Certified Accountants), CA ANZ and IFAC (the International Federation of Accountants) reveals a high level of distrust among the public in politicians and non-government organisations (NGOs) when it comes to tax systems.

The new report also shows that public trust in professionals, such as accountants and lawyers, remains high by comparison.

When it comes to evaluating their tax systems, respondents across G20 nations are most concerned about transparency, complexity, inequality and corruption in tax systems.

Respondents’ concerns about inequality stem from the perception in English-speaking countries that high income earners and multinationals are treated better by tax systems than average or low income earners. Respondents in China, Indonesia and India had high levels of trust in tax authorities, politicians and accountants, reported efficient tax filing, and supported tax competition to attract multinational business.

G20 public trust in tax report is based on an online survey of more than 8,400 members of the general public across G20 countries and New Zealand, revealing that respondents have:

• a trust deficit amongst politicians and the media; 58 per cent of respondents expressed distrust or strong distrust in politicians, down nine per cent since 2017. Similarly, distrust in the media stands at 37 per cent down four per cent since the last survey;

• the highest level of trust in professional tax accountants at 55 per cent, down a marginal two percentage points compared to 2017, and professional tax lawyers at 50 per cent, up one per cent;

• consistent levels of mistrust year-on-year in non-government organisations at 37 per cent, an increase of two percent compared to 2017;

• divided views of trust in government tax authorities, with 37 per cent saying they trust or highly trust tax authorities and 34 per cent distrusting or highly distrusting them.

Commenting on the second year’s findings, Chas Roy-Chowdhury, global head of tax at ACCA says: ‘Once trust is lost, it’s hard to regain. Tax is a complex issue and one that touches all our lives - so that trust is important. What’s clear from this research is the need for all significant players – from politicians to tax experts - to work together to build and sustain the public’s trust in tax. And while the accountancy profession fares the best again in this year’s results, we cannot be complacent about these findings.’

Kevin Dancey, IFAC CEO adds: ‘Given that accountants adhere to a strong ethical code that supports their public interest obligations, it’s vital that we actually understand what the public thinks of tax systems and who they go to for trusted advice. This research gives everyone working in tax, including policy makers, politicians, media and accountants, a powerful insight in what the public really think. By understanding their views, professionals can better work to inspire confidence in the system as a whole.’

Michael Croker from CA ANZ concludes: ‘Our research shows that people say they broadly trust and want to hear more from experts and professionals, but scepticism in politicians and the media continues. If transparency is one of the pillars of an effective tax system, then the professionals and experts working in tax need to strive for even more clarity on how tax works nationally and globally. It’s clear there is still much work to be done to sustain this hard earned trust it amongst the tax-paying public.’

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 over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

About CA ANZ
Chartered Accountants Australia and New Zealand is a professional body comprised of more than 117,000 members living and working around the world. We focus on the education and lifelong learning of our members, and engage in advocacy and thought leadership in areas of public interest that impact the economy and domestic and international markets.