The International Federation of Accountants (IFAC) welcomes the U.S. SEC’s proposal on enhanced climate disclosures, as we continue our work in support of a global system for delivering consistent, comparable and assurable sustainability information.  The SEC’s action is one more important demonstration of the need to enhance and evolve corporate reporting.

Sustainability-related disclosure is now a core component of the corporate reporting ecosystem, as reflected in global and jurisdiction-specific initiatives.  Climate and other ESG matters are decision critical.  Regulatory frameworks must promote rigor, clarity, and consistency of information, both to meet investor demands and those of other stakeholders. 

The SEC’s proposal also acknowledges the importance of high-quality assurance—to bring confidence and trust to what is disclosed.  This is consistent with the work of IOSCO at the global level, which has identified independent assurance as a “key element of building trust in sustainability reporting.”  See IFAC’s Vision for High-Quality Assurance of Sustainability Information.

IFAC CEO Kevin Dancey said, “This SEC proposal allows policymakers and stakeholders worldwide to compare and contrast important initiatives that are taking place on climate-related disclosure, including the work of the newly established International Sustainability Standards Board under the IFRS Foundation, that of the European Union, and others. 

“Alignment among all these initiatives is imperative for decision-useful information. It’s critical that we create a harmonized, global system of sustainability and climate disclosure and avoid a patchwork of standards and regulations emerging across jurisdictions.  IFAC also supports regulations that promote narrative as well as performance-focused measurements and that better align sustainability disclosure with financial reporting.”

Read more about IFAC’s support for global sustainability-related standards on the IFAC website.

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.

The International Federation of Accountants (IFAC) today released a new resource, Exploring the IESBA Code, A Focus on Technology: Artificial Intelligence. This two-page publication highlights the application of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code), in particular, the relevance of the Code’s fundamental principles and its conceptual framework to addressing ethics issues that might arise when artificial intelligence (AI) is used or implemented by professional accountants. Specifically, the installment sets out an AI scenario to assist accountants in identifying, evaluating and addressing threats to compliance with the Code’s fundamental principles.

Originally launched in 2019, the Exploring the IESBA Code is a unique resource developed in collaboration with the staff of the IESBA. This installment focusing on AI has also benefited from input from the IESBA’s Technology Working Group. The Exploring the IESBA Code series is intended to promote awareness of the Code and support its global adoption and implementation. It is non-authoritative and is not a substitute for reading the Code. Each installment highlights important concepts and topics in the Code and seeks to help readers understand how to use and navigate the Code so that they can quickly identify and access the ethics and independence standards and guidance relevant to them.

Previous installments have been translated into multiple languages. Topics previously covered by the series include: the fundamental principles, the conceptual framework, auditor independence, conflicts of interest, inducements, responding to non-compliance with laws and regulations (NOCLAR), pressure, the role and mindset expected of the professional accountant with a focus on bias, and the “building blocks” structure of the Code. Click here to access this and previous installments.

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.

About IESBA

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 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 Code).

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.  

Together with ICAEW, The International Federation of Accountants (IFAC) today released a new installment in its Anti-Money Laundering: The Basics educational series: Installment Seven: Virtual Assets.  

The publication is part of a series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment seven looks at the broad new class of assets that have emerged over the past decade known as virtual assets, including Bitcoin and NFTs (non-fungible tokens).

Anti-Money Laundering: The Basics is user-friendly, easily accessible, and will be a resource for Small and Medium Practices (SMPs) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference. Future installments will examine trends in money laundering and tools to fight back illegal activities.

Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point. 

For more information about IFAC, visit www.ifac.org.

For more information about ICAEW, visit https://www.icaew.com/.

The International Auditing and Assurance Standards Board (IAASB) today released First-time Implementation Guide for ISA 220, Quality Management for an Audit of Financial Statements. The guide will help stakeholders understand the standard and properly implement its requirements as intended.

Alongside the previously released implementation guides for International Standard on Quality Management (ISQM) 1 and 2, the new Guide will help stakeholders implement the IAASB’s suite of quality management standards. The suite of standards was released in December 2020 and come into effect on December 15, 2022.

These publications do not amend or override ISA 220 or ISQM 1 or 2, the text of which alone are authoritative. Reading these publications are not a substitute for reading the ISQMs. The IAASB encourages all practitioners to plan early for appropriate implementation, given the potential impact of the changes to firms’ quality management systems.

Accounting Today highlights the publication of IPSAS 43, Leases. 

The Public Interest Oversight Board’s (PIOB) newly formed Standard Setting Boards’ Nominations Committee has issued the Invitations for Application for the International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants. The application period will be open until March 30, 2022.

The Nominations Committee will make recommendations to the PIOB for up to five new appointments and re-appointments to the IAASB for terms beginning January 1, 2023. The Invitations for Application are open to all individuals and interested organizations, including those representing investors and the corporate governance community, regulatory bodies, national standard setters, accounting and audit firms, professional accountancy organizations and public sector organizations, and those in academia. Individuals may also make nominations on their own behalf.

For additional information, please see the PIOB’s nominations web page or email SSBNominations@ipiob.org.

The International Public Sector Accounting Standards Board® (IPSASB®) has today released Exposure Draft (ED) 81, Conceptual Framework Update: Chapter 3, Qualitative Characteristics and Chapter 5, Elements in Financial Statements.

ED 81 is the second exposure draft resulting from the limited scope project to revise the Conceptual Framework in specified areas. ED 81 proposes updates to the chapters of the Conceptual Framework dealing with the attributes of financial information that make financial reporting useful-qualitative characteristics-and the building blocks of financial statements-elements.

In developing its proposals, the IPSASB has considered the Board’s experience in applying the Framework to the development and maintenance of International Public Sector Accounting Standards (IPSAS), as well as recent developments in international thinking about conceptual issues.

“Since its publication in 2014 the Conceptual Framework has been the cornerstone of IPSASB’s global standards delivery activity” said IPSASB Chair Ian Carruthers. “The ED 81 proposals are intended to address issues that have emerged in the Framework’s application in practice, so that it remains central to global public sector financial reporting.”

The ED 81 proposals include:

• Clarifying the role of prudence in public sector financial reporting;
• Revised definitions of an asset and a liability;
• Clarifying what constitutes a transfer of resources when determining whether an entity has a liability; and
• Restructuring guidance on liabilities to improve clarity for users of the Framework.

The IPSASB welcomes the views of respondents on the proposed amendments to the Conceptual Framework.

How to Comment
To access the Exposure Draft, its summary At-a-Glance document, or to submit a comment, visit the IPSASB website. Comments are requested May 31, 2022. The IPSASB encourages IFAC members, associates, and Network Partners 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.

The International Public Sector Accounting Standards Board^® (IPSASB^®) has issued International Public Sector Accounting Standard® (IPSAS®) 43, Leases.

IPSAS 43 is based on International Financial Reporting Standard (IFRS^®) 16, Leases, developed by the International Accounting Standards Board (IASB^®). For lessees, IPSAS 43 introduces a right-of-use model that replaces the risks and rewards incidental to ownership model in IPSAS 13, Leases. For lessors, IPSAS 43 substantially carries forward the risks and rewards incidental to ownership model in IPSAS 13.

IPSAS 43 has an effective date of January 1, 2025. Earlier application is permitted in certain circumstances.

“IPSAS 43, Leases will improve the transparency of lease accounting in the public sector, while maintaining alignment with IFRS,” said IPSASB Chair Ian Carruthers. “Having a three-year period to apply IPSAS 43 provides public sector entities time to prepare for the new requirements and allows for learning to be drawn from the private sector experience in applying IFRS 16.”

The publication of IPSAS 43 completes the IPSASB’s first phase of work on Leases. The IPSASB will continue its work by considering additional public sector specific issues in its Other Lease-Type Arrangements project.

How to Access
To access IPSAS 43, Leases, its summary At-a-Glance document, and webcast, visit the IPSASB website. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of IPSAS 43, Leases 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.