Welcome to IFAC’s Professional Accountants in Business (PAIB) Committee eNews.

In this Issue:

Governance
1. Public Sector Governance Consultation Draft Published by IFAC, CIPFA
2. ICAEW: What are the Principles of Corporate Governance?

Internal Control and Risk Management
3. Revised COSO Framework: IFAC Review Available for Publication
4. Sharing Best Practice on Risk Management and Internal Control

Financial Reporting
5. IFAC Responds to IIRC Consultation Draft on Integrated Reporting
6. GRI Publishes Survey Review of Integrated Reports

Sustainability
7. World Forum on Natural Capital
8. ICAS Announces Sustainability in Business Essay Competition
9. NYSE Joins UN Sustainable Stock Exchanges Initiative

SMP News
10. SMP Quick Poll: Sustainability Services on the Rise

Next PAIB Committee Meeting
11. Next Meeting of Professional Accountants in Business Committee

Governance

1. Public Sector Governance Consultation Draft Published by IFAC, CIPFA

IFAC and the Chartered Institute of Public Finance and Accountancy (CIPFA) issued a Consultation Draft, Good Governance in the Public Sector, to promote the development of robust governance. The Consultation Draft looks to establish a benchmark for good governance in the public sector at both the government and individual public sector entity levels. The Consultation Draft was developed with input from representatives of relevant international organizations. Public sector representatives and other public sector stakeholders are encouraged to respond to the proposed framework to help improve its applicability to public sector entities at all levels internationally. Comments are requested by September 17, 2013.

IFAC member and regional organizations are invited to publish the supporting article, “New Guidance Aims to Improve Public Sector Governance,” in their journals, newsletters, website, and other forums. The article can also be tailored to suit the needs of each organization and membership. Email permissions@ifac.org for permission to translate or reproduce.

2. ICAEW: What are the Principles of Corporate Governance?

Governance is also discussed in What are the Overarching Principles of Corporate Governance? from the Institute of Chartered Accountants in England and Wales (ICAEW). The thought piece encourages corporate boards to focus on a set of simple but fundamental principles of corporate governance. It also outlines five short, purposeful, and aspirational overarching principles that apply to a wide range of companies. These principles should serve to remind corporate boards, and their stakeholders, what corporate governance should look like if a company is to meet its business purpose and other responsibilities.

Internal Control and Risk Management

3. Revised COSO Framework: IFAC Review Available for Publication

In response to the publication of the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Internal Control-Integrated Framework in May (see PAIB Committee eNews May 2013 for details), IFAC has written a review discussing the changes in the new COSO publication and the work still to be done. “Revised COSO Framework: Improved but Further Adjustments Warranted” outlines recommendations COSO should take up in future revisions to make the Framework more relevant to a broader global community. This article is also available for publication by member bodies. Email permissions@ifac.org for permission to translate or reproduce.

4. Sharing Best Practices on Risk Management and Internal Control

IFAC staff recently gave a presentation on risk management, internal control, and the COSO Framework at the 94^th Annual Institute of Management Accountants (IMA) Conference in New Orleans, US. The presentation, made with J. Stephen McNally of the Campbell Soup Company, outlines some of the pitfalls many organizations face with their current systems of risk management and internal control. Vincent Tophoff, IFAC senior technical manager, and Mr. McNally also addressed the changes in the newly revised Internal Control-Integrated Framework from COSO.

The presentation:

• summarizes the most important pitfalls in current risk management & internal control (RM/IC) practice;
• provides insight into current thinking on risk management and internal control;
• outlines key concepts contained in the most important risk management and internal control guidelines;
• discusses the impact of these developments and approaches for organizations; and
• identifies and discusses other emerging trends related to risk management and internal control.

IFAC staff also recently gave a presentation on the effective integration of risk management and internal control, especially as it relates to the International Organization for Standardization (ISO)’s standard on risk management, ISO 31000 – Risk Management, at the Second International Conference on ISO 31000 in Toronto, Canada.

Financial Reporting

5. IFAC Responds to IIRC Consultation Draft on Integrated Reporting

IFAC responded to the landmark Consultation Draft of the International Integrated Reporting Framework, published in April by the International Integrated Reporting Council (IIRC). In its comment letter, IFAC recommends, for example, adjusting the Framework to encourage a principles-based, rather than a rules-based, approach to integrated reporting and advocates that it should be the individual organizations that determine their intended audiences, instead of the blanket assumption that integrated reports are primarily for providers of financial capital. The IIRC is now in the process of analyzing the 350 responses it received to the proposed Framework.

6. GRI Publishes Survey Review of Integrated Reports

The Global Reporting Initiative (GRI) released a new survey report reviewing different ways integrated reports are taking shape around the world. The Sustainability Content of Integrated Reports—A Survey of Pioneers looks at 756 reports published from 2010 to 2012 following GRI Guidelines and surveys 52 organizations that issued integrated reports during all three years. 

Sustainability

7. World Forum on Natural Capital

The World Forum on Natural Capital, an UN-backed event, will be held in Edinburgh, UK, November 21-22, 2013. The event will be the first major global conference devoted to putting an economic value on natural capital (additional information on natural capital is available in Special Edition eNews—Accounting for Natural Capital). Synergies between public and private sector natural capital accounts will be explored, as will the links with integrated reporting and the issues affecting different sectors. The conference is organized by the Scottish Wildlife Trust in association with the United Nations Environment Programme, World Business Council for Sustainable Development, International Union for Conservation of Nature, TEEB for Business Coalition, and the Wildlife Trusts. IFAC stakeholders are being offered a 10% discount on registration (promotional code IFAC10 when registering). Additional information, including the program, is available at www.naturalcapitalforum.com. Early bird registration closes September 12, 2013.

8. ICAS Announces Sustainability in Business Essay Competition

The Institute of Chartered Accountants of Scotland (ICAS) has announced its 2013 essay competition to encourage debate regarding sustainability in business. Entry is open to all accountants and students globally. Professionals and students in related fields are also encouraged to apply. Full details, including competition rules and topic details, can be found at https://icas.org.uk/sustainabilityprizeessay/. The competition, sponsored by Grant Thornton UK LLP, closes on September 30, 2013.

9. NYSE Joins UN Sustainable Stock Exchanges Initiative

The NYSE Euronext is the newest member of the United Nations’ Sustainability Stock Exchanges (SSE) Initiative. The initiative aims to “explore how exchanges can work together with investors, regulators, and companies to enhance corporate transparency on environmental, social, and corporate governance issues and encourage responsible long-term approaches to investment.” In announcing its participation, Duncan L. Niederauer, CEO of NYSE Euronext, said, "As the only carbon neutral global exchange group, we are proud to join the SSE initiative and partner with the UN and our industry to support best practices in corporate governance and transparency related to corporate sustainability. We lead by example by running our business in an environmentally responsible manner, and by leveraging the unique power of our platform and our NYSE Euronext community, we empower learning and collaboration within the broader corporate sector."

SMP News

10. SMP Quick Poll: Sustainability Services on the Rise

The latest IFAC SMP Quick Poll results showed that the vast majority, 73%, of the nearly 4,000 small- and medium-sized accounting practitioners (SMPs) surveyed are either currently providing or have plans to provide sustainability services to their clients, suggesting there is a sizable market for these services among the small businesses that SMPs typically serve. Results varied somewhat by size of practice and region. The larger the size of the SMP, the more likely it was to be offering sustainability services.

Next PAIB Committee Meeting

11. Next Meeting of Professional Accountants in Business Committee

The next meeting of the PAIB Committee will be hosted by the Chinese Institute of Certified Public Accountants (CICPA), October 14-15, in Beijing, China. It will be followed by a forum on October 16, 2013, at the CICPA offices. Additional information on the forum, which will be open to the public, will be made available in coming issues of eNews.

The IFAC Nominating Committee plays a vital role in establishing the expertise of the independent standard-setting boards, the IFAC Board, Compliance Advisory Panel, and IFAC committees by seeking out and identifying the best candidates for vacancies. Whether it is one of the independent standard-setting boards or an IFAC committee, the Nominating Committee examines nominations from around the world, analyzes experience and expertise, and considers diversity when recommending new members and leadership for the boards and committees, all while maintaining transparency and strict adherence to due process. The Nominating Committee, under the oversight of the Public Interest Oversight Board (PIOB), also strives to ensure sufficient nominations are received each year and helps professional accountancy organizations and other stakeholders establish an effective nominations strategy.

The Nominating Committee is comprised of two ex-officio members—the IFAC president and deputy president—and at least four non-ex-officio members, of whom no more than two can be IFAC Board members. There are currently two Board members on the committee—Ana Maria Elorietta and Japheth Katto—although during some years there have been none. For 2013, the non-Board members, or ordinary members, are Margaret Parker, Professor Judy Tsui, and Sir David Tweedie.

I asked committee members to share their experiences and thoughts on the work of the committee in order to increase the knowledge among our stakeholders of the work and diligence involved.

—Warren Allen, IFAC President

1. What made you interested in serving on the Nominating Committee?
   
   Ana Maria Elorrieta: Due to my accumulated knowledge of IFAC, I felt that I had a reasonable understanding of most of the needs at the board and committee level so I realized that I could contribute to the nominations process. Additionally, in so doing, I would be representing Latin America.
   
   Japheth Katto: I wanted to make a contribution to the leadership and governance of IFAC, its committees, and the independent standard-setting boards by being part of the selection of professionals serving on the boards and committees. In my view this is an important exercise as serving the public interest is the foundation of IFAC's mission.
   
   Margaret Parker: My member body contacted me to put my name forward. I was on a nominating committee in my state in Australia so was familiar with the overall requirements of a nominating committee at the local level.
   
   Sir David Tweedie: I believe passionately in global standards, whether they are in accounting, auditing, ethics, or education. If we are to gain acceptance for these standards, we need the very best people the profession can offer to draft them. I wanted to do my best to ensure that the [boards and] committees were filled by those who were respected thinkers in their particular specialisms and had an international outlook rather than being merely placemen.
    
2. Since you became a member, has your view of the Nominating Committee and its work changed? Has serving on the Nominating Committee been what you expected?
   
   Japheth Katto: I always knew that the committee played a very big role and that its job was not an easy one. However, I did not fully appreciate how intricate and complicated the process was, especially when you have many candidates who fit the criteria of "best person for the job."
   
   Margaret Parker: Serving on the committee has been much more than I expected. The rigor and concern for the public interest are foremost in the committee’s mind. I have also come to understand that the work of the committee is vital to the quality of volunteers on the boards and committees.
   
   The committee is very cohesive and cooperative, which adds to the overall enjoyment of the work. On a personal level, it has been a wonderful experience to be on an international committee where the members are from all over the world.
   
   Judy Tsui: I was pleasantly surprised to find out that the Nominating Committee has established such comprehensive and consistent procedures and processes for all the nominations. The PIOB observer, in particular, serves as a monitor of public interest.
   
   Sir David Tweedie: I have been astounded at the thoroughness of the work of the committee. It seeks to be scrupulously fair—it examines the CVs very carefully, then ensures that not one committee member has an undue influence in the result. I have found the work of the committee and its staff extremely professional—far exceeding anything else I have experienced with nominating committees.
    
3. The competition for membership on boards and committees is very high; how does the committee select the “best” candidates for positions?
   
   Ana Maria Elorrieta: This is really a very important activity. We first analyze the profile of the best candidate in accordance with the boards’ and committees’ needs. Then we analyze the CVs received and try to match one to the other. The analysis of the CVs is very detailed work performed individually by each Nominating Committee member, so when we discuss as a group, each member has a point of view on the best candidates. Then we complete our knowledge of the candidates through the interviews to provide the basis for the final decision. It is a very comprehensive process.
   
   Japheth Katto: In arriving at the best candidate for the position, the committee's guiding criteria is the candidate's knowledge, experience, and ability to add value to the board or committee. Before the final decision, other factors, such as geographical and sector (Big 4, small- and medium-sized practices, professional accountants in business, etc.) representation are taken into account. Clearly, it wouldn't be in the public interest if all or most members of a board or committee were from the Big 4 or one region. Diversity is important.
   
   Margaret Parker: The committee members read all the CVs submitted via the Call for Nominations. We also consider the requirements of the boards and committees for which we are recommending candidates. It is, therefore, important for nominees to include their experience relevant to the particular board in their CV. The committee members individually rank the nominees prior to our meeting. At our next face-to-face meeting, a technical voting system is used to rank the nominees who are then chosen for either telephone or face-to-face interviews.
   
   Committee members, together with board/committee chairs, conduct telephone interviews, gleaning the candidates’ experience of the work of the board/committee, their relevant work experience, and what they may bring on a personal level. Written reports of the interviews are provided to the Nominating Committee for further consideration in choosing the recommended nominee.
   
   In making the final choice, all aspects of the “best” person for the job are considered—relevant experience required by the board/committee, regional representation, gender representation, and English language skills.
   
   Sir David Tweedie: Once the CVs have been read by the individual members, we all vote electronically at the same time and then select for interview those nominees that receive the highest number of votes. We usually interview twice as many candidates as there are vacancies. The interviews are carried out by a Nominating Committee member and the chair of the committee [in question]. The notes on these interviews are then passed to the whole committee at the next meeting where the interview results are debated. If there are doubts about the caliber of those interviewed other candidates may be sought from member bodies.
    
4. How is your role as an ordinary (non-Board) member different from a Board member? How is your role as a Board member different from an ordinary (non-Board) member?
   
   Ana Maria Elorrieta: The difference between a Board member and non-Board member is that we have the input from the Board, including suggestions and concerns related to the other boards and committees. This includes discussions around strategy and risks. We can add this perspective to the Nominating Committee discussion.
   
   Japheth Katto: I think as a Board member, I bring the perspective of the Board as a whole. I will know the Board's thinking based on previous experience and on ongoing consultations between the Nominating Committee and the Board.
   
   Margaret Parker: I don’t believe my role as an ordinary member is different from a Board member. We all have a say in the decision making, all have a vote in choosing the candidates for interview, all have an opportunity to provide input after an interview. The Board members will have wider experience with IFAC, which occasionally will impact our decisions; however, generally, there is no difference.
   
   Sir David Tweedie: In most cases, there is no difference between the two roles. The Board members, however, are more experienced with the workings of IFAC—they can explain IFAC policies and answer questions about individuals who have served on IFAC boards/committees in the past or explain the history of certain applications.
    
5. What does serving the public interest, which is embedded in IFAC’s mission, mean to you as a member of the Nominating Committee?
   
   Ana Maria Elorrieta: To serve the public interest is to act with an objective and balanced view and avoid influence of any type. It means to think strategically and with a long-term view, looking to protect the society and not any individual part.
   
   Japheth Katto: Simply put, serving in the public interest means selecting those candidates that are going to work not in the interest of their nominating organization or their employers or regions, who are not going to allow [themselves] to be unduly influenced, and who are going to act with integrity in the interest of the global profession and the public that it serves.
   
   Margaret Parker: To me, serving the public interest means making decisions that are best for the whole rather than a part of the whole. This can be applied from a wide perspective, such as making decisions that are best for the world rather than a particular country or region, or doing what is best for a group rather than the individual. When applying this philosophy to the nominating [process], it means making decisions that are in the best interest of the public at large, rather than the accountancy profession in particular, or a particular region, country, or individual.
   
   Sir David Tweedie: The public interest should be in the DNA of every accountant. In looking at candidates, I look for those that have clearly been involved in public policy issues, have written articles advocating professionalism, or have given time to move the profession forward. Public interest to me is acting in a neutral, unbiased way to present transparent information to society at large and to act with integrity and objectivity without regard to particular interests. I look for this in those who are nominated for the [boards or] committees.
    
6. How does the committee ensure due process in its actions?
   
   Ana Maria Elorrieta: There is a clear and objective process that is carefully followed. There are discussions at each phase, to reaffirm the adequacy of the decisions taken at each stage of the process. Every member is free to contribute and discuss.
   
   Japheth Katto: The committee has procedures and processes that are agreed [to], including Terms of Reference [which are approved by the IFAC Council and the PIOB]. It makes consensus decisions and documents its processes. In addition, its work is observed by the PIOB.
   
   Judy Tsui: Due process is ensured through:
   • Open, detailed, and rigorous discussions;
   • Adhering to anonymous electronic voting [to derive a shortlist of candidates];
   • Adhering to the principle of candidate selection based on the “best person for the job” and meeting geographical and gender diversity when possible once the candidates meet performance criteria; and
   • Maintaining the practice of having the board/committee chair and Nominating Committee members conduct telephone interviews for selecting board/committee members, and conducting in-person interviews for selecting IFAC Board and Nominating Committee members, and board/committee chairs.
   Margaret Parker: The committee members are very conscious of working in the public interest and according to the Terms of Reference of the committee. Members of the staff of IFAC who are familiar with the Constitution and regulations surrounding the work of the committee are also in attendance at the meetings to provide input where necessary. However, the meetings of the Nominating Committee are overseen by a member of the PIOB who ensures due process is followed and that the public interest is protected.
   
   Sir David Tweedie: See the answer to question three. Sometimes, however, excellent candidates simply are unable to obtain a place on a committee by virtue of the fact that their country or region is over represented and views from other parts of the world are necessary to give balance to that committee. In such cases, the unsuccessful candidates are frequently advised to reapply for a position. Due process isn’t simply looking for the best candidates but seeking to achieve a balanced composition on any board or IFAC committee.

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA, the Ethics Board). This edition of IESBA eNews provides a summary of decisions made at the board’s meeting held June 10-12, 2013, in New York, USA. See the Meeting Page for the meeting highlights podcast, meeting summary, and agenda papers.

IN THIS ISSUE:

1. Responding to a Suspected Illegal Act
2. Definition of Those Charged with Governance
3. Structure of the Code
4. Future Strategy and Work Plan
5. Review of Part C of the Code
6. Provision of Non-Assurance Services to an Audit Client
7. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
8. Emerging Issues and Outreach
9. Next Meetings
10. Ethics Board is Hiring
11. 2013 IESBA Handbook
12. Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available

1. Responding to a Suspected Illegal Act

The Ethics Board considered a proposed alternative to the approach set out in the Exposure Draft, Responding to a Suspected Illegal Act, regarding a professional accountant’s responsibilities when encountering a suspected illegal act. Among other matters, the Ethics Board discussed the concept of a permission in the Code of Ethics for Professional Accountants (the Code) for both professional accountants in public practice and professional accountants in business to override confidentiality in specific circumstances when responding to a suspected illegal act. In addition to considering the various elements of the proposed alternative approach, the Ethics Board discussed the thresholds for actions, the types of suspected illegal acts to disclose, and documentation. The Ethics Board will continue its deliberation of the proposed alternative approach at its September 2013 meeting.

2. Definition of Those Charged with Governance

The Ethics Board approved for issuance, subject to confirmation by the Public Interest Oversight Board (PIOB) in September 2013 that due process has been followed, a revised definition of “those charged with governance” and related changes to the Code. The changes will be effective on July 1, 2014.

3. Structure of the Code

The Ethics Board approved the terms of reference for the working group formed to advise the board on ways to improve the usability of the Code. The board also supported the working group’s research plan and proposed timeline for the initiative, and provided suggestions for the working group to consider as it begins research. The Ethics Board will receive an update on the research at its September 2013 meeting.

4. Future Strategy and Work Plan

The Ethics Board considered the responses to its survey on the 2014-2016 IESBA Strategy and Work Plan. It also considered the Planning Committee’s preliminary analysis of the survey results and recommendations for the way forward. Among other matters, the Ethics Board agreed to extend its 2011-2012 Strategy and Work Plan through the end of 2014. The Ethics Board also identified a short list of topics for possible inclusion in its next Strategy and Work Plan (2015-2017) for further consideration. The board will continue its deliberation on these topics at its September 2013 meeting.

5. Review of Part C of the Code
Discussion around the project to review Part C of the Code, which addresses professional accountants in business (PAIBs), included the application of Part C to all professional accountants and pressure by superiors and others to engage in unethical or illegal acts. Consideration of matters relevant to professional accountants in public practice has been deferred until after PAIB-specific issues have been addressed. The Ethics Board will continue its consideration of pressure issues at its September 2013 meeting.

6. Provision of Non-Assurance Services to an Audit Client

The Ethics Board considered the findings from a survey of a number of jurisdictions, conducted by the project Task Force, to narrow the scope of the project on non-assurance services. The Ethics Board also considered the Task Force’s recommendations and agreed that the project proposal should be refined to focus on the following:

• Clarification of the provisions in Section 290, Independence—Audit and Review Engagements, addressing management responsibilities;
• Clarification of the concept of “routine and mechanical” services relating to the preparation of accounting records and financial statements; and
• A review of the emergency exception provisions in the Code pertaining to both accounting and bookkeeping services, and taxation services.

The Ethics Board also supported the development of a paper with the aim of, among other matters: raising awareness of the Code’s approach to non-assurance services and of the robustness of the related provisions in the Code; highlighting supplementary ways by which the threats and safeguards approach to independence in the Code may be enhanced; and generally increasing the visibility and transparency of the relevant provisions in the Code. The Ethics Board will receive an update on the project at its September 2013 meeting.

7. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

The Ethics Board received an update on the project to review the long association provisions in Section 290 of the Code to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. The Ethics Board will consider the findings from the survey and other research being undertaken for this project at its September 2013 meeting.

8. Emerging Issues and Outreach

The Ethics Board approved the terms of reference for the working group formed to advise the board in relation to emerging issues and international developments of relevance to the board’s work and outreach to stakeholders. The Ethics Board will consider at its September 2013 meeting preliminary recommendations from the working group with respect to processes by which the board may consider emerging issues and its strategy for outreach.

9. Next Meetings

Meetings of the IESBA and the IESBA Consultative Advisory Group (CAG) are open to the public. The IESBA CAG will next meet in New York, USA, on September 11, 2013. The next meeting of the IESBA will be in Sydney, Australia, September 16–18, 2013.

For more information and to register to attend an IESBA or IESBA CAG meeting as an observer, visit IESBA Meetings  and IESBA CAG Meetings respectively.

10. Ethics Board is Hiring

The Ethics Board is seeking a technical manager to join its staff team based in New York. Qualified candidates will currently be, or have had experience, at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similar. For a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to jobs@ifac.org. 

11. 2013 IESBA Handbook

The 2013 Handbook of the Code of Ethics for Professional Accountants is now available to download or purchase. The 2013 edition contains the final revised pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” These changes will be effective in 2014; see the individual pronouncements for details. To place an order for this, in addition to the 2013 handbooks for public sector accounting and auditing and assurance standards, visit Handbook of the Code of Ethics for Professional Accountants.   

12. Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from around the world will convene at this quadrennial IFAC event. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession. Register Now.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities.

Welcome to a Special Edition of the Professional Accountants in Business Committee eNews—Accounting for Natural Capital.

1. Overview
2. Where Does the Accountancy Profession Fit it In?
3. A Macro View of Natural Capital Risk
4. Business Case for Natural Capital Management
5. The TEEB for Business Coalition
6. Tracking a Carbon Bubble
7. Innovative Organizations

8. Other Activities and Resources

1. Overview

Attention from the accountancy profession on natural capital accounting is rapidly increasing in response to concern about the potential for systemic risk of climate change and environmental externalities that affect organizational, market, and societal sustainability.

Sustainable economies depend on sustainable organizations. To be viable over time, the ecosystems and resources organizations depend on need to be maintained and enhanced. Yet when it comes to the natural environment, we are seeing a rapid depletion of capital and resources, as well as the risk of a financial “carbon bubble” due to the potential limitations on what percentage of global fossil fuel reserves can be burned (see Tracking a Carbon Bubble for additional information).

This loss of natural capital is posing a new array of threats and opportunities to business ranging from competition for access to resources, and tightening regulation. Therefore, the time has come for organizations in the public and private sectors to adapt to a world of increasingly scarce natural resources.

2. Where Does the Accountancy Profession Fit it In?

Factors that are economically invisible contribute to natural capital depletion. Many environmental impacts are externalities because they are not accounted for in market economics. Government and business alike are starting to recognize the importance of measuring and valuing natural capital. Widely accepted standards for measurement and valuation would help organizations implement natural capital management and facilitate consistency and comparability across organizations.

Natural capital assets broadly fall into two categories: those that are non-renewable and traded, such as fossil fuel and mineral commodities, and those that provide finite renewable goods and services for which no price typically exists, such as clean air, groundwater, and biodiversity. Natural capital is the stock of capital derived from biological diversity and ecosystems as well as natural resources such as fossil fuels.

Is Natural Capital a Material Issue? by the Association of Chartered Certified Accountants, KPMG, and Fauna and Flora International demonstrates the lack of a standardized business case for considering biodiversity and ecosystem issues as a barrier impeding companies from effectively determining risk and opportunity exposures. So too is a lack of awareness among accounting and business communities of natural capital issues.

Given the importance of biodiversity and ecosystems to business and society, the accountancy profession has an important role to play in raising awareness of the business case, and developing new valuation, accounting, and reporting approaches.

Organizations can position themselves for sustainable success by ensuring that risk and materiality assessments consider natural capital, and by going through a process of placing monetary values or measurements on what nature does for their business models. This leads to better business decision making by exposing significant costs and benefits that could materially impact the bottom line but that traditional financial analyses usually miss.

This eNews highlights what is being done and by whom to develop natural capital accounting as an integrated part of business decision making and reporting.

3. A Macro View of Natural Capital Risk

Trucost’s study, Natural Capital at Risk: The Top 100 Externalities of Business, provides a high-level indication of the priority sectors and regions where natural capital risk lies and, therefore, the largest natural capital risks and opportunities for business and investors. Highest impact externalities are the primary production (agriculture, forestry, fisheries, mining, oil and gas exploration, utilities) and primary processing (cement, steel, pulp and paper, petrochemicals) sectors analyzed and are estimated to have externality costs totaling US$7.3 trillion, which equates to 13% of global economic output in 2009. The value of the Top 100 externalities is estimated at US$4.7 trillion or 65% of the total primary sector impacts identified.

The majority of environmental externality costs are from greenhouse gas emissions (38%) followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%). The report assessed more than 100 environmental impacts using the Trucost environmental model, which condenses them into six Environmental Key Performance Indicators (eKPIs) to cover water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use.

4. Business Case for Natural Capital Management

Organisational Change for Natural Capital Management, released by The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition, describes how business leaders can strategize and implement changes in organizational behavior related to valuing natural capital in their companies. The findings are threefold.

• A small group of pioneering companies who recognize the growing business case are moving natural capital management forward and expect to embed it into their business within the next three years. The rationale is they will be much better positioned than other companies to manage and thrive in the resource-constrained world. In particular, availability of freshwater, renewable energy, climate regulation, fiber, and food were identified as the most important natural capital risks over the next 3-5 years.
• Delaying the measurement and management of natural capital carries a significant business risk for companies in terms of the availability of key raw materials and maintaining sustainable competitive advantage.
• Current barriers to change at the organizational level include a lack of harmonized methods to measure, prioritize, and integrate natural capital into the business and organizations analyzing their impacts beyond their organizational boundary into their supply chains.

The 24 companies featured in the Corporate EcoForum report, The New Business Imperative: Valuing Natural Capital, are taking a lead by uniting in the view that immediate leadership to safeguard well-functioning ecosystems is a business imperative, not a matter of philanthropy. Companies cited in the report include Puma, Nike, Lockheed Martin, GM, Disney, Enterprise, TD, Coca Cola, Patagonia, Xerox, Unilever, Kimberly-Clark, and Marriott.

5. The TEEB for Business Coalition

The TEEB for Business Coalition is developing tools and guidance to successfully incorporate natural capital into strategy and decision-making processes. This involves companies reflecting the true social and environmental costs of depleting natural capital and creating benefits, such as restoring natural environments and developing social and human capital. The coalition is a global platform for supporting the development of widely agreed-on methods for natural and social capital valuation in business. This work involves considering a valuation framework that can define what to measure and why.

A number of organizations are supporting the coalition, including the Institute of Chartered Accountants in England and Wales (a founding member), IFAC, the Chartered Institute of Management Accountants, the World Business Council for Sustainable Development, the International Union for Conservation of Nature, the World Wildlife Fund UK, and the Global Reporting Initiative, all of which are engaged in developing and furthering the coalition. IFAC is represented by PAIB Committee member Ian Rushby, who is also a trustee of the International Institute for Environment and Development.

TEEB for Business Coalition is holding its annual conference in Singapore November 18-19, 2013, in conjunction with the Responsible Business Forum. Additional details will be shared in later issues of the PAIB Committee’s eNews and on the TEEB for Business Coalition website.

6. Tracking a Carbon Bubble

The Carbon Tracker Initiative report, Unburnable Carbon, calculates that only 31% of the world's currently indicated fossil fuel reserves, which equate to 2,860bn tonnes of carbon dioxide, could be burned for an 80% chance of keeping below a 2°C global temperature rise, which is commonly regarded as the threshold within which to avoid dangerous climate change. For a 50% chance of 2°C or less, only 38% could be burned.

This information has potentially significant implication for loss of value to investors given how far reaching carbon is for financial markets—the top 100 coal and top 100 oil and gas companies have a combined value of US$7.42 trillion as of February 2011. Additionally, the countries with the largest greenhouse gas potential in reserves on their stock exchanges are Russia, the United States, and the United Kingdom and the stock exchanges of London, Sao Paulo, Moscow, Australia, and Toronto all have an estimated 20-30% of their market capitalization connected to fossil fuels. Carbon and fossil fuels, and decisions regarding their use and value, can have significant impacts on financial markets and futures around the world.

This carbon bubble leads to a reporting challenge, particularly for fossil fuel companies. For these companies, it is not necessarily the scale of operational emissions that is the strategic challenge but the emissions associated with their products, which are currently locked into their reserves. The potential carbon footprints of reserves may not be adequately transparent with obsolete data masking the full risks facing fossil fuel reserves. Consequently, companies need to consider moving beyond simply annually reporting last year’s emissions flows to a more forward-looking analysis of carbon stocks.

7. Innovative Organizations

Becoming Net Positive

An increasing number of companies, including Coca Cola and retail organizations Kingfisher and Ikea, are striving to become net positive, which means that they will give back more than they take in relation to critical environmental and social factors upon which their business models depend.

For example, for a do-it-yourself (DIY) business such as Kingfisher, timber is an essential raw material. It depends on a forest area approximately the size of Switzerland. It aspires to create more forest than it needs to develop products. Beyond timber, Ikea strives for resource independence, by encouraging all waste be turned into resources; energy independence, by being a leader in renewable energy, and becoming more energy efficient throughout its operations and supply chain. Coca Cola aims to return as much water to nature as it uses in its products and their production.

Indian conglomerate ITC reports that it is carbon positive (by sequestering or storing twice the amount of carbon dioxide emissions that it emits through, for example, farm forestry initiatives, which add to plantation sizes); water positive (by creating three times more rainwater harvesting potential than the net water consumed by its operations); and waste positive (by recycling its own paper and fly ash, a byproduct of coal combustion, as well as buying other company’s waste paper to use in its paperboard operations).

The key success factors behind such initiatives include:

• providing vision, leadership, and commitment from the top of the organization to be sustainably successful;
• applying a financial mindset by establishing a business case and understanding how sustainability actions contribute directly to business value, either through revenue generation, cost control, risk management, or innovation;
• setting aspirational and challenging goals and targets;
• connecting sustainability goals to strategy by identifying significant drivers and subjecting these aspects to a systematic management process that involves setting and cascading targets and performance measures to facilitate the delivery of vision and strategy;
• collaborating closely with customers and suppliers;
• measuring the drivers of business externalities, such as greenhouse gas emissions and resulting impacts, such as climate change (this involves data collection, analysis, and interpretation, and integrating data requirements into management and/or accounting systems); and
• communicating with stakeholders through high-quality reports and disclosures.

An Innovative Approach to Disclosure: PUMA Environmental P&L Methodology

In 2011, PUMA became the first major company to release an environmental profit and loss (P&L) statement and put an economic value on greenhouse gas emissions and water consumption (see PAIB Committee eNews July 2011 for more information). PUMA started on its journey to establish how much it would need to pay for the services nature provides so that PUMA can produce, market, and distribute footwear, apparel, and accessories made of leather, cotton, rubber, or plastic for the long term. A P&L methodology utilizes the essence of an accounting framework when monetizing environmental impacts. The economic valuation of PUMA’s environmental impact provides a wake-up call and reveals where it has to direct its sustainability initiatives to make real improvements in reducing its footprint. These include identifying more sustainable materials, investigating the development of broadly-accepted definitions of sustainable cotton and rubber, and looking for additional opportunities to reduce greenhouse gas emissions and other environmental impacts.

8. Other Activities and Resources

• Corporation 2020 is a movement that calls for new ways for corporations to operate given that the legal status and business persona of today’s corporation are almost a hundred years old.
• Forum for the Future is an independent non-profit that works globally with business and government to inspire new thinking, build creative partnerships, and develop practical solutions.
• Global Reporting Initiative (GRI)’s Approach for Reporting on Ecosystem Services: Incorporating Ecosystem Services into an Organization’s Performance Disclosure suggests indicators organizations could use to assess and report their impacts on ecosystem services. In cooperation with the United Nations Environment Programme’s World Conservation Monitoring Centre and the Dutch consultancy firm CREM, GRI highlights approaches for developing sustainability reporting indicators to help companies report their impacts and reliance on ecosystem services. Additionally, the fourth generation of the GRI’s Sustainability Reporting Guidelines (G4) is available on the GRI website.
• Natural Capital Declaration is a declaration by finance-sector CEOs representing commitments made at the Rio+20 Earth Summit to work toward integrating natural capital considerations into financial products and services. The Declaration is convened and facilitated by the United Nations Environment Programme Finance Initiative, the Global Canopy Programme, and the Center for Sustainability Studies of the Business Administration School of the Getulio Vargas Foundation.
• The Prince of Wales’ Accounting for Sustainability Project includes an initiative on valuing natural capital and is a co-founding member of the TEEB Business Coalition.
• The B Team is a not-for-profit initiative that has been formed by a group of global business leaders to create a future where the purpose of business is to be a driving force for social, environmental, and economic benefit.
  • UK Department for Environment, Food, and Rural Assets (DEFRA)’s Ecosystem Markets Task Force was established to respond to the continuing degradation of ecosystems and loss of biodiversity and highlights efforts by the UK government to become a global leader in measuring natural capital.
  • World Bank Wealth Accounting and the Valuation of Ecosystem Services (WAVES) is a global partnership to promote sustainable development by ensuring that the national accounts used to measure and plan for economic growth include the value of natural resources.
  • The World Business Council for Sustainable Development (WBCSD)’s Framework for Corporate Ecosystem Evaluation provides a framework for improving corporate decision making through valuing ecosystem services. The guide puts into operation TEEB’s Mainstreaming the Economic of Nature, released in October 2010, which also includes reference to the international mining company Rio Tinto, which adopted a net positive impact on biodiversity as a long-term goal.
  • WBCSD also recently published Eco4Biz: Ecosystem Services and Biodiversity Tools to Support Business Decision Making. The report provides a guide to help companies sift through an emerging family of tools to help them assess and manage their impacts and dependencies on natural capital. Eco4Biz also features a decision tree with two questions corporate managers might ask: a) At what scale would you like to carry out an assessment—global, landscape (including individual site and portfolio of sites), or product level? and b) What outputs would best support your decision-making—a map (including supporting reports), a quantitative value, or a score showing priority areas?

Welcome to IFAC's Translations and Permissions eNews.

In This Issue:

1. Ibero-American Cooperation Progresses Spanish Translations
2. Russian Speakers, Standard Setters Convene on Adoption of International Standards
3. Newly Available Translations: January–May 2013
4. What to Watch for—French PAO Development Committee “Toolkit”
5. SMP Quick Poll—Open in 16 Languages
6. Copyright Statements Revised; See Updated T&P Policy Statements

1. Ibero-American Cooperation Progresses Spanish Translations

In October 2012, IFAC and its member bodies in Spain, Mexico, and Argentina formally agreed to establish an Ibero-American Cooperation Framework to collaborate on a long-term, sustainable process for achieving a single, Spanish translation of international standards and IFAC publications (the “IberAm project”). In February, the IberAm project’s Executive Committee held an inaugural meeting to agree on an annual translations plan, formulated following a gap analysis to see what publications had not yet been translated into Spanish.

The Executive Committee also appointed a chair of the Review Committee. Spanish-speaking IFAC member bodies have been invited to nominate candidates from among their membership to fill the five remaining open positions on the Review Committee. Qualified candidates will have sufficient experience in translation and applying international standards, and be well respected both within and outside of the profession. Nominations should be emailed to internacional@icjce.es to the attention of D. Bruno Mayoral. The successful candidates will be appointed and announced in late July.

Under the agreed plan, a Spanish translation of existing standards will be completed by the end of 2013; this includes the International Standards on Auditing and other standards issued by the International Auditing and Assurance Standards Board (IAASB); the Code of Ethics for Professional Accountants; International Education Standards; and International Public Sector Accounting Standards. The 2013 IAASB Handbook is expected to be released in July 2013; under the plan, the goal is to have the Spanish translation available within approximately six months of the English release.

To this end, the three IFAC member bodies have also procured translation memory software as a collaborative tool to help ensure the quality and consistency of the translations and to assist in reducing translation costs. With the software, it is not necessary to translate the same phrase twice. For more information on the advantages of translation memory software, especially as it relates to translation of the international standards and IFAC publications, please contact permissions@ifac.org.

In addition, Instituto Nacional de Contadores Públicos (INCP) – Colombia has agreed to translate IFAC news items into Spanish. See the Spanish News & Events pages to access translated newsletters and press releases. Translations of IFAC Update and Global Digest are available to member designees in the password-protected IFAC Extranet. For more information on Spanish-language or other translations, please visit the IFAC Translations Database.

2. Russian Speakers, Standard Setters Convene on Adoption of International Standards

Representatives from former Soviet republics in Europe and Central Asia gathered last month in London with IFAC, the International Auditing and Assurance Standards Board (IAASB), and the International Accounting Standards Board (IASB) to foster dialogue and cooperation in relation to the development, adoption, and implementation of international standards, in the context of relevant regulatory frameworks.

The two-day conference, hosted by the Association of Chartered Certified Accountants, included meetings with national professional accountancy organizations and the three organizing bodies regarding experiences with the application of International Financial Reporting Standards, adoption and implementation of International Standards on Auditing (ISAs), and quality assurance requirements. The translation of IAASB and IASB pronouncements into Russian and other languages on an ongoing basis was also a significant topic of discussion.

3. Newly Available Translations: January–May 2013

• Bulgarian—Good Practice Checklist for Small Business (2012)
• Chinese—Global Leadership Survey (2011, 2012)
• Czech—Handbook of the Code of Ethics for Professional Accountants (2012)
• Danish—International Standard on Assurance Engagements (ISAE) 3402, Assurance Reports on Controls at a Service Organization (2009); International Standard on Review Engagements 2400, Engagements to Review Historical Financial Statements (2012); International Standard on Auditing (ISA) 610 (Revised), Using the Work of Internal Auditors (2012); ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment (2012)
• Dutch—ISAE 3402, Assurance Reports on Controls at a Service Organization (2009); Guide to Practice Management for Small- and Medium-Sized Practices, Third Edition (2012)
• French—Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities (2012)
• German—Tomorrow’s Firm and the Role of Value Pricing: IFAC Interview with Ronald J. Baker (2013)
• Hungarian—Handbook of the Code of Ethics for Professional Accountants (2010), “Integrating Governance throughout an Organization Helps Achieve Sustainable Success” (2011)
• Korean—The Role of Ethics in Restoring Confidence: Interview with International Ethics Standards Board for Accountants (IESBA) Chair Jörgen Holmquist (2013)
• Latvian—Guide to Quality Control for Small- and Medium-Sized Practices (2011)
• Lithuanian—Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition (2011)
• Polish—International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity (2012)
• Romanian—Competent and Versatile: How Professional Accountants in Business Drive Sustainable Success (2011), International Good Practice Guidance: Principles for Effective Business Reporting Processes (2013), Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements (2012)
• Russian—Handbook of International Public Sector Accounting Pronouncements (2011)
• Serbian—Guide to Quality Control for Small- and Medium-Sized Practices, Third Edition (2011), Handbook of the Code of Ethics for Professional Accountants (2012)
• Spanish—Guide to Practice Management for Small- and Medium-Sized Practices (2011), International Auditing and Assurance Standards Board eNews March 2013 (2013),March Global Digest (2013), April Global Digest (2013), IFAC Update March 2013 (2013), IFAC Update April 2013 (2013), IESBA eNews April 2013 (2013), SMP eNews April 2013 (2013), International Public Sector Accounting Standards Board eNews April 2013 (2013)
• Swedish—Guide to Practice Management for Small- and Medium-Sized Practices (2011), Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition - Volume 2 (2011)
• Turkish—Handbook of International Quality Control, Auditing Review, Other Assurance, and Related Services Pronouncements (2012), Handbook of the Code of Ethics For Professional Accountants (2012), IFAC SMP Quick Poll: 2012 Round-Up (2013)
• Vietnamese—Handbook of International Standards on Auditing and Quality Control (2009)

Access these and additional translations in IFAC’s Translations Database. Check back regularly for updates.

4. What to Watch for—French PAO Development Committee “Toolkit”

Establishing and Developing a Professional Accountancy Body covers the roles and responsibilities of a professional accountancy organization, education and examinations, and capacity development; Tools and Resources to Support the Development of the Accounting Profession includes case studies, practical illustrations, and supplementary guidance. Together they form the Professional Accountancy Organization (PAO) Development Committee “Toolkit,” developed to support PAOs in expanding and strengthening their role and responsibilities. Ordre des Experts Comptables de Tunisie is currently translating the nearly 300-page set into French. Look for access to the completed translation by year end in the Translations Database.

5. SMP Quick Poll—Open in 16 Languages

Are you a practitioner operating in a small- or medium-sized practice (SMP)? Then take the IFAC SMP Quick Poll. This edition of the poll is being conducted in 16 languages—English, Arabic, Chinese, Dutch/Flemish, French, German, Hebrew, Italian, Japanese, Korean, Portuguese, Romanian, Russian, Spanish, Swedish, and Turkish—thanks to the generous translation support of IFAC member bodies. The poll should take only three minutes to complete and is being conducted semi-annually by IFAC in 2013 to take a snapshot of the key issues confronting SMPs and their small- and medium-sized entity (SME) clients. Polling will close on June 21, 2013. Look for the results in the next issue of the SMP eNews (register and subscribe here).

See the results from previous polls on our website.

6. Copyright Statements Revised; See Updated T&P Policy Statements

IFAC’s Translations & Permissions (T&P) Policies, Policy for Translating and Reproducing Standards Published by the International Federation of Accountants and Policy for Reproducing, or Translating and Reproducing, Publications of the International Federation of Accountants, have been updated to reflect our new copyright statement. Please visit the IFAC website to download the newest forms when requesting permission to translate and reproduce IFAC publications. Requesting permission should be done prior to commencing any translation work, as it helps ensure proper authorization and assistance from IFAC and helps to avoid duplication of effort and resources. Guidelines are also available for use of IFAC graphics and logos on translated publications. If you have any questions, see our FAQs or email permissions@ifac.org.

Welcome to IFAC's Professional Accountants in Business Committee (PAIB) eNews.

In This Issue

GOVERNANCE, RISK, AND CONTROL
1. Internal Control Guidance Published as Executive Summary; Available for Local Customization
2. IFAC Staff Discuss Risk Management at ICAP CFO Conference
3. Updated Internal Control Framework Released by COSO
4. Conference on ISO Risk Management Standard to be Held in Toronto 

INTEGRATED AND SUSTAINABILITY REPORTING
5. IIRC Releases Integrated Reporting Framework
6. Proposed Sustainability Accounting Standards Released by SASB
7. GRI Global Conference Approaching
8. New Report Argues Business Case for Natural Capital

EVENTS
9. World Congross of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

GOVERNANCE, RISK AND CONTROL 

1. Internal Control Guidance Highlights Published as Executive Summary; Available for Local Customization

The Professional Accountants in Business Committee recently published Evaluating and Improving Internal Control in Organizations: Executive Summary, part of the International Good Practice Guidance series. The condensed version of the guidance summarizes the principles and the importance of effective systems of internal control, as well as explains some of the pitfalls that can be avoided. The executive summary is available to IFAC members and associates for local customization and/or translation. If your organization is interested, please visit the Translations and Permissions page of the IFAC website for the permission request form, which will need to be completed and submitted to permissions@ifac.org. If you have any questions, please contact Vincent Tophoff.

2. IFAC Staff Discuss Risk Management at ICAP CFO Conference

IFAC staff recently participated in the Institute of Chartered Accountants of Pakistan (ICAP)’s CFO Conference, lecturing on current trends and thinking in risk management and best practices. The presentation, Strategic Risk Management in the Face of Uncertainty and Unexpected Risks, is available on the IFAC website.

3. Updated Internal Control Framework Released by COSO

The Committee of Sponsoring Organizations of the Treadway Commission (COSO)  recently released the revised version of Internal Control-Integrated Framework to improve implementation of internal control.

Changes within the Framework include:

• articulating the fundamental concepts underlying the five components by highlighting 17 guiding principles and more detailed points of focus;
• accounting for environmental changes, such as increased globalization, complexity, and regulation, the growing importance of technology, and increased expectations for better governance oversight and fraud prevention;
• expanding the operations objective from “effective and efficient use of the entity’s resources” to “effectiveness and efficiency of the entity’s operations, including operational and financial performance goals, and safeguarding assets against loss”;
• broadening the reporting objective from “published financial statements” to “internal and external financial and non-financial reporting”; and
• providing additional approaches and examples relevant to operations, compliance, and non-financial reporting objectives.

The PAIB Committee has been closely involved in the revision, with two representatives on the COSO advisory council for the project. The PAIB Committee also submitted formal comment letters to both COSO internal control exposure drafts.

4. Conference on ISO Risk Management Standard to be Held in Toronto

The 2^nd International Conference on ISO 31000 [Risk Management] Standard will be held May 28-31, 2013, in Toronto, Canada. ISO 3100—Risk Management provides principles, framework, and a process for managing risk. It can help organizations increase the likelihood of achieving objectives, improve the identification of opportunities and threats, and effectively allocate and use resources for risk treatment. IFAC staff will be presenting on how to leverage ISO 31000 for effective integration of risk management and internal control.

INTEGRATED AND SUSTAINABILITY REPORTING 

5. IIRC Releases Integrated Reporting Framework

The landmark International Integrated Reporting Framework has been released by the International Integrated Reporting Council (IIRC). The Framework is expected to be a critical tool for businesses as they create integrated reports and drive integrated thinking in their organizations. The IIRC is asking all stakeholders to provide feedback on the Framework during its public consultation period, which closes July 15, 2013. The Framework has been released in English but will also be available soon in additional languages. IFAC, a partner in this global effort, encourages all professional accountants to provide feedback.

In support of the Framework, IFAC, the Chartered Institute of Management Accountants, and PwC released Business Model: A Background Paper for Integrated Reporting, which addresses the wide variation in how organizations define their business models and approaches. The paper provides background and context on how business model reporting should be undertaken in an integrated report and suggests content for business model reporting requirements, which are included in the proposed Framework. The proposed definition and guidance in the paper aim to bridge the varied interpretations by highlighting commonalities and ensuring a broad and inclusive application across industries and sectors. Additional background papers are available on the IIRC website.

6. Proposed Sustainability Accounting Standards Released by SASB

The Sustainability Accounting Standards Board (SASB) has released a set of proposed sustainability accounting standards for the financial sector. Industries included in this sector are: asset management and custody activities, investment banking and brokerage, commercial banking, consumer finance, mortgage finance, security and commodity exchanges, and insurance. The public comment period closes on June 14, 2013.

7. GRI Global Conference Approaching

The Global Reporting Initiative (GRI) is holding the Global Conference on Sustainability and Reporting in Amsterdam, the Netherlands, May 22-24, 2013. The conference will provide the opportunity to connect, share successful strategies, and collaborate on efforts to build a sustainable global economy. Additionally, the latest evolution of GRI’s Sustainability Reporting Guidelines (G4) will be released at the conference. GRI expects more than 1,500 leaders and practitioners from over 70 countries, including representatives from business, financial institutions, civil society, international organizations, governments, labor, and academia.

8. New Report Argues Business Case for Natural Capital

Organisational Change for Natural Capital Management, released by The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition, describes how business leaders can strategize and implement changes in organizational behavior related to valuing natural capital in their companies. The TEEB for Business Coalition, which includes IFAC, supports the development of natural and social capital valuation in business, including providing a compelling economic case for the conservation of natural capital as the cornerstone of green economic policies. 

EVENTS

9. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this can’t-miss IFAC event, held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will set the tone for the future

The WCOA also affords an unparalleled opportunity for organizations and firms to share their projects and visions with the world by taking advantage of one of our carefully crafted sponsorship packages. There are numerous options so you’ll be able to select the one that best suits your organization’s unique strategy and goals. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.

Bienvenido al eNews del Comité de Firmas Pequeñas y Medianas (SMP) de la IFAC.

SOSTENIBILIDAD

1. Sostenibilidad: Retos y Oportunidades para SMPs y PYMES
2. Nueva Lista de Verificación de Buenas Prácticas Abarca Gestión Ambiental

NORMAS Y REGULACIÓN

3. Cerrarán Pronto: Consultas del  IAASB sobre Marco de Calidad de Auditoría
4. Comité SMP Contribuye en los Proyectos Claves y la Planeación Estratégica de los Emisores de Normas
5. IFRS para Actualización de PYMES

EVENTOS
6. Inscripciones Cerrarán Pronto: Foro SMP de la IFAC 2013
7. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles

SOSTENIBILIDAD

1. Sostenibilidad: Retos y Oportunidades para SMPs y PYMES

Las Pequeñas y Medianas Empresas (PYMES) podrían pensar que la sostenibilidad es relevante únicamente en las grandes compañías. Tal vez consideran que no pueden darse el lujo de ser sostenibles, que la medición y la gestión ambiental se traducirían en una carga costosa e innecesaria. Adicionalmente, sus contadores, tanto aquellos empleados por la empresa (contadores en empresas) como aquellos que proveen servicios a la empresa (contadores en la práctica), le dirán que es muy difícil que las PYMES adopten la sostenibilidad. No obstante, aquellas PYMES que integran la sostenibilidad en su estrategia central de negocios pueden beneficiarse de costos menores, un riesgo reducido y nuevas oportunidades. Por otra parte, sus contadores -quienes generalmente operan en SMPs- podrían desempeñar un rol clave.  

PYMES y los Beneficios de la Sostenibilidad

Las PYMES son fundamentalmente importantes para la salud y estabilidad económica global: ellas representan más del 95% de los negocios y la mayor parte del producto bruto interno (PBI) del sector privado, riqueza y creación de empleo e impactos sociales y ambientales. Entretanto, existe una inmensa presión frente al ambiente natural y se reconoce que los recursos finitos se están agotando rápidamente. Actualmente, las PYMES se enfrentan a una presión de medición y gestión de su impacto sobre el medioambiente. Forman parte esencial de la cadena de suministro donde existe una demanda creciente frente a la gestión de la sostenibilidad, tanto por parte de los consumidores como de los proveedores –particularmente para las PYMES que desean asegurar contratos con gobiernos o compañías más grandes. Las PYMES deben garantizar igualmente que tienen acceso a los recursos que necesitan a fin de continuar ofreciendo sus productos y servicios en el futuro.     

Sin embargo, muchas PYMES aún consideran que no es necesario abarcar los temas de sostenibilidad. Nuestra encuesta SMP global indica que existen otros aspectos más urgentes que preocupan a las empresas, incluyendo temas económicos y el cumplimiento con nuevas normas, lo cual hace que la sostenibilidad no sea el aspecto más importante en su lista de prioridades.

Esta podría ser la razón por la cual pocas SMPs ofrecen actualmente servicios de sostenibilidad. Sin embargo, a largo plazo, la sostenibilidad será un tema inevitable.

La buena noticia es que existe una gran cantidad de evidencia que indica que las iniciativas de sostenibilidad, como aquellas para reducir el impacto ecológico de las PYMES, permiten igualmente mejorar su Balance...Leer Más.

Únete al Debate en nuestra Comunidad SMP LinkedIn. Referirse a artículos SMP adicionales, incluyendo la reciente entrevista con Ron Baker, La Firma del Mañana y el Rol del Valor Justo. 

2. Nueva Lista de Verificación de Buenas Prácticas Abarca Gestión Ambiental  

La segunda edición de la Lista de Verificación de Buenas Prácticas para Pequeñas Empresas ya se encuentra disponible. Esta lista de verificación de múltiples partes contiene una sección sobre la gestión ambiental. Otras secciones cubren tareas financieras y de gestión estratégica y requerimientos regulatorios. La lista de verificación representa principalmente una herramienta de mercadeo o de diagnosis para las SMPs, a fin de permitirles determinar la asesoría que podría necesitar un cliente y ayudarles a administrar sus propios negocios. Seis traducciones de la lista de verificación han sido completadas o están en progreso. Referirse a la Base de Datos de Traducciones para mayor información.

NORMAS Y REGULACIÓN

3. Cerrarán Pronto: Consultas del IAASB sobre Marco de Calidad de Auditoría

El periodo de comentario atribuido al Documento de Consulta, Un Marco para la Calidad de Auditoría, del Consejo de Normas Internacionales de Auditoría y Aseguramiento (IAASB) cerrará el 15 de Mayo, 2013. A través del marco propuesto, el IAASB pretende aumentar el conocimiento de los elementos claves de la calidad de auditoria, instar a las partes interesadas a explorar maneras de mejorar la calidad de auditoría, y facilitar un mayor diálogo sobre el tema. El Comité SMP entregará una carta de comentario e invita a las SMPs individuales a comentar igualmente. Referirse al Resumen At-a-Glance.

4. Comité SMP Contribuye en los Proyectos Claves y la Planeación Estratégica de los Emisores de Normas 

IAASB

El Comité SMP entregó sus comentarios al Consejo de Normas Internacionales de Auditoría y Aseguramiento (IAASB) sobre su proyecto del informe del auditor, antes de su junta en Febrero. Referirse a la Página de la Junta de Febrero del IAASB para visualizar los documentos, los puntos destacados y el podcast. Antes de la Junta de Abril del IAASB, el comité entregará mayores comentarios sobre este proyecto al igual que sobre el trabajo del IAASB relacionado con las revelaciones, el monitoreo de la implementación de Normas Internacionales de Auditoría (NIA) y la Norma Internacional sobre Contratos de Aseguramiento (ISAE) 3000.

El IAASB desea recibir comentarios, opiniones y perspectivas de todas las partes interesadas a fin de moldear su dirección futura para el 2015 y en adelante, a través de la Encuesta de Revisión Estratégica. Las respuestas a la encuesta serán la base para el desarrollo de un Documento de Consulta que será emitido a finales del año 3013. El Comité SMP ha planeado enviar una respuesta e invita igualmente a las SMPs individuales a comentar.

IESBA

A inicio de marzo, el comité respondió a la encuesta en línea del Consejo de Normas Internacionales de Ética para Contadores (IESBA), lo cual se llevó a cabo como parte de la revisión estratégica y el plan de trabajo del IESBA para el periodo 2014-2016. La encuesta ha cerrado y el IESBA revisará las respuestas en sus próximas juntas.

5. IFRS para Actualización de PYMES

En el 2012, el Consejo de Normas Internacionales de Contabilidad (IASB) emitió una Solicitud de Información (RFI por sus siglas en inglés) con el objetivo de dar inicio a su revisión exhaustiva de la Normas Internacionales de Información Financiera para Pequeñas y Medianas Empresas (IFRS para PYMES). El objetivo de la RFI era consultar de manera pública qué tan necesario era enmendar la norma. El mes pasado, el IASB inició un debate acerca del alcance de la norma, incluyendo la interrogante sobre el uso de la norma por parte de entidades de responsabilidad pública. Referirse a la Página de la Junta de Marzo del IASB para acceder a los documentos y el registro audio. El resumen de las decisiones se encuentra disponible en la Actualización IASB de Marzo.

EVENTOS

6. Inscripciones Cerrarán Pronto: Foro SMP de la IFAC 2013

El Foro SMP 2013 de la IFAC se llevará a cabo en Kampala, Uganda, el 5 de Junio de 2013 y será organizado por el Instituto de Contadores Públicos Certificados de Uganda (ICPAU) y la Federación Panafricana de Contadores (PAFA). Cada organización miembro de la IFAC puede enviar hasta diez delegados, quienes deben ser los encargados de los asuntos SMP/PYME en su organización. Los formatos de inscripción han sido enviados a las organizaciones miembros de la IFAC. Si usted es un miembro individual de una organización miembro de la IFAC y desea participar, favor informar su interés a su organización tan pronto como sea posible, dado que la fecha límite de registro es Abril 30, 2013. Mayor información será publicada en la página www.ifac.org/2013SMPForum a medida que sea emitida.

7. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles  

El Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) será anfitrión del siguiente Congreso Mundial de Contadores (WCOA) en Roma, Italia en el 2014. Titulado Visión 2020: Aprendiendo del Pasado, Creando el Futuro, el WCOA 2014 se realizará en Noviembre 10-13 en el  Auditorium Parco della Musica. Más de 4,000 profesionales del mundo entero se reunirán en este evento de la IFAC que se lleva a cabo cada cuatro años. El WCOA 2014 analizará el pasado y explorará la evolución de la profesión contable y mirará hacia el futuro a fin de presentar las innovaciones que moldearán el futuro de la profesión.

El WCOA ofrece igualmente una plataforma a fin que las organizaciones y firmas adapten sus proyectos y visiones a través de diferentes oportunidades de patrocinio. Para mayor información, contactar a info@wcoa2014rome.com o Dimarco@wcoa2014rome.com.

Gracias por registrarse para recibir el eNews del Consejo de Normas Internacionales de Ética para Contadores (IESBA). Esta edición del eNews del IESBA ofrece un resumen de decisiones tomadas durante la junta del IESBA llevada a cabo en marzo 11-13 de 2013, en Nueva York, Estados Unidos. Referirse a la Página de la junta para visualizar los puntos destacados de la junta, incluyendo un resumen en versión podcast y documentos de la agenda. 

1. Respondiendo a un Acto Ilegal Sospechado
2. Asociación de Personal Directivo (incluyendo Rotación de Socios) con un Cliente de Auditoría
3. Revisión de la Parte C del Código
4. Estructura del Código
5. Definición de Los Encargados del Gobierno Corporativo
6. Asuntos Emergentes y Alcance
7. Servicios Diferentes al Aseguramiento
8. Próximas Juntas
9. Directriz Reglamentaria de la CE vs. Código del IESBA: la FEE Compara los Requerimientos de Independencia
10. El IESBA está Contratando
11. Manual IESBA 2013
12. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles

1. Respondiendo a un Acto Ilegal Sospechado

El IESBA consideró los comentarios de más de 70 replicantes al Borrador de Consulta (ED), Respondiendo a un Acto Ilegal Sospechado. Entre los temas abarcados, se incluyó: la divulgación de un acto ilegal sospechado a la autoridad adecuada; la divulgación al auditor externo, con la expectativa de divulgación a la autoridad adecuada; la prueba de información e intensificación del “interés público”; el requerimiento para confirmar o disipar la sospecha; los tipos de actos ilegales a ser revelados; y la interacción de la norma propuesta con las Normas Internacionales de Auditoría (NIAs).  

El IESBA continuará considerando los temas claves y las acciones futuras durante su junta de Junio de 2013.

2. Asociación de Personal Directivo (incluyendo Rotación de Socios) con un Cliente de Auditoría 

El IESBA recibió una actualización sobre el proyecto de revisión de las largas provisiones de asociación incluidas en la Sección 290 del Código de Ética para Contadores Profesionales (el Código) a fin de garantizar que continúan proporcionando una protección contra la familiaridad y las amenazas de auto-interés que surgen de la larga asociación con el cliente de auditoría. Entre otros asuntos, el IESBA abarcó el enfoque para la investigación de las provisiones sobre la rotación de socios en los territorios principales y el sondeo de las opiniones de las partes interesadas sobre las amenazas asociadas con la asociación.

3. Revisión de la Parte C del Código

El IESBA aprobó una propuesta para iniciar un proyecto de revisión de la Parte C del Código que considera a los Contadores Profesionales en Empresas (PAIB) a fin de garantizar que las provisiones de la Parte C del Código son sólidas y adecuadas. La Fase I del proyecto revisará las Secciones 300, 320, 330, y 340 del Código. Particularmente, esta fase se enfocará en la presión aplicada por los superiores y demás para dedicarse a actos ilegales y poco éticos, la responsabilidad de los PAIB en la producción de estados financieros que representen de manera fiel los aspectos económicos de las transacciones, y demás asuntos relacionados. La fase II del proyecto abarcará la Sección 350, la cual está relacionada con pagos fáciles y sobornos. El IESBA desarrollará más a fondo el proyecto en su junta de Junio de 2013.

4. Estructura del Código

El IESBA consideró términos de referencia y un informe de estatus inicial del grupo de trabajo creado para asesorar al Consejo sobre las maneras en que se puede mejorar la lectura, el entendimiento y el acceso al Código. Entre otros asuntos, el IESBA debatió sobre los objetivos, el alcance y los tiempos de la iniciativa, al igual que el enfoque frente al trabajo. El consejo acordó que era necesario reflexionar cuidadosamente sobre la distinción a hacer entre las opciones que se podrían considerar a corto plazo y aquellas que se podrían considerar a largo plazo y que permitirían una revisión más sólida de la estructura del Código. El consejo solicitó al grupo de trabajo explorar estas opciones y emprender la investigación para definir el camino a seguir.   

5. Definición de los Encargadosdel Gobierno Corporativo

El IESBA tomó en cuenta los comentarios recibidos sobre su Borrador de Consulta acerca de un cambio propuesto en relación con la definición del término “encargados del gobierno”. En principio, el IESBA acordó modificar la definición propuesta debido a los comentarios de los replicantes. El IESBA considerará la definición final para aprobación en su junta de Junio 2013, luego de analizarlo con su Grupo Consultivo Asesor (CAG) en la revisión de comentarios que se llevará a cabo en Abril 2013.

6. Asuntos Emergentes y Alcance

El IESBA acordó crear un Grupo de Trabajo sobre Asuntos Emergentes y Alcance con el fin de asesorar el consejo sobre asuntos emergentes y desarrollos internacionales de relevancia para el trabajo del IESBA y para la estrategia de alcance del consejo. El IESBA revisará borradores de términos de referencia para el Grupo de Trabajo en su junta de Junio 2013.

7. Servicios Diferentes al Aseguramiento

El IESBA recibió una breve actualización sobre el enfoque de la Fuerza de Trabajo frente a la recopilación de información para fines de definición del alcance del proyecto. El IESBA considerará la información recopilada y las propuestas de la Fuerza de Trabajo en cuanto al alcance del proyecto en la junta del IESBA en junio de 2013.

8. Próximas Juntas

Las juntas del IESBA y del CAG del IESBA son abiertas al público. El CAG del IESBA realizará su nueva junta en Nueva York, Estados Unidos el 10 de Abril de 2013. La próxima junta del IESBA se llevará a cabo en Nueva York, el 10-12 de junio, 2013.

Para mayor información e inscripción para participar como observador en la junta del IESBA o del CAG del IESBA, favor visitar las páginas Juntas del IESBA o Juntas del CAG del IESBA, respectivamente. 

9. Directriz Reglamentaria de Auditoría de la CE vs. el Código del IESBA: la FEE Compara los Requerimientos de Independencia

En un estudio emitido en Febrero 2013, la Fédération des Experts Comptables Européens (FEE) comparó las provisiones en los marcos de Estados Unidos sobre la independencia del auditor (Directriz Reglamentaria de Auditoría de 2006 y la Recomendación de 2002 sobre la Independencia Reglamentaria de Auditoría en los Estados Unidos) y las provisiones de independencia incluidas en el Código IESBA.

Entre otros asuntos, el estudio reveló que el Código es más sólido en relación con las auditorías de entidades de interés público. En particular, el Código incluye provisiones estrictas para los servicios diferentes a la auditoría y que son incompatibles con la provisión de servicios de auditoría. El estudio reveló igualmente que el Código abarca otros asuntos que podrían ser considerados e incluidos en una ley futura de auditoría en la UE.

10. El IESBA está Contratando

El IESBA busca actualmente un gerente técnico para su equipo de trabajo ubicado en Nueva York. Los candidatos calificados deben contar con experiencia a nivel de gerente o alto gerente en la práctica profesional, en un organismo contable profesional, una oficina de auditoría del sector público, o similar. Para una descripción completa del cargo, las competencias y la experiencia requeridas, referirse a la página Trabajando en la IFAC. Los candidatos calificados pueden enviar su hoja de vida a jobs@ifac.org.

11. Manual IESBA 2013

El IESBA está desarrollando el Manual 2013 del Código de Ética para Contadores Profesionales. Éste contendrá los pronunciamientos finales que abarcan los incumplimientos de las provisiones en el Código y los conflictos de interés, al igual que la definición revisada del término “equipo de auditoría.” El Manual 2013 será publicado en el segundo trimestre de 2013. Para acceder a la edición actual, referirse al Manual IESBA 2012.

12. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles  

El Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) será anfitrión del siguiente Congreso Mundial de Contadores (WCOA) en Roma, Italia en el 2014. Titulado Visión 2020: Aprendiendo del Pasado, Creando el Futuro, el WCOA 2014 se realizará en Noviembre 10-13 en el  Auditorium Parco della Musica. Más de 4,000 profesionales del mundo entero se reunirán en este evento de la IFAC que se lleva a cabo cada cuatro años. El WCOA 2014 analizará el pasado y explorará la evolución de la profesión contable y mirará hacia el futuro a fin de presentar las innovaciones que moldearán el futuro de la profesión.

El WCOA ofrece igualmente una plataforma a fin que las organizaciones y firmas adapten sus proyectos y visiones a través de diferentes oportunidades de patrocinio. Para mayor información, contactar a info@wcoa2014rome.com o Dimarco@wcoa2014rome.com.

Thank you for subscribing to the eNews from the International Public Sector Accounting Standards Board (IPSASB). This edition provides a summary of decisions made at the IPSASB’s meeting held March 11-14, 2013, in Abu Dhabi. Please go to the IPSASB Meeting Page for the meeting highlights and relevant agenda items.

1. Conceptual Framework  ED 4, Presentation in General Purpose Financial Reports
2. The Preface to the Conceptual Framework
3. Financial Statement Discussion and Analysis
4. Reporting on the Long-Term Sustainability of an Entity’s Finances
5. Public Sector Combinations
6. First-Time Adoption of Accrual Basis IPSASs
7. Next Meeting
8. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1.     Conceptual Framework ED 4, Presentation in General Purpose Financial Reports

The IPSASB approved the Conceptual Framework–Exposure Draft 4 (CF–ED4), Presentation in General Purpose Financial Reports, which describes presentation, display, and disclosure. It proposes an approach to presentation of decisions involving a two-level application of the concepts developed in chapters 1–4 of the Conceptual Framework.

In finalizing CF–ED4, the IPSASB confirmed:

• The description of key terminology, including presentation, display, and disclosure; and
• The decision-focused approach to presentation, involving decisions on information selection, location, and organization.

The IPSASB also confirmed application of both the qualitative characteristics and constraints on information included in general purpose financial reports (GPFRs) when making presentation decisions. The IPSASB also confirmed its decision not to include specific presentation objectives, relying on the direct application of the objectives of financial reporting identified in chapter 2 of the Framework.

The ED will have a four-month exposure period. The ED and the At-a-Glance document, which provides a summary of the ED, will be published shortly.

2.     The Preface to the Conceptual Framework

The IPSASB also discussed the approach to incorporation of the Preface into the Conceptual Framework. While it confirmed that the Preface should be included in the Framework, it decided to defer approval and publication until the Framework is being finalized. This will allow the linkages between the characteristics identified in the Preface and the concepts in the Framework chapters to be made more explicit.

The IPSASB reviewed the draft Preface presented by staff and gave directions for amendments to some of the sections, particularly those dealing with involuntary transfers and non-exchange transactions, and the longevity of the public sector.

3.     Financial Statement Discussion and Analysis

Consistent with a decision earlier in the meeting to issue non-authoritative guidance for pronouncements relating to general purpose financial reports (GPFRs), the IPSASB confirmed that the draft International Public Sector Accounting Standard (IPSAS), Financial Statement Discussion and Analysis, which has been developed from Exposure Draft 47, should be revised to become a Recommended Practice Guideline (RPG).

The IPSASB reviewed the current draft, acknowledging that specific wording may change due to the decision to change its status, and gave directions for amendments. A draft RPG with a Basis for Conclusions will be considered for approval at the June 2013 meeting.

4.     Reporting on the Long-Term Sustainability of an Entity’s Finances

The IPSASB reviewed a draft Recommended Practice Guideline (RPG) 1, Reporting on the Long-Term Sustainability of an Entity’s Finances, which has been developed from Exposure Draft 46 and provided directions for amendments. In particular, it directed staff to revise the section relating to the dimensions of long-term fiscal sustainability to directly refer to the dimensions of service, revenue, and debt and to explain that there are two aspects to each dimension: capacity and vulnerability. Capacity is the ability of the entity to influence or change the service, revenue, or debt dimensions, and vulnerability is the extent of the entity’s dependence on factors outside its control or influence. The draft RPG will be revised and presented at the June 2013 meeting with a view to approval.

5.     Public Sector Combinations

The IPSASB considered the responses received to Consultation Paper (CP), Public Sector Combinations. The CP was issued in June 2012 and received 26 responses.

The IPSASB agreed that the project should continue with the scope proposed in the CP, which includes guidance on (a) the de-recognition and recognition of assets for the transferor, (b) the definition of an operation, (c) disclosure requirements for combining entities relating to the going concern basis, (d) subsequent measurement requirements similar to that included in International Financial Reporting Standard (IFRS) 3, Business Combinations, and (e) distinguishing between asset acquisitions, entity and operation acquisitions, and amalgamations using relevant text from IFRS 3.

The IPSASB had an initial discussion about whether the approach used in the CP of distinguishing acquisitions and amalgamations, with a further distinction for public sector combinations not under common control and under common control, is appropriate. Staff was directed to outline the possible consequences of such distinctions for review at its June 2013 meeting. The IPSASB will also conduct a detailed analysis of the responses to the CP and preliminary views during that meeting.

6.     First-Time Adoption of Accrual Basis IPSASs

The IPSASB discussed an analysis of the transitional provisions related to IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), IPSAS 25, Employee Benefits, and IPSAS 32, Service Concession Arrangements: Grantor, and provided directions to staff on various aspects including categorization. The IPSASB agreed to adopt a transition period of three years as a general guideline, acknowledging that this could be changed at the standards level if determined appropriate.

At the June 2013 meeting, an analysis of the transitional provisions for the financial instruments standards will be considered. The IPSASB thanks Ernst & Young for providing staff support up to this point in the project. The South African Accounting Standards Board is now providing staff resources for the project and will be developing an exposure draft for review, with a view to approval in September 2013.

7.     Next Meeting

The next IPSASB meeting will be held in Toronto, Canada, on June 17–20, 2013. Members of the public may register to observe the meetings. Registration will close one week before the first day of the meeting.

8.  World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this can’t-miss IFAC event, held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will set the tone for the future.

The WCOA also affords an unparalleled opportunity for organizations and firms to share their projects and visions with the world by taking advantage of one of our carefully crafted sponsorship packages. There are numerous options so you’ll be able to select the one that best suits your organization’s unique strategy and goals. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com. 

Welcome to IFAC's Small and Medium Practices (SMP) Committee eNews.

In This Issue:

SUSTAINABILITY 

1. Sustainability: Challenges and Opportunities for SMPs and SMEs
2. Updated Good Practice Checklist Features Environmental Management

STANDARDS AND REGULATION

3. Closing Soon: IAASB Consults on Audit Quality Framework
4. SMP Committee Contributes to Standard Setters’ Key Projects and Strategic Planning
5. IFRS for SMEs Update

RESOURCES AND EVENTS

6. Registration Closing Soon: 2013 IFAC SMP Forum
7. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

SUSTAINABILITY

1. Sustainability: Challenges and Opportunities for SMPs and SMEs

Small- and medium-sized entities (SMEs) might think that sustainability is only relevant to large companies. Maybe they think they cannot afford to be sustainable, that measuring and managing environmental performance amounts to a costly and unnecessary burden. Moreover their accountants, both those employed by the business (accountants in business) and those providing services to the business (accountants in practice), will tell you it is a hard sell getting SMEs to embrace sustainability. However, SMEs that integrate sustainability into their core business strategy can benefit from lower costs, reduced risk, and new opportunities. And their accountants, typically operating in SMPs, can play a key role in their journey.

SMEs and the Benefits of Sustainability

SMEs are crucially important to the health and stability of the global economy: they account for over 95% of all businesses and for the majority of private sector gross domestic product (GDP), wealth and employment creation, and social and environmental impacts. Meanwhile, there is immense pressure on the natural environment and a recognition that finite resources are fast depleting. Today, SMEs are increasingly being faced with pressure to measure and manage their impact on the environment. They are an integral part of the supply chain where there is a growing demand for sustainability management both from customers and suppliers, especially for those SMEs seeking to secure contracts with governments or larger companies. SMEs also need to ensure they have access to the resources they need to be able to continue offer their products and services in the future.

That said, many SMEs may still feel they can delay addressing sustainability issues. Our global SMP poll indicates there are other more urgent issues preoccupying businesses, including economic concerns and keeping up with new standards, prompting sustainability to slide down their list of priorities. This may explain why few SMPs are presently offering sustainability services. But in the longer term, the sustainability issue is here to stay.

The good news is that there is growing evidence that sustainability initiatives, such as those to reduce an SME’s carbon footprint, can also help improve their bottom line.

2. Updated Good Practice Checklist Features Environmental Management

The second edition of the Good Practice Checklist for Small Business is now available. This multi-part checklist features a new standalone section on environmental management. Other sections cover financial and strategic management tasks and regulatory requirements, among others. The checklist is meant primarily for SMPs as a marketing or diagnostic tool to help them determine the advice a small business client may need, and also to help them in managing their own businesses. Six translations of the checklist have either been completed or are in progress.

STANDARDS AND REGULATION

3. Closing Soon: IAASB Audit Quality Framework Consultation

The comment period for the International Auditing and Assurance Standards Board (IAASB)’s Consultation Paper, A Framework for Audit Quality, will close on May 15, 2013. Through the proposed framework, the IAASB aims to raise awareness of the key elements of audit quality, encourage stakeholders to explore ways to improve audit quality, and facilitate greater dialogue on the topic. The SMP Committee plans to submit a comment letter and encourages individual SMPs to comment as well. 

4. SMP Committee Contributes to Standard Setters’ Key Projects and Strategic Planning

IAASB

The SMP Committee provided comments to the International Auditing and Assurance Standards Board (IAASB) on its auditor reporting project prior to their February meeting. See the IAASB February Meeting Page for the agenda papers, highlights, and podcast. In advance of the IAASB April Meeting, the committee will provide further comments on this project as well as the IAASB’s work addressing disclosures, International Standard on Auditing (ISA) implementation monitoring, and International Standard on Assurance Engagements (ISAE) 3000.

The IAASB is seeking comments, insights, and views from all stakeholders to help shape its future direction for 2015 and beyond via the Strategic Review Survey. Responses to the survey will inform the development of a formal Consultation Paper to be issued in late 3013. The SMP Committee plans to submit a response and encourages individual SMPs to comment as well.

IESBA

In early March, the committee responded to the International Ethics Standards Board for Accountants (IESBA)’s online survey, which was conducted as part of the IESBA’s strategic review to develop its strategy and work plan for the period 2014-2016. The survey has now closed and the IESBA will consider the survey responses in upcoming meetings.

5. IFRS for SMEs Update

In 2012, the International Accounting Standards Board (IASB) issued a Request for Information (RFI) to begin its comprehensive review of the International Financial Reporting Standard for Small- and Medium-Sized Entities (IFRS for SMEs). The objective of the RFI was to publicly consult on whether amendments are required to the standard. Last month, the IASB began to discuss issues relating to the scope of the standard, including whether or not the standard should be used by publicly accountable entities. See the IASB’s March Meeting Page to access the agenda papers and audio recording. See a summary of decisions in the March IASB Update.

EVENTS

6. Registration Closing Soon: 2013 IFAC SMP Forum

The 2013 IFAC SMP Forum will be held in Kampala, Uganda, on June 5, 2013, and jointly hosted with the Institute of Certified Public Accountants of Uganda (ICPAU) and the Pan African Federation of Accountants (PAFA). Each IFAC member organization may send up to ten delegates, who should be those responsible for SMP/small- and medium-sized entity (SME) affairs at their organization. Registration forms have been sent to IFAC member organizations. If you are an individual member of an IFAC member organization and wish to attend, please register your interest with your organization as soon as possible, as the deadline for registration is April 30, 2013. More information will be posted as it becomes available.

7. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this can’t-miss IFAC event, held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will set the tone for the future.

The WCOA also affords an unparalleled opportunity for organizations and firms to share their projects and visions with the world by taking advantage of one of our carefully crafted sponsorship packages. There are numerous options so you’ll be able to select the one that best suits your organization’s unique strategy and goals.