The IPSASB approved Exposure Draft (ED) 64, Leases. ED 64 will be issued in January with a consultation period until June 30, 2018. ED 64 proposes a single right-of-use model for lease accounting specifically designed for public sector financial reporting. It also proposes requirements and guidance on concessionary leases for both lessors and lessees.

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The IPSASB agreed on outlines for the Public Sector Measurement Exposure Draft and Consultation Paper, which will address the measurement of assets and liabilities, including non-current assets held for sale and discontinued operations. The Board took a tentative view that fair value, as defined in IFRS 13, Fair Value Measurement, can be applied in the public sector where a non-entity specific exit value is appropriate.

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The IPSASB reviewed responses to its Consultation Paper, Financial Reporting for Heritage in the Public Sector. The main issues raised by constituents related to the measurement of heritage assets. The Task Force on Public Sector Measurement will next develop measurement principles. The Heritage Task Force will then consider application guidance for heritage measurement. 

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The Board received an update on the CAG’s discussion of the Infrastructure Assets project, which raised several new issues, including the accounting treatment of land under water (e.g., dams and reservoirs) and asset retirement obligations.
The IPSASB will next consider Infrastructure Assets at its December 2018 meeting. Staff will continue with research and will develop and issue a survey to gain constituent views on the main issues in accounting for infrastructure assets.

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The IPSASB approved a consultation document with its proposed Strategy and Work Plan 2019-2023. It will be published in January 2018, with a comment period until June 15, 2018. The consultation document proposes strategic priorities and additional projects for the period. The IPSASB will undertake a number of outreach activities to obtain input from constituents in the February-June 2018 period. Please watch for the publication and provide your feedback via comment letter.

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The IPSASB carried out an in-depth review of its current work plan and agreed on a revised plan that runs through 2021. The IPSASB will review the plan at each meeting and will carry out a more detailed review at its final meeting of the year. The IPSASB will also align this review in December 2018 with approval of the 2019-2023 Strategy and Work Plan.

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• The next meeting of the IPSASB will be in New York, March 6-9, 2018. For more information, or to register as an observer, visit the IPSASB website.

• December 31, 2017: Consultation period for ED 62, Financial Instruments, ends.
• January 15, 2018: Consultation period for Consultation Paper, Revenue and Non-Exchange Expenses, ends.
• January, 2018: Strategy and Work Plan 2019-2023 Consultation Paper and ED 64, Leases, to be issued.
• March 31, 2018: Consultation period for ED 63, Social Benefits, ends.

The IESBA further deliberated significant comments received on the Exposure Draft of Phase 2 of the project, Improving the Structure of the Code of Ethics for Professional Accountants—Phase 2 (Structure ED-2). As part of its deliberation, the IESBA considered a first draft of revisions to the proposed text included in Structure ED-2 and consistency refinements to the agreed-in-principle text of Phase 1. Topics discussed include: the usage of the terms “may” and “might” and their descriptions in the restructured Code; distinguishing between “firm” versus “network firm,” primarily in the International Independence Standards; and the proposed effective date. The IESBA broadly supported the direction of the Structure Task Force’s proposals. The IESBA asked that the Task Force continue to liaise with the Safeguards Task Force to undertake a consistency review of the proposed texts to be included in the restructured Code before the next meeting.

Next Steps: At the December 2017 meeting, the IESBA will consider the final drafts of the texts of Phases 1 and 2 of the restructured Code, with a view to approval.

The IESBA further deliberated significant comments received on the Exposure Draft of Phase 2 of the project, Proposed Revisions Pertaining to Safeguards in the Code—Phase 2 and Related Conforming Amendments (Safeguards ED-2), and related Task Force responses. The IESBA also was briefed on the outcome of the Task Force’s July 2017 teleconferences with regulatory stakeholders who responded to Safeguards ED-2, and the IFAC Small and Medium Practices Committee. As part of the discussion, the IESBA considered a first draft of revisions to proposed Section 600, Provision of Non-assurance Services to an Audit Client, as well both conforming and consistency changes to safeguards-related provisions in other sections of the proposed restructured Code.

Among other matters, the IESBA discussed the adequacy and appropriateness of the provisions for evaluating and addressing advocacy threats; and whether additional guidance is needed in the Code to explain two things:

(1)   The meaning of the term “appropriate professional” used in examples of actions that might be safeguards.

(2)   How professional accountants and firms should determine whether an action is effective in reducing a threat to an acceptable level, and therefore qualify as a safeguard.

Next Steps: At the December 2017 meeting, the IESBA will consider a final draft of the safeguards provisions and related conforming amendments, with a view to approving them for inclusion in the restructured Code.

Applicability

The IESBA further deliberated significant comments received on the Exposure Draft, Proposed Revisions to Clarify the Applicability of Provisions in Part C of the Extant Code to Professional Accountants in Public Practice (Applicability ED), and related Task Force responses.

The IESBA supported the Task Force’s proposed revisions, which incorporated the feedback received from IESBA members during its June 2017 meeting. Topics discussed include matters relating to the project scope and the nature of the illustrative examples of how the Applicability provisions in Part 2, Professional Accountants in Business, of the restructured Code would operate in the context of the work of professional accountants in public practice.

At the December 2017 meeting, the IESBA will consider a final draft of the applicability provisions, with a view to approving them for inclusion in the restructured Code.

Restructuring

The IESBA considered revisions to the proposed restructured text of the provisions in extant Part C, Professional Accountants in Business, included in the March 2016 close-off document, in reference to the comments received from respondents to Structure ED-2 and Safeguards ED-2. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

In light of the comments received from respondents on Structure ED-2, the IESBA considered revisions to the proposed restructured text relating to its NOCLAR pronouncement. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

In light of the comments received from respondents on Structure ED-2 and Safeguards ED-2, the IESBA considered revisions to the proposed restructured text relating to its Long Association close-off document. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

Next Steps: At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

The IESBA considered significant comments raised by respondents on the May 2017 Exposure Draft (ED), Proposed Application Material Relating to Professional Skepticism and Professional Judgment, and related Task Force responses. The IESBA broadly supported the direction of the changes to the proposed application material in response to the feedback from respondents, subject to refinements and consideration of whether the description of the term “professional judgment” has been fully aligned with that in the International Auditing and Assurance Standards Board (IAASB)’s standards.

The IESBA also was briefed on comments made during the September 2017 IESBA Consultative Advisory Group (CAG) meeting, and by some respondents to the ED regarding the IESBA’s longer term professional skepticism initiative. The longer term initiative will explore, among other matters, whether aspects of the concept of professional skepticism apply to all professional accountants, including those who are not auditors or assurance practitioners.

At the December 2017 meeting, the IESBA will consider a revised draft of the proposed application material relating to professional skepticism and professional judgment, with a view to approval for inclusion in the restructured Code. The IESBA will also receive an update on the longer term professional skepticism initiative.

The IESBA considered the results from the April 2017 Strategy and Work Plan survey and the IESBA Planning Committee’s initial analysis and preliminary considerations relating to the survey responses. The IESBA also considered the input received from the CAG regarding priority topics to address in the next strategy period. The IESBA broadly supported the Committee’s initial analysis, and provided feedback on potential topics for prioritization and related considerations in developing the draft strategy consultation paper.

Next Steps: At the December 2017 meeting, the IESBA will consider a first draft of the consultation paper.

Recognizing the increasing need for coordination between the IAASB and IESBA, the two boards held a joint sessions for the first time. Among other matters, the two boards were briefed on areas requiring or potentially requiring coordination, and a proposed approach to coordination, which they broadly supported subject to refinements. The boards agreed to form a joint working group to address the objectivity of engagement quality control reviewer. They also discussed how best to achieve alignment of their future strategies and work plans while respecting their independence, including how to align their strategy periods.

The boards agreed to meet again in joint session in the second half of 2018.

The next physical meeting of the IESBA will be held in Livingston, Zambia, December 4-8, 2017.

The IPSASB approved Exposure Draft (ED) 63, Social Benefits, which will be issued at the end of October with the consultation period running until March 31, 2018. ED 63 proposes the obligating event approach, in which liabilities are recognized when the eligibility criteria for the next benefit (including being alive) is satisfied. The ED also includes an optional insurance approach and stipulates that entities are required to disclose projected cash flows for schemes for the next five years.

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The IPSASB approved a revised standard, Financial Reporting under the Cash Basis of Accounting (the Cash Basis IPSAS). The revisions, which are intended to make implementation of the Cash Basis IPSAS easier, recast as encouragements rather than requirements: the preparation of consolidated financial statements, disclosure of information about external assistance, and payments made by third parties. The revised Cash Basis IPSAS will be applicable from January 1, 2019 with early adoption encouraged.

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The IPSASB discussed a firstdraft of its consultation document forthe Strategy and Work Plan 2019–2023, which it expects to issue in January 2018. The consultation document was informed by outreach and engagement with constituents, the IPSASB’s oversight body the Public Interest Committee, and the IPSASB Consultative Advisory Group. The IPSASB plans to hold regional roundtables in the first half of 2018 to ensure broad engagement with constituents on the consultation document.

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For measurement of concessionary leases, the IPSASB decided that the lessor’s underlying asset should be measured in accordance with the relevant IPSAS. The IPSASB directed staff to further analyze three options of accounting for the subsidized component of concessionary leases by lessors. The three options are to recognize the subsidized component of a concessionary lease (i) as a liability (unearned revenue), (ii) directly in net assets/equity, or (iii) not to recognize the subsidized component. Under options (i) and (ii), an expense for the subsidized component would also be recognized by a lessor, while an expense for the subsidized component would not be recognized under option (iii).

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The IPSASB decided that measurement of heritage and infrastructure assets should be addressed in the Public Sector Measurement project and has directed the Task Force and staff to develop a consultation paper that includes a preliminary exposure draft. This exposure draft will propose an approach to measurement and will include advice on addressing public sector-specific needs, as well as the extent to which IFRS 13, Fair Value Measurement, should be drawn upon.

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The IPSASB agreed upon an approach for the Infrastructure Assets project, which involves further research to determine the difficulties preparers encounter when applying IPSAS 17, Property, Plant and Equipment. After this research phase, a final project proposal will be presented with envisaged outputs. Staff will update the CAG and IPSASB on the progress of the research at the December 2017 meeting.

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The 2017 Handbook of International Public Sector Accounting Pronouncements is now available for electronic download on the IPSASB website. The 2017 Handbook includes the new standards IPSAS 39, Employee Benefits and IPSAS 40, Public Sector Combinations. Hard copy editions will be available for purchase in November.

A podcast highlighting key points of the September 2017 meeting is now available.

The next meeting of the IPSASB will be in Toronto from December 5-8. The Consultative Advisory Group will hold its second meeting of the year in Toronto on December 4. For more information, or to register to attend a meeting as an observer, visit the IPSASB and CAG websites.

• December 31, 2017: Consultation period for ED 62, Financial Instruments, ends
• January 15, 2018: Consultation period for Consultation Paper, Revenue and Non-Exchange Expenses, ends

A report by IFAC and the International Organisation for Economic Co-operation and Development (OECD) explores accounting and budgeting practices at the national government level in OECD countries. It concludes that nearly three-quarters of OECD countries have adopted accrual accounting for their year-end financial reports and more than a quarter now prepare their annual budgets on an accrual basis.

While there is low direct adoption by national governments of international accounting standards, such as the International Public Sector Accounting Standards (IPSAS) or International Financial Reporting Standards (IFRS), many standard setters use IPSAS or IFRS as primary or explicit references for developing their national standards.

For years, Caribbean countries have been motivated to incorporate international accounting standards into their national regulations. Accrual Accounting Practices and Reform Expectations in the Caribbean, a survey organized by the Institute of Chartered Accountants of the Caribbean (ICAC), IFAC and the World Bank, charts the state of the region’s public financial management (PFM) reforms. It facilitates a better understanding of reform designs, implementation challenges, and associated benefits.

After reported reforms are implemented, the regional balance will move toward accrual-based accuonting with nine of the surveyed countries expected to implement IPSAS and another six to use N-IPSAS.

Commissioned by IFAC and the World Bank, Professor Emeritus Alain Burlaud examines the status of public sector financial reporting in 18 Francophone African countries, highlighting the urgent need to improve public financial reporting quality and increase the number of professional accountants in the region.

June 6-9 – Mexico City, Mexico
IFAC actively supported the 10^th Regional CReCER Conference on Accounting and Accountability for Regional Economic Growth: Fostering Trust for Regional Economic Growth. The conference reflected the need for trust in both government and the private sector to help manage public resources more effectively.

November 21-22 – Buenos Aires, Argentina
As part of Open Government Week, this meeting will bring over 2,000 representatives from governments and civil society, digital innovators, journalists, and researchers to further the open government agenda in the face of current global challenges. IFAC will present its new International Public Sector Financial Accountability Index to stimulate PFM reform and will engage with regional representatives to further update the Index with information from their respective countries.

Developed in partnership with members of the Global Initiative of Fiscal Transparency (GIFT) Network, including IFAC, the OECD’s Budget Transparency Toolkit offers a gateway to global budget and fiscal transparency institutions. It also highlights official instruments, standards, and guidance materials and demonstrates how these tools can be applied across various areas of the budgeting cycle.
Read more from OECD Deputy Head Ronnie Downes.

As part of its Better Government Series, the Institute of Chartered Accountants in England and Wales (ICAEW) recently issued a practical "how-to" guide which sets out six practical building blocks to improve the quality of public financial reporting and public financial management.

CIPFA has developed this interactive portal to support a diverse range of information and tools dedicated to the shared aim of strengthening PFM worldwide.

In a very timely piece, the Association of International Certified Professional Accountants (AICPA) outlines the role of management accountants in establishing best practices for combatting fraud and corruption in their organization.

Comprehensive profiles of IFAC member organizations and the jurisdictions in which they operate are available on the IFAC website. These in-depth profiles support transparency; adoption and implementation of international standards; and the public interest by demonstrating international standards’ widespread use and the profession’s efforts to encourage adoption, advance implementation, and support the businesses, governments, and communities in their nations.

For more information on the new webpages and how to locate and use the information, take a look at our previous eNews issue, which served as a mini-primer on the new content. Please email any feedback or questions to compliance@ifac.org.

What We’ve Learned

To celebrate hitting our 100^th profile mark, we’ve collated high-level trends and learning—gleaned from reading the published profiles.

• Partnerships and collaboration are key.
  Professional accountancy organizations (PAOs) in Albania, Bahamas, Bangladesh, Egypt, Liberia, Montenegro, Jordan, Serbia, and South Africa, among others, are partnering with global, regional, and local organizations to advance the implementation of international standards and best practices.

• There is a continued focus on ensuring high-quality audits.
  Consultations on audit regulation and auditing standard translations are underway in Belgium, Botswana, Hong Kong, Pakistan, Slovenia, and Uzbekistan.

• High quality preparation of financial statements has not been overlooked.
  Egypt, Finland, Iraq, Pakistan, and South Africa have implemented IFRS certification courses, issued guidance, and/or established partnerships with stakeholders to support proper implementation.

• Essential, foundational components of the accountancy profession are being strengthened.
  Albania, Armenia, Barbados, Burkina Faso, Kenya, Mauritius, Namibia, Peru, Poland, Portugal, Russia, South Africa, and United Kingdom are advancing initiatives related to education, ethics, and investigation and discipline mechanisms.

• Dedicated promotion of IPSAS continues.
  Recognizing the role PAOs play in the public sector, PAOs in Bangladesh, Benin, Lesotho, Papa New Guinea, and Serbia are actively promoting the adoption and implementation of IPSAS through discussions with government officials and training their members.

• PAOs are successfully advocating on behalf of the profession and their members.
  The successful passage of new national accountancy laws in the Bahamas and the Cayman Islands, and OHADA regional requirements, were largely due to PAOs’ advocacy efforts.

We recommend reviewing the profiles for your jurisdiction, member organization, and other countries to more fully understand the accountancy profession in your nation and other areas.

The Mauritius Institute of Professional Accountants, Ordem dos Contabilistas Certificados, and the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina became IFAC members in November 2016 after previously being associates. We look forward to our continued collaboration to strengthen the accountancy profession worldwide.

• Peru
  In October 2016, the Junta de Decanos de Colegios de Contadores Públicos del Perú met with Peruvian universities authorities and reached three important agreements that will contribute to International Education Standards adoption.

• Laos & Singapore
  In October 2016, the Institute of Singapore Chartered Accountants and the Lao Chamber of Professional Accountants and Auditors signed a Memorandum of Understanding to further develop the accountancy profession in Laos. Read more>>

• Brazil
  The Instituto dos Auditores Independentes do Brasil (Institute of Independent Auditors of Brazil, or IBRACON) and the Conselho Federal de Contabilidade (Federal Accounting Board, or CFC) are working to adopt the International Ethics Standards Board for Accountants’ new standard on responding to non-compliance with laws and regulations (NOCLAR) one step at a time. Read how>>

• Lesotho
  The Lesotho Institute of Accountants has launched the Lesotho Professional Accountancy Programme, the country’s first locally-developed accounting qualification, designed to strengthen professionalization in the private and public sectors. Learn more>>

• Realizing the Power of PAOs: Professional Qualification and Accountancy Education Workshop
  In conjunction with the 4th African Congress of Accountants in Kampala, Uganda, IFAC and the Pan African Federation of Accountants held an interactive workshop on the approaches PAOs use in educating and qualifying professional accountants. Representatives from PAOs in more than 25 countries participated in the workshop. Highlights will be posted on the IFAC website soon.

• Jordan SMO Workshop
  In cooperation with the Jordanian Association of Certified Public Accountants and the World Bank Group’s Global Governance Practice, IFAC organized an SMO workshop in Sweimeh, Jordan in January 2017 focused on regional issues impacting the profession. Key takeaways >>

• Inter-American Association Workshop
  To promote quality assurance systems implementation and prepare reviewers in the Latin America region, IFAC staff participated in a session of the Inter-American Association’s Train the Trainers workshop in October 2016. The workshop was a follow-up to the IFAC workshop in Costa Rica in early 2016, which uncovered some of the regional challenges for quality assurance systems. Read more in Spanish>>

• ASEAN Council
  The 122^nd ASEAN Federation of Accountants Council meeting in Singapore included presentations from IFAC staff on the compliance program’s work plan, the published member and country profiles, and the new, enhanced CARE framework. Read more >>

• Costa Rica SMO Workshop
  More than 30 representatives from 17 Central and South American and Caribbean PAOs discussed regional issues affecting the profession during a workshop focused on IFAC’s Statement of Membership Obligations, held in cooperation with the Colegio de Contadores Públicos de Costa Rica in February 2016. Read more>>

• IFAC Capacity Building Program
  Projects under the IFAC Capacity Building Program, with funding from the UK Department for International Development, are currently underway in Ghana, Kyrgyzstan, Nigeria, Rwanda, Uganda, Zimbabwe, and regionally in Africa. Each project targets a specific development area based on the needs of the national PAO(s), such as accountancy education or public sector accountancy capacity.

• MOSAIC Steering Committee Webinar
  The MOSAIC Steering Committee met in April 2017 to advance the Foundations Project—an initiative of the IFAC Capacity Building Program with funding from the UK Department for International Development to build foundational accountancy skills in the public and private sectors in emerging economies. A competency framework was developed under the project, which will be field tested through an upcoming project in Rwanda; development of additional support tools is planned for the future. The Steering Committee also considered a potential initiative to build accountancy capacity in fragile states.

June 2017: ICAC Conference, Guyana

July 2017: SMO Workshop, Vietnam

July 2017: Compliance Advisory Panel Meeting, Vietnam

October 2017: MOSIAC, Compliance Advisory Panel, and PAO Development Committee Meetings, New York

October 2017: AIC Conference, Peru

November 2017: IFAC Council, Belgium

IFAC Statements of Membership Obligations

The IFAC Quality & Development Team supports IFAC member organizations’ efforts to adopt and implement international standards (thus improving SMO fulfillment) and build the capacity of the global accountancy profession.

The team manages the Member Compliance Program and the membership admission process, PAO Capacity Building Program, including the PAO Development Committee, Accountability. Now. and sustainable accountancy development efforts. The Member Compliance Program is overseen by the Compliance Advisory Panel and the Public Interest Oversight Board as one of IFAC’s public interest activities.

Questions: compliance@ifac.org.

The March IESBA meeting considered a project proposal to develop application material in the Code to:

• explain how compliance with the fundamental principles supports the exercise of professional skepticism for audit, review, and other assurance engagements;
• emphasize the importance of professional accountants obtaining an understanding of the facts and circumstances known to them when exercising professional judgment, in the context of applying the conceptual framework.

The IESBA approved the project and broadly supported the direction of the proposed application material. The IESBA directed its Task Force to present a revised draft of the proposals for further consideration and approval for exposure at a teleconference scheduled in April.

The IESBA considered a revised draft of proposed Section 250, Gifts, Hospitality and Other Inducements, and discussed, among other matters, the conceptual structure of the section and inducements involving immediate and close family members. Since the meeting, the IESBA held a teleconference in May to further consider refinements to the proposals. The IESBA will consider the draft Exposure Draft, including consequential and conforming amendments to related sections of the Code, for approval at its June 19-21 meeting.

The IESBA further discussed the approach to, and content of, a draft stakeholder survey as a first step in developing its future strategy beyond 2018. The survey was released in April and will inform the IESBA as it develops its proposed new Strategy and Work Plan, which is expected to be issued for public consultation in 2018. The survey will remain open until July 18.

Take the survey now »

The IESBA’s Fees Working Group is working to identify whether there is a relationship between fees charged by audit firms and threats to compliance with the fundamental principles or to independence.  The Working Group’s fact finding is looking at four areas: audit fee levels for individual audit engagements; relative fee size and dependence on particular clients; the ratio of non-audit to audit fees; and audit services provided by firms that have significant non-audit service businesses.

As part of this initiative, the IESBA considered a high level review of the final report from Prof. David Hay, the academic commissioned to undertake a review of academic and other literature. The IESBA also considered an overview of regulatory provisions regarding fees in G-20 jurisdictions. 

As part of the fact finding work, the IESBA also considered a proposed stakeholder survey being developed by its Working Group that will focus on the four identified areas.

The IESBA heard a presentation from IFAC about its study, The Accountancy Profession: Playing a Positive Role in Tackling Corruption. This study is the first to demonstrate how professional accountants are a part of governance architectures that tackle corruption. The link between the prevalence of professional accountants in the workforce, and more favorable scores on the main global measures of corruption, is stronger in G20 countries, and member nations of the Financial Action Task Force, which have adopted anti-money laundering laws.

Read the report »

During the first quarter, IESBA representatives met with the Standards Coordination Working Group of the International Forum of Independent Audit Regulators (IFIAR). The IESBA Chairman also gave a presentation titled “Enhancing Auditors’ Ethical Behavior” at an IFIAR Inspection Workshop.

During the quarter, IESBA representatives also met with representatives of the profession, including the Canadian profession’s Public Trust Committee and the IFAC Small and Medium Practices Committee.

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The most recent IESBA Consultative Advisory Group (CAG) meeting was held March 6 in New York, US. Meeting highlights include discussion on professional skepticism, inducements, the IESBA’s strategy survey, and fee-related matters. In the context of the strategy discussion, the CAG also received a presentation from Jeanne Boillet, EY Global Assurance Innovation Leader, on the transformative effects of trends and developments in technology and innovation on the accounting and finance functions.

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In March, the Public Interest Oversight Board (PIOB) released its Feedback Statement and PIOB Strategy 2017-2019. The feedback statement summarizes the responses the PIOB received on its strategy consultation and the way in which it has taken these responses into account in finalizing its strategy for 2017–2019.

Register or log in for access to current Handbook of the Code of Ethics for Professional Accountants for personal use or to purchase print copies.

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• June 19-21, 2017: IESBA meeting, New York, USA
• September 13, 2017: IESBA CAG meeting, Madrid, Spain

For more info, or to register to attend a meeting as an observer, visit Ethics Board Meetings and Ethics Board CAG Meetings.

Public Interest Committee (PIC) member Jón Blöndal provided an update of the PIC meeting on March 1, 2017. Mr. Blöndal summarized the discussion, which included the IPSASB’s current work program, the member nominations process, the Consultative Advisory Group, and the IPSASB’s due process and working procedures.

The IPSASB Chair noted that the PIC meeting had been constructive and provided a number of points for consideration by the IPSASB, particularly for the development of the future Strategy and Work Plan.

The IPSASB held an initial discussion on the process to develop its next Strategy and Work Plan. The IPSASB agreed the timeline for the process, with a Consultation Paper (CP) to be published in the first quarter of 2018. The IPSASB also confirmed that the IPSASB’s standard-setting activities are located in the broader public sector financial management landscape and that inputs to the development of the Strategy and Work Plan will be sought from a number of partners.

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The IPSASB considered issues related to accounting for revenue, including the feasibility of additional guidance to distinguish exchange and non-exchange transactions, options to address transfers with time requirements and modifications to the performance obligation approach drawn from International Financial Reporting Standard (IFRS) 15, Revenue from Contracts with Customers. The IPSASB also considered the applicability of the obligating event and performance obligation approaches (drawn from the Social Benefits and Revenue projects, respectively) to non-exchange expense transactions. The IPSASB aims to approve a CP at the June 2017 meeting.

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The IPSASB discussed scope, key definitions, and the obligating events to be included in the future Exposure Draft (ED). The IPSASB decided not to include the “key participatory events” and “accumulating liabilities” options and to refine the options related to fulfillment of eligibility criteria. Following an education session on the forthcoming International Accounting Standards Board insurance standard, the IPSASB agreed that the insurance accounting approach should be optional for programs with some of the characteristics of insurance contracts that are intended to be fully funded.

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The IPSASB discussed amendments to other IPSASs arising from the update of IPSAS 28-30, Financial Instruments: Presentation; Recognition and Measurement; and Disclosure, and tentatively approved the authoritative material in the ED. The internal Task Based Group will review the non-authoritative material at an in-person meeting in April 2017. The IPSASB aims to approve the ED at the June 2017 meeting.

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The IPSASB decided to adopt a control-based approach to lessor accounting for the underlying asset in a lease. The IPSASB agreed that leases provided at zero or nominal consideration should be within the scope of the project.

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The IPSASB reviewed a draft CP, Financial Reporting for Heritage in the Public Sector. The IPSASB agreed to discuss the use of a “one currency unit” approach for initial recognition of heritage assets in the context of historical cost measurement.

The IPSASB approved the CP, which will be published in April. The deadline for comments will be September 30, 2017.

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The Chair of the Public Sector Measurement project’s Task Force, provided an overview of the project’s background and scope. The Task Force Chair described the rationale for the project from a public interest perspective, developments since the project’s approval in June 2015 and some high-level observations on issues. The Task Force and staff will identify project work streams and develop an issues paper for the June 2017 meeting.

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The IPSASB considered a high level summary of the responses to ED 61, Amendments to Financial Reporting under the Cash Basis of Accounting (the Cash Basis IPSAS™), and had an initial discussion of some of the issues identified by respondents. The IPSASB will consider a more detailed analysis of responses at the June 2017 meeting.

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On March 6, delegates from the World Bank, International Monetary Fund (IMF), IPSASB, and IFAC participated in an international seminar, Transparency and Beyond: Harnessing the Power of Accrual in Managing Public Finances. The seminar considered the broad public financial management (PFM) landscape and how economists, statisticians and policy makers can co-operate to best use the powerful information provided by accrual-based IPSAS financial reports.

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An audio podcast highlighting key points of the March 2017 meeting is now available.

Listen now »

The next meeting of the IPSASB will be in Luxembourg from June 27-30, 2017.

At the Accountability. Now. Nigeria conference—held by the Institute of Chartered Accountants of Nigeria last October—former IFAC President Olivia Kirtley delivered the keynote speech on good governance and accountability in the public sector. Given the large sums that flow through governments, she noted the urgency of public financial management (PFM) reform, and commended the Nigerian Ministry of Finance decision to adopt accrual-based International Public Sector Accounting Standards—or IPSAS—as the government’s reporting framework.

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Public Financial Management, Strengthening Institutions and Accountability—a conference held in Madagascar last October—saw accountancy leaders discuss how PFM reform in Francophone Africa could be expedited. Delegates underscored the public sector capacity challenge, and recognized many more accounting professionals are required to achieve the desired reform outcomes. The event was hosted by IFAC, the Pan African Federation of Accountants (PAFA), Fédération Internationale des Experts Comptables et Commissaires aux Comptes Francophones (FIDEF), World Bank, and African Development Bank.

See press release»

The XXII International Congress of the International Organization of Supreme Audit Institutions (INCOSAI) was held last December in Abu Dhabi, UAE, and attracted participants from 192 countries and 15 international and professional organizations. IFAC’s presentation highlighted key areas in which it and INTOSAI are natural partners: public sector governance, accounting, auditing, sustainable development goals, and the Accountability. Now. initiative.

Experts tell IFAC’s GatewayTV why high-quality public financial accounting matters:

• Chair, CIPFA International Ian Ball. 
• Former UK Shadow Chancellor of the Exchequer & Senior Fellow, Harvard Kennedy School Ed Balls.
• Dean, Leventhal School of Accounting; Alan Casden Dean's Chair; and Professor of Accounting, USC William Holder.
• Global Public Sector Accounting and Auditing Leader, Deloitte Frans van Schaik.
• Director General, Budget and Public Finance, Austria Gerhard Steger.
• Economist and Senior Fellow, Bruegel Nicolas Véron.
• Former US Comptroller General, Senior Strategic Advisor, PwC David Walker.

See also the Accountability. Now. video on why every citizen should care about government spending.

This global conference explored:

key drivers for change in the public sector;

skills required by professional public sector accountants and organizations to continue to add value; and

common IPSAS implementation issues, and practical solutions.

Launched at the event, 50 Drivers of Change in the Public Sector explores how change will impact the public sector in the coming 5 years.

The 17th Annual Meeting of Organisation for Economic Co-operation and Development (OECD) Senior Financial Management Officials is dedicated to accrual developments in individual countries, and will provide an opportunity for delegates to exchange information about their countries’ reforms.

This invitation-only event, jointly organized by the IPSASB, World Bank, and International Monetary Fund, will discuss the current state of accrual practices in the public sector, how it supports strong PFM and increased transparency, and what needs to be done to achieve successful reforms. 

This Latin America and Caribbean flagship learning initiative supports regional economic growth and development. This year’s event will include a session on improving financial reporting and accountability frameworks in the public and private sectors. Part of the event is open to the public and can be attended by interested institutions and individuals for a registration fee. Website, including registration information, coming soon. Learn more. 

• The International Framework: Good Governance in the Public Sector, issued by IFAC and the Chartered Institute of Public Finance and Accountancy in 2014 offers practical assistance to enhance decision making and accountability.
• Getting to the Heart of Decision Making—Whitehall’s Financial Management Reform, issued by the Institute for Government and Chartered Institute of Management Accountants in December 2016, examines the UK Government’s Financial Management Reform program and why the UK changes have been imposed.
• The Future of EU Public Sector Accounting in a Global Context, an Institute of Chartered Accountants in England and Wales Discussion Paper, encourages broad consensus across public and private sector stakeholders to achieve public sector accounting reform across Europe. Responses in any form from interested stakeholders are encouraged by March 31, 2017.
• Guide on Principles and Mechanisms on Public Participation in Fiscal Policy, issued by Accountability. Now. partner Global Initiative for Fiscal Transparency (GIFT), provides guidance on how to integrate public participation into fiscal policy and how to capture the associated benefits.
• In this interview, Jamaica’s Auditor General and IFAC Board member Pamela Monroe Ellis talks about the fight against corruption in government.
• “IPSAS enable governments to account for material liabilities such as debt, pensions, and service concessions,” argues Amon Dhliwayo in this South African Institute of Chartered Accountants (SAICA) article, “IPSAS Adoption in Africa.”

The December meeting highlights feature updates on the IESBA’s current projects and initiatives, including: Long Association, Structure of the Code of Ethics for Professional Accountants (the Code), Safeguards, Part C, Professional Skepticism, and the IESBA’s future strategy and work plan. The IESBA also received a final report on a review of academic research and other literature on the topic of fees, and provided input on proposed IESBA Staff Questions & Answers (Q&As) addressing responding to non-compliance with laws and regulations (NOCLAR) (see below).

The IESBA approved three Exposure Drafts, and agreed in principle the new structure and drafting conventions of the Code, the restructured text of Phase 1 of its Structure project, and the revised text of Phase 1 of its Safeguards project. The latter comprises revisions to the provisions in the extant Code relating to the conceptual framework (Section 120) and the application of the conceptual framework to professional accountants in public practice (Section 300). See Restructuring the Code for the status of all the component pieces of the Structure project, set for completion at the end of the year, along with numerous support materials including an Update from the board, Mapping Table, and Compilation of the Proposed Restructured Code.

Listen to December Highlights >> | Read December Meeting Summary >>

The Structure Phase 2 proposals restructure select sections of the Code, including recently finalized provisions addressing accountants’ response to NOCLAR, long association of firm personnel with an audit or assurance client, and ethical issues that professional accountants in business often face.

Comment by May 25 >>

The proposals address safeguards-related provisions in the Code’s independence sections pertaining to non-assurance services provided to audit and assurance clients. The document also explains the rationale for the revisions to the non-assurance services section of the extant Code; and the proposed conforming amendments arising from the Safeguards project as these relate to the text of Phase 1 of the Structure project.

Comment by April 25 >>

The proposals clarify the applicability of the requirements and application material in the Code’s extant Part C—Professional Accountants in Business—to professional accountants in public practice.

Comment by April 25 >>

The IESBA’s final pronouncement, Responding to Non-Compliance with Laws and Regulations, comes into effect July 15, 2017. To support implementation, IESBA staff have released two Q&A documents: one for professional accountants in practice; and one for professional accountants in business. For additional resources, see the IESBA NOCLAR page. The text of the NOCLAR pronouncement is being redrafted as part of the Structure project (See Structure Phase 2 above). The restructuring work is not intended to change the substance of the NOCLAR provisions. Additional implementation support resources will be made available on the IESBA NOCLAR page in due course.

Access Q&As >>

The IESBA considered a proposal for a short-term project and proposed enhancements to more strongly emphasize professional skepticism in the Code. The IESBA will consider a revised project plan and proposals at its March 2017 meeting. The IESBA also received an update on the recent activities of the tripartite Professional Skepticism Working Group (PSWG) comprising representatives of the International Auditing and Assurance Standards Board (IAASB), IESBA, and International Accounting Education Standards Board (IAESB).

See Agenda Papers >>

The IESBA began developing its next Strategy and Work Plan (SWP) with initial consideration of matters to include in a survey, to be issued as part of an extensive due process at the end of March, followed by a consultation paper by Q1 2018. As part of this process, the IESBA will hear a presentation at its next meeting about transformation of the accounting and finance functions, including disruptions from technological advances and innovation.

See Agenda Papers >>

The Consultative Advisory Group (CAG) met twice by phone: once in January to receive a report-back on the outcome of the IESBA’s deliberations regarding the Long Association project in the light of comments raised by the Public Interest Oversight Board (PIOB), and in December to consider a proposal for a short-term IESBA project to respond to stakeholder calls for greater emphasis on professional skepticism in the Code.

Access Jan 11 Meeting Papers >>

Access Dec 7 Meeting Papers >>

At its December 1-2, 2016, meeting, the Public Interest Oversight Board (PIOB) discussed the IESBA task force's response to the PIOB’s feedback on the Long Association project. In January 2017, the PIOB concluded that the Long Association close-off document was approved by the IESBA in accordance with due process and with proper regard for the public interest.

Access PIOB Update >>

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