Global regulatory convergence is an essential element of the globalization of capital and debt markets, and is important in promoting the comparability of financial information, minimizing the effects of systemic economic risks, and helping to create a level playing field for international competition. For the accountancy profession, regulatory convergence includes the globally consistent adoption and implementation of high-quality internationally accepted financial reporting, auditing, assurance, and auditor independence standards.

A hallmark of the accountancy profession is its obligation to act in the public interest. But it is not always apparent what this means, and how accountants can determine whether they are meeting this expectation. IFAC, by developing this position paper, is seeking to advance its understanding of this important issue. The paper, which presents a practical definition of the public interest, was developed in the context of IFAC’s mission, to enable IFAC to assess the extent to which its actions and decisions are made in the public interest.

This paper discusses the public interest considerations relevant to the application of International Standards of Auditing (ISAs), set by the International Auditing and Assurance Standards Board (IAASB), for audits of small- and medium-sized entities (SMEs). It highlights how IFAC and the IAASB take into account the needs and views of SMEs and small- and medium-sized accountancy practices (SMPs), as well as describing initiatives undertaken so that ISAs can be used cost-effectively for the financial statement audits of entities of all sizes.

This paper outlines the rationale for the regulatory arrangements put in place for setting international standards for auditing and assurance, ethics, and accounting education; arrangements in which responsibility is shared between the public sector and the private sector. Current arrangements for international standard setting, which encompass a combination of public and private sector roles, provide a structure and process that operate and are seen to operate in the public interest, in a context in which there are needs for legitimacy, independence, transparency, performan

High-quality performance by professional accountants benefits the economy and society by contributing to the efficient allocation and management of resources in both the private and public sectors and to the operation of financial and capital markets, and through both of these to the production of goods and services.