The International Federation of Accountant (IFAC)’s Position Paper Position 2, A Single Set of Auditing Standards: Audits of Small- and Medium-Sized Entities (SMEs) reaffirms IFAC’s view that a single set of auditing standards that can be applied to all audits is in the public interest. IFAC considers that ISA™ are scalable and can be applied to SMEs, recognizing the standards must facilitate audits of small entities that are conducted in a manner appropriate to their size and characteristics. Nevertheless, keeping up with new regulations and standards has been consistently ranked as one of the top challenges facing small- and medium-sized accounting practices (SMPs). Standards should meet the test of being proportional in so far as they are capable of being cost effectively applied by SMPs. It is, therefore, important to ensure that any modifications to standards are monitored and input is provided from an SMP and SME perspective on a timely basis.
Furthermore, the results of IFAC’s Strategy Survey for 2016–2018 found that over 95% of IFAC’s members, firms, and other key stakeholders consider providing input to the independent standard-setting boards on behalf of both the SMP and professional accountant in business (PAIB) constituencies to be important or very important. As a result, this remains a focal area in the IFAC 2016-2018 Strategic Plan Charting the Future of the Global Profession.
Contributing to the development, and facilitating the adoption, of international standards has been a core element of the IFAC SMP Committee’s activities since its formation in 2005. The SMP Committee is dedicated to providing regular and timely input to the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) (the boards) in order to ensure the stability, relevance, and proportionality of standards to SMPs and SMEs. Input is provided at all key stages of the development process—from information gathering and project proposals, to consultation papers and exposure drafts, as well as post-exposure if it’s considered necessary.
Similarly, the IFAC PAIB Committee monitors the development of standards that impact the work of accountants working in business and the public sector. The PAIB constituency shares similar concerns as the SMP including that of standards overload and fragmentation, improving audit quality, access to relevant and affordable professional services, and guidance on ethical conduct. Recently, the PAIB Committee’s main focus has been on engaging and providing input to the IESBA and IAASB.
The input from the committees takes many different forms, and covers the major projects of both the IAASB and the IESBA, as outlined in their respective work plans: IAASB Work Plan for 2015-2016, and IESBA Strategy and Work Plan 2014-2018.
