Welcome to IFAC's Professional Accountants in Business Committee (PAIB) eNews.
In This Issue:
- Business Reporting Process Guidance Released by PAIB Committee
- Reminder: Comment Period Coming to a Close for Strategy and Work Plan
- PAIB Committee Submits Comment Letters on Relevant Issues, Publications
- ACCA Virtual Conference Includes IFAC Presentation on Sustainability and Accountancy
- PUMA Environmental P&L Methodology Receives Independent Approval
- COSO Seeking New Board Chair
- Recent News, Events, and Publications of Interest
1. Business Reporting Processes Guidance Released by PAIB Committee
Principles for Effective Business Reporting Processes, new International Good Practice Guidance (IGPG), has been released by the PAIB Committee. The guidance helps professional accountants in business work with their organizations to enhance business reporting processes, and discuss the key issues of developing effective processes. At the heart of the new guidance are 11 key principles for evaluating and improving business reporting processes, which are complemented by practical guidance outlining the critical arrangements that need to be in place for effective business reporting. The guidance can also be used to prepare for enhanced forms of business reporting, such as integrated reporting, and is designed for organizations of all sizes, structures, and sectors, as all organizations need to produce high-quality reports.
2. Reminder: Comment Period Coming to a Close for Strategy and Work Plan
The comment period for the proposed Professional Accountants in Business (PAIB) Strategy and Work Plan for 2013-2016 closes next week—January 31, 2013. The proposed plan outlines specific initiatives to improve recognition of the diverse roles professional accountants in business perform and how they need to be positioned to drive successful and sustainable organizations. As professional accountants in business make up more than half of all accountants in the world, they have the collective power to significantly influence their organizations in implementing effective governance and an ethical culture supported by integrated risk management and internal control, sustainable leadership, and effective reporting and performance management.
Additionally, the comment period for Project and Investment Appraisal for Sustainable Value Creation, proposed new International Good Practice Guidance, closes on February 28, 2013. The proposed IGPG will help the accountancy profession facilitate sustainable organizations, financial markets, and economies by taking into account economic, environmental, and social considerations for project appraisal and investment decisions.
3. PAIB Committee Submits Comment Letters on Relevant Issues, Publications
The PAIB Committee has submitted multiple comment letters recently on topics relating to the work and needs of professional accountants in business.
- Responding to a Suspected Illegal Act
The PAIB Committee submitted a comment letter to the International Ethics Standards Board for Accountants (IESBA)’s proposed changes to the Code of Ethics for Professional Accountants, Responding to a Suspected Illegal Act. In the letter, the PAIB Committee makes the case for the IESBA to clarify the need for the proposed revisions, modify the wording to change aspects of reporting an illegal act from a “requirement” to “apply or be able to explain,” allow for cultural or legal differences, and clarify that resignation over a suspected illegal act should be the last resort of a professional accountant, among other recommendations.
- COSO’s Internal Control over External Financial Reporting
In response to the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Internal Control over External Financial Reporting: Compendium of Approaches and Examples and Illustrative Tools for Assessing Effectiveness of a System of Internal Control, the PAIB Committee advocated for greater integration between internal control and risk management frameworks; revision of the internal control framework to embrace a wider perspective beyond applying internal control to reporting, operations, and compliance; and shortening the text of the framework.
- Invitation to Comment: Improving the Auditor’s Report
The PAIB Committee’s response to the International Auditing and Assurance Standards Board (IAASB)’s Invitation to Comment, Improving the Auditor’s Report, drew heavily from Integrating the Business Reporting Supply Chain, which recommended specific improvements to auditor communication. The committee’s response emphasized the primary need for high-quality business reporting from organizations.
4. ACCA Virtual Conference Includes IFAC Presentation on Sustainability and Accountancy
The Association of Chartered Certified Accountants (ACCA) recently invited IFAC's Head of Professional Accountants in Business, Stathis Gould, to address its Global Virtual Conference during the Business Models for a Green Economy session. Mr. Gould’s session, which drew more than 300 participants, touched on the overall global context for issues of sustainability, examples of models in use, and embedding sustainability into business practices. The presentation slides and audio file are available on the IFAC website.
5. PUMA Environmental P&L Methodology Receives Independent Approval
Footwear company PUMA recently received approval from independent experts gathered by its parent company, PPR, to review its approach to environmental profit and loss(P&L). In 2011, PUMA became the first major company to release an environmental P&L statement and put an economic value on greenhouse gas emissions and water consumption (see July 2011 PAIB Committee eNews for more information). The results of this independent methodology review found that PUMA’s approach “clearly applied credible valuation approaches.” For more information, see The Guardian Sustainability Blog.
6. COSO Seeking New Board Chair
COSO is seeking a new chair for a three-year term beginning June 1, 2013. The current chair, David Landsittel, is stepping down after serving for four years.
7. Recent News, Events, and Publications of Interest
- The World Bank has published a new report on climate change, Turning Down the Heat: Why a 4°C Warmer World Must Be Avoided. The report argues that the world could see significant, problematic changes, including extreme heat waves, declining food supplies, and rising sea levels, if greenhouse gas emissions aren’t lowered.
- The International Integrated Reporting Council (IIRC) has released its prototype of the International Integrated Reporting Framework to “demonstrate progress towards defining key concepts and principles that underpin [integrated reporting] and support organizations’ ability to produce an integrated report.” Additionally, the IIRC has released:
- Emerging Examples Database to demonstrate emerging best practices;
- Understanding Transformation: Building the Business Case for Integrated Reporting;
- Video interviews with Pilot Programme participants discussing their experiences and approaches; and
- The Pilot Programme 2012 Yearbook: Capturing the Experiences of Global Businesses and Investors.