The evolving environment in which the International Auditing and Assurance Standards Board (IAASB) operates demands a strategy that reflects, among others, changing technology; a dynamic small- and medium-sized entity landscape; and emerging reporting needs. This is global stakeholders’ opportunity to shape the board’s strategy by commenting on the proposed draft.

In the Proposed Strategy for 2020–2023 and Work Plan for 2020–2021, the IAASB puts forth a way forward that it believes meets stakeholders’ evolving needs, and is in the public interest. Enhancing our processes, including using technology and appropriate resourcing, are included in the strategy and are crucial to success. These enhancements will also maximize the impact of our activities, thereby enabling more timely responses to global trends and needs.

The Work Plan highlights the board’s commitment to completing significant projects currently underway, while balancing the needs of different stakeholders.

Feedback on this consultation and on the IAASB’s strategic direction is requested by June 4, 2019 from all interested stakeholders.

About the IAASB

The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org

The International Public Sector Accounting Standards Board (IPSASB) has released a new standard and an Exposure Draft on accounting for social benefits, and collective and individual services, respectively. Between them, International Public Sector Accounting Standard (IPSAS) 42, Social Benefits, and the related Exposure Draft (ED) 67, Collective and Individual Services and Emergency Relief (Amendments to IPSAS 19), address a wide range of significant government expenditures that directly impact the lives of citizens globally.

IPSAS 42 provides much-needed guidance on accounting for social benefits expenditure, which comprises about one fifth of GDP across OECD countries. It defines social benefits as cash transfers paid to specific individuals and/or households to mitigate the effect of social risk. Specific examples include state retirement benefits, disability benefits, income support and unemployment benefits. The new standard requires an entity to recognize an expense and a liability for the next social benefit payment.

“IPSAS 42 represents a big step forward for global financial reporting in the public sector and fills one of the major gaps in IPSASB’s suite of standards,” said IPSASB Chair Ian Carruthers. “Social benefits has been a challenging project because of the differing, strongly held views as to when a liability for social benefits arises. We are confident that the final standard will increase transparency and comparability in public sector financial reporting.”

In order to extend IPSASB’s guidance to public services as well as cash transfers, ED 67 proposes new requirements for accounting for collective services (such as defense at national-levels and street lighting at sub-national levels), individual services (such as healthcare and education) and emergency relief.

For collective and individual services, ED 67 proposes that an expense is recognized at the point of service delivery. ED 67 also proposes that an expense and liability is recognized for some emergency relief, but not where emergency relief is delivered as an ongoing activity of government.

“The distinction between social benefits and collective and individual services is important, but the accounting treatment of these transactions must be conceptually consistent,” said Mr. Carruthers. “Issuing ED 67 now, together with IPSAS 42, will allow our stakeholders to identify and account more consistently for the full range of social policy obligations of government.”

How to Comment
To access Exposure Draft 67 and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website at www.ipsasb.org. Comments on the Exposure Draft are requested by May 31, 2019. The IPSASB encourages IFAC member organizations and regional accountancy organizations to promote the availability of this Exposure Draft to their members and employees.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.

IPSAS 42, Social Benefits, provides guidance on accounting for social benefits expenditure. It defines social benefits as cash transfers paid to specific individuals and/or households to mitigate the effect of social risk. Specific examples include state retirement benefits, disability benefits, income support and unemployment benefits. The new standard requires an entity to recognize an expense and a liability for the next social benefit payment.

At a time when public sector spending, government accountability and financial sustainability are in the spotlight, ACCA (the Association of Chartered Certified Accountants) and IFAC (the International Federation of Accountants) are launching a global series that will identify, document and share success stories in public financial management.

Strong public financial management processes and systems are essential for effective and efficient delivery of public services, transparent public finances, and trust between government and citizens. ACCA and IFAC are keen to showcase how such strong systems make a difference when public sector spending is under intense scrutiny.

The series includes videos and written case studies, showcasing stories through their network of global experts. Public sector finance leaders from Tanzania, Australia and Canada have already shared their stories in videos which are available online: http://www.ifac.org/global-knowledge-gateway/business-reporting/discussion/showcasing-good-public-financial-management

Alex Metcalfe, head of public sector policy at ACCA said: ‘The aim of this research is to answer a number of fundamental questions about how public financial management is working now, and how it can operate in the future. We want to capture and share real stories of how public financial management improvements have made an immediate difference in the delivery of public services.’

Alta Prinsloo, IFAC Executive Director, added: ‘Strong public financial management impacts citizens and presents an opportunity for tangible change. Professional accountants have an essential role to play and we must leverage these case studies to continue making progress in the future.”

This research collaboration supports IFAC and ACCA’s work to build capacity in the public sector and to strengthen public financial management globally.

For media enquiries, contact:
Geena De Rose                                                       Helen Thompson
IFAC Communications                                              ACCA Head of Corp Comms
+1-212-286-9344                                                   M: +44 (0)7725 498 654
GeenaDeRose@ifac.org                                            Helen.Thompson@accaglobal.com
@IFAC                                                                     @ACCANews

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

The revised International Education Standard (IES) 7, Continuing Professional Development, clarifies the principles and requirements for how professional accountancy organizations measure, monitor, and enforce their continuing professional development systems. It makes it clear that all professional accountants must develop and maintain professional competence to perform their role.

The newly published sequel to the 2017 G20 public trust in tax report from ACCA (the Association of Chartered Certified Accountants), CA ANZ and IFAC (the International Federation of Accountants) reveals a high level of distrust among the public in politicians and non-government organisations (NGOs) when it comes to tax systems.

The new report also shows that public trust in professionals, such as accountants and lawyers, remains high by comparison.

When it comes to evaluating their tax systems, respondents across G20 nations are most concerned about transparency, complexity, inequality and corruption in tax systems.

Respondents’ concerns about inequality stem from the perception in English-speaking countries that high income earners and multinationals are treated better by tax systems than average or low income earners. Respondents in China, Indonesia and India had high levels of trust in tax authorities, politicians and accountants, reported efficient tax filing, and supported tax competition to attract multinational business.

G20 public trust in tax report is based on an online survey of more than 8,400 members of the general public across G20 countries and New Zealand, revealing that respondents have:

• a trust deficit amongst politicians and the media; 58 per cent of respondents expressed distrust or strong distrust in politicians, down nine per cent since 2017. Similarly, distrust in the media stands at 37 per cent down four per cent since the last survey;

• the highest level of trust in professional tax accountants at 55 per cent, down a marginal two percentage points compared to 2017, and professional tax lawyers at 50 per cent, up one per cent;

• consistent levels of mistrust year-on-year in non-government organisations at 37 per cent, an increase of two percent compared to 2017;

• divided views of trust in government tax authorities, with 37 per cent saying they trust or highly trust tax authorities and 34 per cent distrusting or highly distrusting them.

Commenting on the second year’s findings, Chas Roy-Chowdhury, global head of tax at ACCA says: ‘Once trust is lost, it’s hard to regain. Tax is a complex issue and one that touches all our lives - so that trust is important. What’s clear from this research is the need for all significant players – from politicians to tax experts - to work together to build and sustain the public’s trust in tax. And while the accountancy profession fares the best again in this year’s results, we cannot be complacent about these findings.’

Kevin Dancey, IFAC CEO adds: ‘Given that accountants adhere to a strong ethical code that supports their public interest obligations, it’s vital that we actually understand what the public thinks of tax systems and who they go to for trusted advice. This research gives everyone working in tax, including policy makers, politicians, media and accountants, a powerful insight in what the public really think. By understanding their views, professionals can better work to inspire confidence in the system as a whole.’

Michael Croker from CA ANZ concludes: ‘Our research shows that people say they broadly trust and want to hear more from experts and professionals, but scepticism in politicians and the media continues. If transparency is one of the pillars of an effective tax system, then the professionals and experts working in tax need to strive for even more clarity on how tax works nationally and globally. It’s clear there is still much work to be done to sustain this hard earned trust it amongst the tax-paying public.’

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

About CA ANZ
Chartered Accountants Australia and New Zealand is a professional body comprised of more than 117,000 members living and working around the world. We focus on the education and lifelong learning of our members, and engage in advocacy and thought leadership in areas of public interest that impact the economy and domestic and international markets.