Analyzing data captured by IFAC and CIPFA's International Public Sector Financial Accountability Index, this 2018 Status Report analyzes information from 150 jurisdictions across the globe to develop an understanding of public sector financial reporting. The results paint a positive picture for future accrual and adoption efforts globally.
Today IFAC (the International Federation of Accountants), the voice of the global accountancy profession, announced the election of Dr. In-Ki Joo of the Republic of Korea as its President. Dr. Joo will serve a two-year term through November 2020, serving previously as IFAC Deputy President since November 2016.
A leading academic voice in accountancy, Dr. Joo is a Professor, Emeritus, of Accounting at the Yonsei University School of Business. He previously served as the Dean of the University College and the Dean of Academic Affairs at Yonsei University.
Dr. Joo’s commitment to serving and representing the profession is evident in his varied and deep leadership roles, including on the Board of LG Electronics and for the Korean Institute of Certified Public Accountants. Throughout his career, Dr. Joo has additionally served in top leadership positions at the Confederation of Asian and Pacific Accountants, the Korean Accounting Association, the Korean Academic Society of Business Administration, and the Korean Academy of Business Ethics.
“I believe strongly in the potential of the profession to support the growth and stability of organizations, financial markets, and global economic progress,” said Dr. Joo. “I am honored and energized to lead IFAC during this time of great change and opportunity for our profession. In particular, I look forward to focusing on a future ready profession which harnesses the strength of its education platforms and commitment to ethics.”
IFAC also announced the election of Alan Johnson as Deputy President. Mr. Johnson’s more than three decades in the public and private sector of the profession includes a recent appointment as Non-executive Director and Chair of the Audit and Risk Committee at the Department for International Development (DFID) in the UK.
Previously, Mr. Johnson was CFO of Unilever’s global foods business, responsible for leading the finance functions in over 80 countries. He has also led Unilever’s global internal audit function and has worked in seven countries across Europe, Africa, and Latin America.
Mr. Johnson is a former Director of Jerónimo Martins SGPS, S.A., an $18 billion food retailer with operations in Portugal, Poland, and Colombia.
New Board Members Elected
The IFAC Council elected six new members to the IFAC Board, spanning four continents:
IFAC Admits New Member Organization
IFAC is pleased to admit the Association of Accountants of the Republic of Latvia (AARL) as a new member organization, sponsored by the Latvian Association of Certified Auditors.
Established in 1994 with the objective to certify and improve the professional skills of accountants, the AARL has shown great progress since admission as an IFAC Associate in 2013, particularly in the area of international standards adoption.
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 more than 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.
New Deputy President, Board Members and Member Organization also confirmed
This article was first published by POLITICO Pro on October 24. Access the orginal article here.
By KEVIN DANCEY
Recent news of some high-profile corporate collapses such as the U.K.’s Carillion have, yet again, spurred calls to break up the so-called Big Four accounting firms — Deloitte, EY, KPMG and PwC — to increase competition among them and restrict auditing to ‘audit-only firms.’ Suggestions that the large global audit networks are too big, too diversified, or too tightly woven into the fabric of financial markets abound.
But these proposals fail to recognize that the growth of these firms into multidisciplinary networks is a direct reflection of the market demand for global reach and specialized expertise required to conduct high-quality audits of today’s large, increasingly complex, multinational companies.
The loudest, and perhaps most dangerous call is one that dates back almost a decade —the suggestion that audit firms should only perform audits. Raised by the European Commission in the aftermath of the financial crisis, the audit-only firm idea was rejected at the time as untenable.
The Commission and many others recognized even then, with the damage from the financial crisis still fresh, that splitting auditing from non-auditing businesses would not help enhance audit quality, attract the right talent, or increase competition. It would have the opposite effect, harming the industry as a whole.
Specialists are increasingly central to audits. Rapid technological advances, complex global business models, and the thirst for greater financial disclosure continue to amplify the breadth and complexity of financial statements and their audits. To challenge and probe management, auditors must be able to draw on a range of specialists from big data professionals to experts in taxation, forensics, fraud and valuations.
Moreover, independent audit stakeholder research commissioned in 2016 by the U.K. Financial Reporting Council and Institute of Chartered Accountants of Scotland found that keeping this talent within firms for audit support alone does not provide the depth of experience necessary for successful audits and is “not a viable business model,” because their audit work alone is not extensive enough to retain and develop these experts. The multidisciplinary approach, however, allows these experts to continually hone their skills through non-audit consultancy contracts.
But a multidisciplinary model isn’t enough. A high-quality audit also stems from a consistent culture of ethics and integrity throughout the entire firm and across all of its service offerings. Maintaining a full range of expertise in-house is important to ensuring a consistent culture of quality throughout the firm, and such values must be backed up by the right governance, incentives and financial rewards. A firm with one set of values for the audit practice and a different culture or set of values for other business lines is simply not appropriate.
As audits become increasingly complex, sound regulation is an imperative. The public interest goal for audit regulation must always be to ensure that independent, high-quality audits of today’s large, complex businesses are delivered to investors and the public. Effective oversight plays a critical role in getting this right.
Such oversight needs to take the form of inspections performed by independent audit regulators, ensure robust auditor independence from any undue influence — whether from clients, interests, relationships or other services — and follow requirements set by standards boards that are independent of the profession.
The questions being raised in the wake of the corporate collapses are fair, but we should resist the recent call for returning to audit-only firms. The simplicity may sound tempting, but the model itself is out of touch with the reality of large businesses today.
There’s nothing simple about them.
Kevin Dancey is the incoming CEO of the International Federation of Accountants.
The global search for an exceptional leader to Chair the International Auditing and Assurance Standards Board (IAASB) will be restarted by the Interim Nominating Committee. Mr. Martin Baumann, who had been appointed to become Chair of the IAASB on January 1, 2019, has decided not to assume the post for personal reasons.
“I am disappointed that unforeseen personal circumstances will prevent me from taking on this important role,” said Martin Baumann. “I remain impressed with the public interest work that the IAASB has already achieved and continue to see remarkable opportunities for the future.”
The Interim Nominating Committee, which was formed by the Monitoring Group in February 2018 to conduct the process for the next IAASB Chair, will again follow an open, timely and transparent process to select the most suitable candidate to chair the IAASB for a 2019-2021 term.
Prof. Arnold Schilder, whose term as IAASB Chairman is scheduled to conclude at end of 2018, has agreed to stay on through early 2019, as necessary, to ensure a smooth transition to a new Chair.
"While we are disappointed that Mr. Baumann cannot take on the important role to lead the IAASB during this crucial period, we wish him our best in the future,” said Gerben Everts, Chair of the Monitoring Group. “We are pleased that Prof. Schilder has agreed to extend his service until a new Chair is found, and have asked the Interim Nominating Committee to restart this important search.”
“This is a crucial inflection point for high-quality International audit standard setting,” said Rachel Grimes, IFAC President. “It is disappointing that Marty is unable to assume the position, but we are confident that the Interim Nominating Committee will find a similarly well-suited, high-caliber candidate to lead the IAASB into the future.”
For more information about the work of the IAASB, visit www.iaasb.org.
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.
Martin Baumann steps down from role for personal reasons
All sessions will be streamed live on the IPSASB YouTube Channel.