Professional Accountancy Organization Development & Advisory Group

Established November 2005

The Advisory Group helps IFAC support strong, sustainable professional accountancy organizations—the most effective, efficient, and sustainable source for advancing the accountancy profession—around the world as part of the IFAC’s capacity building efforts. The Advisory Group actively contributes to IFAC’s strategic objectives, especially in preparing a future-ready profession. It primarily focuses on:

This standard sets out a comprehensive framework that covers all forms of inducement and is applicable to both professional accountants in business and professional accountants in public practice in situations involving the offering or accepting of an inducement.

The International Ethics Standards Board for Accountants^® (IESBA^®) today released new enhancements to its global ethics code which address more fully the responsibilities of professional accountants around the offering and accepting of inducements.

The revised standard sets out a comprehensive framework that more clearly delineates the boundaries of acceptable inducements, and guides the behavior and actions of professional accountants in business and in public practice in situations involving inducements.

“Incentives motivate behavior, and some inducements can be a powerful incentive to unethical behavior,” said IESBA Chairman Dr. Stavros Thomadakis. “This revised standard complements our standard on NOCLAR to offer a full system of ethical defenses that relate both to malfeasance committed by others and to accountants’ own involvement in potentially unethical behaviors.”

Central to this framework is a new intent test that prohibits the offering or accepting of inducements where there is actual or perceived intent to improperly influence the behavior of the recipient or of another individual. The framework also:

• Clarifies the meaning of an inducement;
• Establishes a requirement to understand and comply with laws and regulations that prohibit the offering or accepting of inducements in certain circumstances, such as in relation to bribery and corruption;
• Guides professional accountants in applying the enhanced conceptual framework underpinning the International Code of Ethics for Professional Accountants (including International Independence Standards) where there is no improper intent; and
• Provides enhanced guidance on the offering and accepting of inducements by professional accountants’ immediate or close family members.

The revised provisions become effective June 2019, including consequential amendments to the independence provisions of the Code addressing gifts and hospitality. The changes constitute the last piece of the recently revised and restructured Code.

About the IESBA

The IESBA is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the International Code of Ethics for Professional Accountants^TM (including International Independence Standards^TM), which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

IFAC (International Federation of Accountants) and the International Bar Association (IBA) today announce their shared commitment to continue their work combating corruption in all its forms. Published ahead of the gathering of global economic leaders (G20), taking place in Buenos Aires, Argentina, the signed IBA and IFAC Anti-Corruption Mandate highlights the role of business and government in safeguarding a fair and transparent future for all.

“Grounded in a strong ethical code, professional accountants across the globe play a critical role in the fight against corruption, bringing essential transparency, relevance and integrity to the systems that underpin vibrant economies,” says IFAC CEO Fayezul Choudhury. “We are proud to partner with the IBA to highlight and advance the role of our global professions in serving the public interest now and in the future.”

According to the International Monetary Fund, bribery, which is just one aspect of corruption, costs the global economy nearly $2tn – approximately two per cent of global GDP – each year. However, where governance architecture is strong, the role played by professional accountants in tackling corruption is amplified, such as in G20 countries and in countries that have adopted anti-money laundering laws in line with international recommendations.

The presence of professional accountancy organizations is another important factor, as they advance the adoption of ethical, educational, investigation and discipline requirements that are central to the profession. According to research from IFAC, there is a strong link between the percentage of professional accountants in the workforce and more favorable scores on the main global measure of corruption.

Mark Ellis, IBA Executive Director, commented: “Corruption is a significant impediment to economic stability and development, tarnishing public trust in institutions and inhibiting citizens’ access to opportunities and prosperity. With empirical research that demonstrates the world’s poor pays the highest percentage of their income in bribes, the imminent meeting of the G20 Finance Ministers and Central Bank Governors presents an important opportunity to remind leaders that every stolen dollar, euro, lira, peso, pound, rand, real, rouble, rupee, yen or yuan robs someone of an equal opportunity in life, and that everyone has a responsibility to combat corruption. The IBA-IFAC cross-sector collaboration aims to reinforce the role and responsibility of international professions to tackle corruption, and we are delighted to be partnering with IFAC.”

In all its variations, corruption has far reaching negative consequences, including when money is misappropriated through illicit financial flows that can lead to the funding of organized high level crimes such as drug trafficking, human trafficking and terrorism.

The international accountancy and legal professions continue to promote core ethical values, facilitate national and international cooperation in the fight against corruption, and advance monitoring and enforcement systems in the public interest. With the IBA and IFAC global membership spanning more than 170 countries, they play a vital role in training, educating and supporting professionals to uphold the highest levels of integrity and ethics in business.

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.

About the International Bar Association
The International Bar Association (IBA), established in 1947, is the world’s leading organisation of international legal practitioners, bar associations and law societies, spanning more than 170 countries. It is comprised of specialist committees relating to practice areas of law, including the Anti-Corruption Committee and the Anti-Money Laundering Committee. Through its global membership of individual lawyers, law firms, bar associations and law societies, the IBA influences the development of international law reform and shapes the future of the legal profession throughout the world.

Small- and medium-sized practices (SMPs) may require practical support when implementing the International Standards on Auditing (ISAs) in audits of small- and medium-sized entities (SMEs). IFAC (International Federations of Accountants) has updated the Guide to Using ISAs in the Audits of SMEs, Fourth Edition (the Guide) to help firms efficiently and proportionally apply ISAs on SME audits.

This fourth edition is updated to reflect recent changes to the ISAs including International Auditing and Assurance Standards Board (IAASB) projects on:

• Auditor Reporting;
• Disclosures;
• The Auditor’s Responsibilities Relating to Other Information; and
• Using the Work of Internal Auditors.

The Guide is designed for use by all practitioners. Volume 1 covers the fundamental concepts of a risk-based audit in conformance with the ISAs. Volume 2 contains practical guidance on performing SME audits, including two illustrative case studies—one of an SME audit and one of a micro-entity audit.

Since it was first published in 2007, the Guide has been downloaded over 100,000 times and there are 22 translations completed or in progress. To help facilitate additional translations, IFAC Members can request a Word version of the Guide with tracked changes.

Many firms use the Guide for training purposes and as the basis for firm manuals. In order to help them and our member organizations maximize the Guide’s use, IFAC has also updated the Companion Manual which provides practical ‘best use’ suggestions for the Guide.

IFAC has a long history of developing implementation support for international standards. In addition to the Guide, the extensive suite of material includes:

• Guide to Quality Control for Small- and Medium-Sized Practices, Third Edition
• Guide to Review Engagements
• Guide to Compilation Engagements
• Agreed-Upon Procedures (AUP) Engagements A Growth and Value Opportunity
• Choosing the Right Service: Comparing Audit, Review, Compilation, and Agreed-Upon Procedure Services

The International Auditing and Assurance Standards Board (IAASB) seeks public comment by November 2, 2018 on Exposure Draft, ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement.

To ensure that International Standards on Auditing continue to form the basis for high-quality, valuable and relevant global audits, the IAASB proposes more robust requirements and improved guidance to:

• Drive consistent and effective identification and assessment of risks of material misstatement;
• Modernize ISA 315 to meet evolving business needs, including information technology, and how auditors use automated tools and techniques, including data analytics, to perform audit procedures;
• Improve the standard’s applicability to entities across a wide spectrum of circumstances and complexities; and
• Focus auditors on exercising professional skepticism throughout the risk identification and assessment process.

Through its ISA Implementation Monitoring Project and targeted continuing stakeholder outreach, the IAASB has received significant stakeholder input as the proposed revisions have been developed. The Exposure Draft is a key element of the IAASB’s work to address the fundamental elements of an audit and thereby enhance audit quality.