The International Public Sector Accounting Standards Board (IPSASB) staff have issued this Staff Questions and Answers document on the application of materiality to preparing financial statements. It summarizes existing provisions in International Public Sector Accounting Standards for materiality.

This publication is not an IPSASB pronouncement and does not represent IPSASB members' views.

An accompanying podcast with IPSASB staff is also available.

The highlights of the March 2017 meeting focus on key IESBA projects and initiatives, including—among other things—professional skepticism; a review of Part C of the Code of the Ethics for Professional Accountants (the Code); the IESBA’s future strategy; and fee-related matters. The meeting included an update on an initiative of the joint IAASB-IESBA-IAESB Professional Skepticism Working Group to develop a communication to inform stakeholders about its key observations from its work to date on professional skepticism (PS).

Since the meeting, the IESBA released in May an Exposure Draft, Proposed Application Material Relating to Professional Skepticism and Professional Judgment. The Exposure Draft includes a proposal to link, for the first time, compliance with fundamental principles in the Code with the exercise of professional skepticism in the context of audit and other assurance engagements. The Exposure Draft is open for public comment until July 25.

The IESBA also considered and provided feedback on a Question & Answer publication prepared by IESBA staff to support implementation of the revised long association provisions finalized in December last year. The publication is now available on the IESBA website.

• Listen to March 2017 Meeting Highlights
• Read March 2017 Meeting Summary

Global economic stability and transparency and the rebuilding of public trust will be greatly enhanced by a determined G20 push for stronger governance across all sectors, according to IFAC—the International Federation of Accountants. In advance of the G20 Summit 2017 in Hamburg, Germany on July 7-8, IFAC issued actionable recommendations for G20 countries that will support both the global economy and the G20’s 2017 objectives.

“Rebuilding trust in the global economy and financial systems is critical to inspiring the confidence the world needs for sustained economic growth. Especially in these uncertain times, stakeholders with a passion for transparent, accountable governance must work together,” said IFAC Chief Executive Officer, Fayez Choudhury. “Individuals and institutions must be empowered by strong governance; fortified by a consistent, transparent regulatory environment; and enabled by access to a high-speed, secure digital environment.”

IFAC calls on the G20 and other key stakeholders in the global economy to collaborate on:

• Raising governance standards across all economic sectors to increase transparency and accountability, and help restore trust and inspire confidence in business and government, key to the G20’s aspirations to: build resilience, improve sustainability, and assume responsibility.
• Fostering greater transparency and regulatory consistency to achieve growth, confidence, and stability. This requires an inclusive digital and economic environment for businesses of all sizes, as well as implementation and adoption of high-quality internationally-accepted regulations and standards.

IFAC’s member organizations represent almost 3 million accountants globally. They contribute nearly USD$250 billion gross value added annually, and facilitate higher standards of living. Recent research also shows that a higher percentage of accountants in the workforce strongly correlates to better outcomes in Transparency International’s Corruption Perceptions Index—and that the impact is improved even further when accountants operate in countries with strong governance architectures.

IFAC strengthens the accountancy profession by:

• supporting the development of high-quality international standards;
• promoting the adoption and implementation of these standards;
• building the capacity of professional accountancy organizations; and
• speaking out on public interest issues.

Visit IFAC’s website for IFAC’s full recommendations to the G20.

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.

e International Auditing and Assurance Standards Board (IAASB) Data Analytics Working Group is pleased to announce the members of the recently-established Data Analytics Project Advisory Panel.

This Advisory Panel was established to inform the IAASB’s work on data analytics by:

• advising the Working Group (and other IAASB task forces/working groups as necessary) on the developments in data analytics’ use in audit, thereby further informing the IAASB’s thinking and approach to its standard-setting activities;
• serving as a technical resource to the IAASB and Working Group and providing an external perspective on the use of data analytics in a financial statement audit;
• acting as a sounding board for the Working Group in Request for Input feedback considerations and when exploring the potential way forward, including implications and timing; and
• providing input to any guidance or materials the IAASB may develop.

In connection with the establishment of the Working Group and its technology focus, the IAASB released a Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics, in September 2016. It provides insights into data analytics’ opportunities and challenges and outlines the Working Group’s insights to date.

Additional information and project updates are available on the IAASB’s project page.

The International Ethics Standards Board for Accountants^® (IESBA^®) today released for public comment the Exposure Draft, Proposed Application Material Relating to Professional Skepticism and Professional Judgment. The proposed guidance for the first time links key concepts in the IESBA Code of Ethics for Professional Accountants^™ (the Code) and clarifies their application, namely:

• how compliance with the fundamental principles in the Code supports professional skepticism by auditors and assurance practitioners for audit, review, and other assurance engagements; and
• the importance of professional accountants obtaining a sufficient understanding of the facts and circumstances known to them when exercising professional judgment in applying the conceptual framework underpinning the Code.

“Compliance with the fundamental principles and professional skepticism are essential obligations of professional accountants for audit and other assurance engagements,” said IESBA Chairman Dr. Stavros Thomadakis. “We are articulating for the first time the linkage between the two, making clear the important role that the fundamental principles play in enabling auditors and assurance practitioners to meet the public’s expectations about exercising professional skepticism.”

The proposed guidance addressing the fundamental principles and professional skepticism responds to a recommendation from the tripartite Professional Skepticism Working Group established by the IESBA, the International Auditing and Assurance Standards Board (IAASB), and the International Accounting Education Standards Board (IAESB).

“While developing this guidance, the IESBA also emphasizes the importance of professional accountants not simply accepting information at face value when exercising professional judgment,” noted IESBA Technical Director, Ken Siong.

Once finalized, this material will be included in the clarified and restructured Code that the IESBA plans to complete by the end of 2017. Beyond this, the IESBA will continue to explore further issues relating to professional skepticism in close coordination with the IAASB and IAESB, and in consultation with stakeholders.

How to Comment
The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the Ethics Board’s website at www.ethicsboard.org. Comments are requested by July 25, 2017.

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 Code of Ethics for Professional Accountants, 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.

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.