This article highlights the value of review engagements, especially to SMPs in meeting the needs of their SME clients, and explains many of the key features of International Standard on Review Engagements 2400 (Revised), Engagements to Review Historical Financial Statements, released by the IAASB in September 2012. 

The SMP Committee’s Strategy and Work Plan for 2013–2016 outlines the committee’s objectives, strategic plan, and key outputs. It highlights how the SMP Committee’s planned activities align with and support IFAC’s overall strategy and work plan to support the worldwide accountancy profession. While this document contains the SMP Committee’s strategy for the four-year period 2013–2016, the work plan activities detailed are only for 2013. Work plans for the three subsequent years will be developed annually.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, today issued Policy Position Paper 7, Effective Governance, Risk Management, and Internal Control, to highlight good practice and the role of professional accountants in business.

Integrated and effective governance, risk management, and internal control within a robust ethical culture make an invaluable contribution to achieving sustained organizational success. At the same time, organizations often fail because of poor governance and/or ineffective and disconnected risk management and internal control.

“The recent global financial and sovereign debt crises have bought into greater focus the need for all organizations—in both the private and public sectors—to implement governance, risk management, and internal control as integrated parts of their management systems,” said IFAC CEO Ian Ball. “As the global organization for the accountancy profession, IFAC is encouraging and facilitating a better understanding of good practices in governance, risk management, and internal control, and greater global consistency in principles and guidelines to support effective implementation.”

IFAC is actively engaged in promoting relevant knowledge, experience, and learning so the profession can better support the more one million professional accountants worldwide working as employees, advisors, consultants, and self-employed owner-managers in commerce, industry, financial services, education, and the public and not-for-profit sectors. Governance, risk management, and internal controlare among the core competencies of professional accountants working in business, who play a leading and public interest role in planning, implementing, executing, evaluating, and improving these areas. 

“Organizations can be confident that professional accountants are able to contribute strongly to governance, risk management, and internal control,” stated Ball. “This policy position paper, and IFAC’s supporting publications, provide leadership and guidance to the profession and will help facilitate a common view of how organizations can effectively implement governance, risk management, and internal control.”

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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today released the third edition of its Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide). The comprehensive guide is comprised of eight standalone modules on a broad range of topics to help practitioners effectively market, manage, and grow their accounting practices.

“As 2012 comes to a close and economies globally remain sluggish, proper practice management is more important than ever for SMPs to achieve long-term sustainable success and remain competitive in the global marketplace for professional services,” said SMP Committee Chair Giancarlo Attolini. “The revised content in this edition reflects the rapid changes in technology, business needs, internationalization, and competition that continue to transform how practitioners and their clients operate. Smaller practices need to keep pace with these changes that can both enhance their own practices and form the basis of valuable advice for their clients.”

The new edition of the guide features improvements in content and functionality, including new and updated material on value pricing, knowledge networks, social media marketing, building a business advisory practice, and cloud computing. The eight tables of contents are now cross-linked to improve navigation, and the lists of further readings at the end of each module have been updated.

The guide is designed to be culture-neutral with easily translatable language for distribution by IFAC members to practitioners worldwide. The SMP Committee has developed a supplementary user guide, Companion Manual: Guide to Practice Management for SMPs, to help organizations understand the various ways they can use, translate, and adapt the PM Guide.

The third edition of the PM Guide can be downloaded free of charge.

About the SMP Committee
The SMP Committee of the International Federation of Accountants (IFAC) represents the interests of professional accountants operating in small- and medium-sized practices (SMPs). The committee develops guidance and tools and works to ensure the needs of the SMPs are considered by standard setters, regulators, and policy makers. The committee also speaks out on behalf of SMPs to raise awareness of their role and value, especially in supporting SMEs, and the importance of the small business sector overall.

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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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IFAC believes that establishing an integrated and effective system of governance, risk management, and internal control is desirable for all types of organizations and can make an invaluable contribution to achieving sustained organizational success. When organizations fail, the costs to society can be considerable.1 This was illustrated during the global financial and sovereign debt crises, when the failure of organizations—irrespective of size or structure, or whether in the private sector or public sector—led to a variety of adverse consequences.

The International Public Sector Accounting Standards Board (IPSASB) welcomed the recent release of the International Monetary Fund (IMF) paper, Fiscal Transparency, Accountability, and Risk, and its support for International Public Sector Accounting Standards (IPSASs), the globally accepted, high-quality, accrual-based standards issued by the independent standard-setting body.

Many governments, jurisdictions, and international institutions have already adopted IPSASs, while others are working toward their implementation.

The IPSASB advocates for better financial reporting by governments worldwide and the need for improvements in the management of public sector resources. Since 1997, the IPSASB has developed and issued a suite of accrual standards and a cash-basis standard for countries moving toward full accrual accounting. IPSASs promote greater transparency and accountability in public sector finances and allow for enhanced monitoring of government debt and liabilities.

The IMF paper highlights the seriousness and extent of the current inadequacies in governments’ fiscal reporting and accountability and underscores the immense risks associated with these shortcomings.

Fiscal Transparency, Accountability, and Risk also calls for other measures supported by the IPSASB, including: 

• Updating fiscal transparency standards to address gaps in, and inconsistencies between, individual jurisdictions’ standards;
• Including all entities that have fiscal implications for governments (including central banks, public entities, and corporations outside of the general governments) in fiscal forecasting, budgeting, and financial reporting;
• Evaluating countries’ compliance with fiscal transparency standards using, for instance, auditing and assurance as a means for assessing compliance with standards;
• Strengthening incentives for improvements in fiscal transparency practices;
• Aligning the methodologies and standards for fiscal forecasting, budgeting, and financial reporting to reinforce the links between fiscal transparency and long-term sustainability; and
• Strengthening fiscal transparency and public sector financial management in all nations and, in particular, in developing and emerging nations.

IPSASB Chair Andreas Bergmann said the IPSASB agrees with the IMF that the requirements of accounting standards and the statistical framework should be harmonized, as far as the different purposes of the two frameworks permit, adding that it is critical for transparency and accountability that governments around the world have unambiguous guidance. He said the IPSASB also concurs that the efforts to monitor and enforce compliance with international standards, including IPSASs, need to be reinvigorated.

“The IMF paper underlines the need for strong and transparent financial reporting, which has the potential to improve public sector decision making and make governments more accountable to their constituents,” Bergmann said. “As we have witnessed with the sovereign debt crisis, when governments do not properly manage their finances, the consequences can include a loss of democratic control, social unrest, and the failure to meet their current and future commitments.”

About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC. The IPSASB receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, and the governments of Canada, New Zealand, and Switzerland.

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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC), the global organization for professional accountants with members and associates in 129 countries, today released the Statements of Membership Obligations (SMOs) 1-7 (Revised), The SMOs—which are globally recognized as a framework for credible and high-quality professional accountancy organizations (PAOs)—form the basis of the IFAC Member Body Compliance Program and are also of relevance to regulators, educators, the donor community, and others with responsibilities for developing the accountancy profession and promoting the value of professional accountants worldwide.

“We revised the SMOs to clarify IFAC members’ obligations when they have varying degrees of responsibility for the adoption and implementation of international standards and to enhance the requirements for quality assurance and investigation and discipline,” said Manuel Sánchez y Madrid, retiring chair of the IFAC Compliance Advisory Panel (CAP), which led the revisions. “IFAC members will consider the revised requirements and develop appropriate strategic plans to continue strengthening the profession in their countries by equipping professional accountants to meet the challenges and grasp the opportunities of our rapidly transforming world.”

“Professional accountancy organizations are critical to the production of high-quality financial information, public and private sector development, and economic growth,” said IFAC Chief Executive Officer Ian Ball. “They have the ability to adapt to the ever-changing business and economic landscape and, thus, can lead the way in addressing critical issues, such as building capacity, regulatory changes, and enhancing the focus on public sector financial reporting and financial management. With the revised SMOs, PAOs now have a clear framework for the technical aspect of their agenda to better serve the public interest—thereby maintaining the best the profession has to offer.”

IFAC technical staff have also developed A Comparison Guide to the 2012 SMO Revisions, which provides further explanation of the revisions and serves as a tool for IFAC member organizations to identify and understand them.

About the IFAC Member Body Compliance Program
The IFAC Member Body Compliance Program is recognized as the global platform supporting adoption and implementation of international standards and best practices. It shapes agendas and actions with a goal of developing strong professional accountancy organizations and strengthening the accountancy profession around the world. The Program is the responsibility of the IFAC Compliance Staff, reporting to the chief executive. It is overseen by the Compliance Advisory Panel, which—as one of IFAC’s public interest activities—is overseen by the Public Interest Oversight 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. It is comprised of 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC), the global organization for the accountancy profession, today released for comment proposed International Good Practice Guidance (IGPG), Project and Investment Appraisal for Sustainable Value Creation. This principles-based guidance will help the accountancy profession to facilitate sustainable organizations, financial markets, and economies by taking into account economic, environmental, and social considerations for project appraisal and investment decisions.

“The time was right to update the 2008 guidance to reinforce the importance of rigorous project and investment appraisal, with a specific emphasis on facilitating long-term decision making and incorporating sustainability related impacts,” said Roger Tabor, chair of the PAIB Committee. “The revised guidance also sets out the critical role professional accountants in business play in advising on the application of financial principles and theory that are being tested during this current period of market instability.”

More than half of all professional accountants in the world work in business and the public and not-for-profit sectors. They play a crucial role in helping organizations ensure a systematic and analytical approach to project and investment appraisal that incorporates wider external impacts by including relevant costs and benefits into the decision process. External impacts include social impacts, like health and safety and labor practices, the economic impacts of decisions, such as in communities and for suppliers, and environmental impacts, such as biodiversity and pollution.

“Through a better understanding of these wider impacts and externalities, an organization and its stakeholders will have a more complete picture of sustainable value creation,” said Vittorio Lusvarghi (Italy), outgoing chair of the PAIB Committee’s Sustainability Task Force. Mr. Lusvarghi is being succeeded by Athalanallur Natarajan Raman (India).

How to Comment
IFAC and the PAIB Committee invite all stakeholders to comment. To access the Exposure Draft and submit a comment, visit the PAIB Committee section of the IFAC website. Comments on the Exposure Draft are requested by February 28, 2013. You must register on the IFAC website to submit a comment.

About International Good Practice Guidance
International Good Practice Guidance (IGPG) issued by the PAIB Committee cover areas of international and strategic importance in which professional accountants in business are likely to engage. In issuing principles-based guidance, IFAC seeks to foster a common and consistent approach to those aspects of the work of professional accountants in business not covered by international standards. IFAC seeks to clearly identify principles that are generally accepted internationally and applicable to organizations of all sizes in commerce, industry, education, and the public and not-for-profit sectors. Previously issued IGPGs are available on the IFAC website, including Preface to IFAC’s International Good Practice Guidance.

About the PAIB Committee
The PAIB Committee serves IFAC member bodies and professional accountants worldwide who work in commerce, industry, financial services, education, and the public and the not-for-profit sectors. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

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. It is comprised of 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 129 countries and jurisdictions, today welcomed the recent release of the International Monetary Fund (IMF)’s paper, Fiscal Transparency, Accountability, and Risk. The paper highlights the seriousness and extent of the current inadequacies in governments’ fiscal reporting and accountability. It also underscores the immense risks associated with these shortcomings.

In particular, IFAC welcomes the IMF’s support for the International Public Sector Accounting Standards, the globally accepted, high-quality accrual-based standards issued by the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting body. These standards promote greater transparency and accountability in public sector finances and allow for enhanced monitoring of governments’ fiscal positions.

“The current sovereign debt crises have starkly revealed the deficiencies in many governments’ reporting practices and consequently their understanding of their actual fiscal positions,” said Ian Ball, IFAC CEO. “IFAC believes that governments around the world must implement necessary institutional reforms to strengthen governmental financial management, and thereby protect the public, as well as investors in government bonds. This will better allow governments to anticipate and manage fiscal shocks, and also help reduce the risk of future debt crises. IFAC applauds the IMF’s work in this area to support the aim, which we share, of strengthening public sector financial reporting and financial management.”

IFAC supports the key positions presented in this paper. Specifically, IFAC recognizes the importance of:

• Updating fiscal transparency standards to address gaps in, and inconsistencies between, individual jurisdictions’ standards;
• Complying with international standards for public sector financial reporting, including reporting all assets and liabilities by, for example, using IPSASs;
• Including all entities that have fiscal implications for governments (including central banks, public entities, and corporations outside of the general governments) in fiscal forecasting, budgeting, and financial reporting;
• Evaluating countries’ compliance with fiscal transparency standards using, for instance, auditing and assurance as a means for assessing compliance with standards;
• Strengthening incentives for improvements in fiscal transparency practices;
• Strengthening the institutional relationships among international standard-setters;
• Aligning the methodologies and standards for fiscal forecasting, budgeting, and financial reporting to reinforce the links between fiscal transparency and long-term sustainability;
• Building the capacity of professional accountancy organizations and promoting the role they play in improving government financial reporting practices; and
• Strengthening fiscal transparency and public sector financial management in all nations and, in particular, in developing and emerging nations.

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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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