| IFAC

IAASB Indicates Future Direction of Improved Auditor Reporting; Consults on Value, Viability, and Illustrative Report

Jun 22, 2012 New York, New York English

The International Auditing and Assurance Standards Board (IAASB) today released a key milestone consultation document in its work to enhance, on a global basis, the communicative value of the auditor’s report on financial statements. The IAASB’s Invitation to Comment: Improving the Auditor's Report sets out the indicative direction of the board’s future standard-setting proposals to improve how and what auditors report in accordance with International Standards on Auditing (ISAs).

The Invitation to Comment (ITC) features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements. The ITC also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought.

“The global financial crisis has spurred users of audited financial statements to want to know more about individual audits and to gain further insights into the audited entity and its financial statements. While the auditor’s opinion is valued, many perceive that the auditor’s report could be more informative and shine light on key matters based on the auditor’s work. Change, therefore, is essential and the IAASB is strongly committed in the public interest to deliver meaningful improvements to auditor reporting as quickly as possible,” said Prof. Arnold Schilder, IAASB chairman.

At the heart of the suggested improvements is the need for transparency on matters specific to the audited financial statements and the audit that was performed. A proposed new section in the auditor’s report, “Auditor Commentary,” is envisaged to be the mechanism by which auditors may call attention to matters that are, in the auditor’s judgment, likely to be most important to the users’ understanding of the audited financial statements or the audit. There are also suggested improvements with respect to new statements regarding going concern and other information in documents containing the audited financial statements, the description of the responsibilities of the auditor and key features of the audit itself, and enhancement to the format of the report.

“The Consultative Advisory Group (CAG), which comprises over 30 member organizations and observers that are key stakeholders of the IAASB, is of the view that this is a very important project,” said Linda de Beer, IAASB CAG chairman. “All CAG member organizations, but in particular user groups and regulators, are of the view that the auditor’s report should point the reader to key aspects important for an understanding of the entity and its financial statements. Mandatory auditor commentary will go a long way to address this need of shareholders and others. The CAG responded very positively at its meeting in March 2012 to the aspects that the IAASB is addressing in the ITC.”

Noted James Gunn, IAASB technical director, “The IAASB has heard – and indeed embraces – the call from stakeholders to re-examine and, to an extent re-invent, the auditor’s report. There is still much work to be done, and the IAASB will continue its deliberations in 2012 and 2013. However, it is critical that the IAASB hear from a wide range of stakeholders at this stage regarding the suggested improvements and whether they will achieve the value that users seek in order for the board’s future standard-setting proposals to develop in a way that will best serve the public interest.”

The ITC includes planned dates for IAASB roundtables in the North American (September 10), European (September 14), and Asia Pacific (October 8) regions. The IAASB intends to finalize plans for these roundtables in the coming weeks, and will post them on its Auditor Reporting page.

How to Comment
The IAASB invites all stakeholders to respond to this ITC. To access the ITC and submit a comment, visit the IAASB’s website. Comments on the ITC are requested by October 8, 2012.

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 IFAC.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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Jörgen Holmquist Appointed First Independent Chair of the International Ethics Standards Board for Accountants

Jun 19, 2012 New York, New York English

The International Federation of Accountants today announced that Jörgen Holmquist has been appointed as the first independent chair of the International Ethics Standards Board for Accountants (IESBA), beginning September 2012 for a three-year term. The appointment has been approved by the Public Interest Oversight Board*.

“Jörgen brings a wealth of experience to the position of independent chair of the IESBA,” said IFAC President Göran Tidström. “In his past roles, as well as in his current position as a public member of the IESBA, he has shown strong leadership skills, technical competence, and a commitment to the IESBA and its mission to protect the public interest. I am confident that, under his leadership, the IESBA will continue to make a highly effective contribution to ethics standard setting as well as, importantly, adoption and implementation. I would like also to acknowledge the exemplary contribution and commitment Ken Dakdduk brought to the role, and to his position on the board, over the past seven years.”

Mr. Holmquist has been a public member of the IESBA since 2011. He served as Director General, DG Internal Market and Services, European Commission from 2007 to 2010, where he was responsible for developing the European Union (EU) regulatory response to the financial crisis, including legislation and policy concerning accounting and auditing. Before joining the European Commission in 1997, he served in the Swedish Ministry of Finance for twenty years. Mr. Holmquist holds a degree in Economics and Mathematics from the University of Stockholm, Sweden and is a Fellow of the Weatherhead Center for International Affairs at Harvard University.

The appointment of an independent chair for the IESBA was recommended by the Monitoring Group in its “Review of the IFAC Reforms — Final Report,” which was issued in 2010.

In his role as chair, Jörgen Holmquist will provide leadership to the IESBA. A key function of the chair is to enable, encourage, and promote a deeper understanding by stakeholders and the public of the strategies and activities of the IESBA. The chair also leads the strategic direction of the IESBA, working closely with IESBA staff, and facilitates the deliberative and consultative processes that underpin the authority of the IESBA and the legitimacy of its standards and activities. In addition, the chair is involved in developing and maintaining effective relationships with national standard setters, regulators, and other key stakeholders.

“Convergence to a single set of high-quality ethical standards will contribute to efficient, sustainable, and vibrant capital markets and is in the public interest,” Jörgen Holmquist commented. "I look forward to advancing the IESBA’s current initiatives, as well as the recently announced additional workstreams, enhancing relationships with national standard setters, regulators, governments, and the public and promoting adoption and implementation of the Code."

*Notes to Editors
The international Public Interest Oversight Board (PIOB) was established in February 2005 to ensure that international auditing and assurance, ethics, and education standards for the accountancy profession are set in a transparent manner that reflects the public interest. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IESBA, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

About the IESBA
The International Ethics Standards Board for Accountants (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.ifac.org/ethics for more information.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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IFAC Announces Appointment of Fayezul Choudhury as New Chief Executive Officer

Jun 15, 2012 New York, New York English

The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 127 countries, is pleased to announce that Fayezul (Fayez) Choudhury has been selected as the new CEO of IFAC. He succeeds current CEO Ian Ball, whose contract is set to expire in February 2013.

Mr. Choudhury was previously with the World Bank, where his last two assignments were as Vice President, Corporate Finance and Risk Management; and Controller and Vice President, Strategic Planning and Resource Management. In this latter role he was the World Bank's spokesperson on global accounting and auditing issues. Mr. Choudhury started his career in 1974 with Price Waterhouse in London, initially in public accounting and later management consulting. During his career with Price Waterhouse, he spent three years in Nigeria, developing the consulting practice in that region.

Mr. Choudhury has served on a number of high level representative bodies He was a member of the Public Interest Oversight Board (PIOB) from its formation in 2005 until 2010. The PIOB was established to ensure that international auditing and assurance, ethics, and education standards for the accountancy profession are set in a transparent manner that reflects the public interest. Mr. Choudhury also chaired the Global Steering Committee of the International Forum for Accountancy Development and was a member of the Standards Advisory Council of the International Accounting Standards Board. He served as a member of the Iraq Advisory and Monitoring Board established by the Security Council of the United Nations.

Mr. Choudhury has an MA (Hons) in Engineering Science and Economics from the University of Oxford. He is also a Fellow of the Institute of Chartered Accountants of England and Wales.

IFAC President Göran Tidström notes that “Fayez has more than 36 years of experience in the accountancy profession. He brings a strong understanding of the role of accounting in organizations and knowledge of the issues surrounding the global profession. He was instrumental in the discussions that led to the creation of the current private/public sector governance arrangements for international standard-setting and has extensive knowledge of IFAC through his work in the PIOB. We are very happy to welcome Fayez to this new role.”

Mr. Choudhury stated “I am honored to have been selected for this position. I firmly believe that accountancy is one of the core professions that anchor the functioning of modern societies and, as such, the role of IFAC is critically important.”

Mr. Choudhury was recruited after an extensive global search led by an executive search firm.

About IFAC
IFAC (www.ifac.org) 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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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2011 IESBA Annual Report

Ethics for the Global Accounting Profession—Building on the Groundwork

The 2011 IESBA Annual Report summarizes the progress made on the IESBA's 2011 Work Plan, including key projects on conflicts of interest, addressing a breach of a requirement of the Code, and responding to a suspected illegal act.

Jun 12, 2012

IESBA

English

International Ethics Standards Board for Accountants Releases 2011 Annual Report

Jun 13, 2012 New York, New York English

The International Ethics Standards Board for Accountants (IESBA) today released its 2011 Annual Report, Ethics for the Global Accounting Profession—Building on the Groundwork.

The report describes the IESBA’s commitment to developing high-quality international ethics standards for the global accountancy profession as presented in the Code of Ethics for Professional Accountants (the Code). It emphasizes the board’s long-term objective of facilitating the convergence of national and international ethics standards and continued work to support their consistent implementation.

The report summarizes the progress made on the IESBA's 2011 Work Plan, including key projects on conflicts of interest, addressing a breach of a requirement of the Code, and responding to a suspected illegal act. It also looks forward to 2012, outlining the board’s plans to add additional workstreams (summarized in a Staff Update) to its 2012 Work Plan in response to matters under consideration by the European Commission, US Public Company Accounting Oversight Board, and others.

“As significant changes to the Code took effect on January 1, 2011, we focused our 2011 outreach activities on helping those who had adopted the Code to understand these changes and implement the standards consistently,” said Ken Dakdduk, chair of the IESBA. “In issuing our first annual report, we aim to support our outreach activities by promoting transparency and communication with the board's stakeholders. The report highlights our achievements during 2011 and also the dynamic nature of the IESBA’s Work Plan. To best serve the public interest, the IESBA must continually review its activities and maintain the flexibility to respond to developments in the global regulatory and business communities.”

The report also includes a report from Richard Fleck, chair of the IESBA Consultative Advisory Group (CAG), which outlines the work of the CAG in providing input to the IESBA.

To access and download the 2011 IESBA Annual Report, visit www.ethicsboard.org.

About the IESBA
The International Ethics Standards Board for Accountants (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.

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Global Sustainability and Growth Recommendations for the G-20 Leaders’ Summit

The International Federation of Accountants (IFAC) is pleased to present the following recommendations for consideration at the G-20 Leaders’ Summit on June 18-19, 2012 in Los Cabos, Mexico. These recommendations focus on actions aimed at promoting global sustainability and growth, and are directed towards several of the stated priorities of the Mexican presidency of the G-20.

Jun 7, 2012

IFAC

English

IAASB Releases New Global Standard on Assurance on Greenhouse Gas Statements

Jun 6, 2012 New York, New York English

The International Auditing and Assurance Standards Board (IAASB) today released new International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas (GHG) Statements. This new standard addresses an increasingly relevant global assurance service in support of reliable emissions reporting, whether for regulatory compliance purposes or undertaken on a voluntary basis to inform investors, consumers, and others.

“Today, there is clear and growing demand for companies to disclose their environmental impacts and initiatives and to report detailed emissions information, often through GHG statements. As this demand increases, public confidence in assured GHG emissions information becomes more significant, if not essential,” said Prof. Arnold Schilder, IAASB chairman. “In promulgating this new standard, the IAASB seeks to enhance the consistency and quality of assurance engagements on GHG information, recognizing the importance to the public interest of decisions being made on the basis of that information.”

New ISAE 3410 addresses practitioners’ responsibilities in identifying, assessing, and responding to risks of material misstatement when engaged to report on GHG statements. It sets out requirements and guidance on the work effort and reporting responsibilities of practitioners for both reasonable and limited assurance engagements, as demand for both is increasingly evident in the marketplace. The ISAE is applicable to a broad range of situations, from emissions from electricity used at a single office, to emissions from complex physical or chemical processes at several facilities across a supply chain.

”ISAE 3410 is a landmark standard in many respects,” noted James Gunn, IAASB technical director. “It responds to societal demands for standards that support quality in assurance services in areas other than financial reporting. It deals with engagements that largely need to be undertaken by a multidisciplinary team, where the assurance practitioner needs to integrate experts—in engineering or environmental science, for example—into various stages of the engagement. Notably, it also covers reporting for both reasonable and limited assurance engagements. It provides illustrative reports with features that distinguish for readers the difference between reasonable and limited assurance engagements, and shows how limited assurance reports may be further tailored to enhance users’ understanding of the assurance obtained.”

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 IFAC.

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Acknowledges Importance of Public Confidence in Credibility of Emissions Reporting

IAASB 2012-2014 Strategy and Work Program Sets Auditor Reporting as Top Priority and Highlights Other Relevant Audit and Assurance Initiatives

Jun 5, 2012 New York, New York English

The International Auditing and Assurance Standards Board (IAASB) today released its Strategy and Work Program, 2012–2014. Developed through wide public consultation, it sets the direction and priorities for the IAASB’s activities over the next three years with a focus on:

Supporting global financial stability;
Enhancing the role, relevance, and quality of assurance and related services in today’s evolving world; and
Facilitating adoption and implementation of the IAASB’s standards.

“Our forward strategy is to build on the strong base of standards that has been developed to date, to address new assurance topics, and to further promote the benefits of the International Standards on Auditing (ISAs) and our other international standards,” said Prof. Arnold Schilder, IAASB chairman. “The IAASB is constantly challenged to respond to growing demands from a diverse range of stakeholders in a continuously changing international environment. The areas addressed in our strategy are those we have heard to be the most important in the public interest, in particular our work on auditor reporting.”

As the main priority for 2012–2014, the IAASB’s Strategy and Work Program identifies the enhancement of auditor reporting standards, a topic that the IAASB will again deliberate intensively at its June 2012 meeting in Edinburgh. The strategy is in keeping with the IAASB’s commitment to continue work on a number of its key initiatives related to audit quality, disclosures, review engagements, and assurance engagements, including assurance on greenhouse gas statements. In addition, the IAASB will continue to monitor the adoption and implementation of ISAs globally and focus on standards and initiatives relevant to small- and medium-sized entities. It will also explore appropriate actions stemming from the global financial crisis relating to banking and fair values.

“Constructive dialogue and collaboration with others will be critical to identifying areas for innovation and improvement and to finding solutions to global issues, both now and in the future,” explained James Gunn, IAASB technical director. “The IAASB also recognizes its responsibility to identify matters within its mandate that have significant longer-term implications and to ensure that assurance and related services are relevant and responsive to the public interest, for example in emerging areas like integrated reporting. I am confident that the IAASB’s strategy and planned initiatives will assist it in fulfilling this responsibility.”

For additional information on the IAASB’s current projects and the current project timetable, visit the IAASB’s project pages on its website.

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IAASB Strategy and Work Program, 2012–2014

This Strategy and Work Program sets the direction and priorities for the activities of the IAASB for the three-year period from January 2012 to December 2014, set within the stated objective and strategic initiatives of the IAASB’s Terms of Reference. It responds to significant developments in the environment in which audit, other assurance and related services are performed and in which standards for such services are set.

Jun 4, 2012

IAASB

English

Basis for Conclusions: IAASB Strategy and Work Program, 2012–2014

Jun 4, 2012

IAASB

English

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