This article presents the rationale for small businesses to improve their environmental performance and highlights the role that small- and medium-sized practices (SMPs) have in this emerging area of business advisory services.

Liesbet Haustermans became a member of the International Ethics Standards Board for Accountants (IESBA) in January 2016. She was nominated by Deloitte. Prior to serving as a member, she served from 2010 to 2015 as a Technical Advisor to a former member of the IESBA.

Ms. Haustermans works for Deloitte Touche Tohmatsu Limited Global Independence and is Deloitte’s Regional Independence Leader for Europe, Middle East, and Africa. She is also a Director at Deloitte Belgium

Ms. Haustermans is a Belgian Certified Auditor and a member of the Institut des Réviseurs d'Entreprises (Belgian Institute of Auditors).

She was recently appointed as Chair of Accountancy Europe's Professional Ethics and Competences Working Party.

Ms. Haustermans has a master’s degree in commercial engineering and a master's degree in audit and accounting from the Catholic University of Leuven, Belgium.

The International Auditing and Assurance Standards Board (IAASB) today released a Feedback Statement on the responses to its January 2011 Discussion Paper, The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications. The Discussion Paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users. Respondents from across the world, including regulators and oversight authorities, users and preparers, audit firms, and professional bodies provided thoughtful and informative input on issues around disclosures. The Feedback Statement provides an overview of the key messages heard and provides thoughts and recommendations on what can be done to address them.

“Disclosures have always been a critical component of financial reporting, but have become more so today as reporting increasingly incorporates fair value information, estimates involving judgment and complex measurements, and narrative disclosures of some of the risks and characteristics of companies and groups. Accordingly, investors and others look to disclosures for vital insights when making investment decisions,” said Prof. Arnold Schilder, Chairman of the IAASB. “This underscores the importance of the IAASB’s initiative to gain further knowledge and understanding of the issues and share what it has heard to stimulate further thinking and exploration in this area.”

The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain, including the impact of trends in financial reporting, applying materiality to disclosures, evaluating misstatements generated by disclosures, the availability of audit evidence to support disclosures, and work effort. To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. However, the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own, but would require international collaboration and cooperation, particularly with both the accounting standard setters—including the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB)—and regulators.

“Financial information that is reliable, understandable, and relevant is essential, as is the assurance on that information that auditors provide. We wholeheartedly agree with the respondents regarding the need for international collaboration and cooperation among standard setters; securities, audit, and prudential regulators; and other stakeholders. We must work together to develop effective responses to the issues being faced today,” notes James Gunn, IAASB Technical Director.  “Like others, the IAASB has a role in enhancing the public’s confidence in disclosures as a priority—recognizing that individual initiatives must be towards finding a collective solution.”

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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This Feedback Statement provides an overview of the key messages from the responses to the IAASB’s January 2011 Discussion Paper, The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications.

Helene Agélii is the Secretary General and CEO of the Nordic Federation of Public Accountants (NRF).

Between 2011 and 2018, Ms. Agélii was General Counsel at the Swedish Institute for the Accountancy Profession (FAR). In this capacity, much of her work is focused on legislative issues and lobbying activities. During her employment with FAR, Ms. Agélii was appointed as an advisory expert by the Swedish Governmental Committee, assigned to implement the latest (2014) EU Audit Reform. She has also been actively involved with FAR's Policy Group for Ethics, which provides guidance for good practice with regard to the interpretation of independence matters in the EU Audit Regulation. In 2017, Ms. Agélii was also appointed Head of Division at FAR AB, dealing with political, regulatory and professional practice issues for FAR's members.

Between 2012 and 2017, Ms. Agélii served as a member of the International Ethics Standard Board of Accountants.

Prior to her employment at FAR, Ms. Agélii was employed by the Swedish Inspectorate of Auditors, dealing with disciplinary and professional practice matters. She was also secretary to the government committee, assigned to implement the 2006 EU Audit Directive. This committee was also instrumental in providing the legislative proposals with regard to abolishing the mandatory statutory audit in small limited companies in Sweden.

Ms. Agélii is a lawyer by profession and has a background within the Swedish judicial system. Earlier in her career, she was appointed as an associate judge at one of the Swedish administrative appeal courts. Prior to this, she has had five years of judicial training at various courts.

Ms. Agélii graduated from Uppsala University in 1996.

(New York, December 28, 2011)—The global economy continues to experience difficult conditions as the effects of the financial crisis—for example, on corporate cash flows and access to credit—persist. Volatility in capital markets, and issues including measurement and disclosure of exposures to sovereign debt of distressed countries, continue to create uncertainty. The impact of these issues and uncertainty has wide-ranging financial reporting implications that often extend beyond national borders.

These and other current economic conditions present unique challenges for management of entities, those charged with governance, and auditors in meeting their responsibilities, including assessing an entity’s ability to continue as a going concern and making relevant disclosures in the financial statements and, as appropriate, the auditor’s report.

In light of the current environment, the International Auditing and Assurance Standards Board (IAASB) reminds auditors of their important responsibilities under the International Standards on Auditing (ISAs) and that the appropriateness of management’s use of the going concern assumption is a matter to be considered on every audit engagement.

Prof. Arnold Schilder, Chairman of the IAASB, commented, “Difficult economic conditions give rise to many important audit considerations, but none more important—or more difficult—than evaluating management’s assessment of an entity’s ability to continue as a going concern and determining the appropriate auditor reporting in the circumstances.”

“Auditors must remain alert throughout the audit for evidence of events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern. We cannot stress enough the importance of professional skepticism and judgment in evaluating financial statement disclosures and the implications for the auditor’s report when a material uncertainty exists relating to events or conditions that, individually or collectively, may cast doubt on the entity’s ability to continue as a going concern.”

The 2009 IAASB Staff Audit Practice Alert, “Audit Considerations in Respect of Going Concern in the Current Economic Environment,” highlights matters relevant to the consideration of the going concern assumption in the preparation of financial statements. Among other matters, it addresses factors relevant to the assessment of going concern; the period of time considered in making a going concern assessment; financial statement disclosures; forming an opinion on the financial statements and the implications for the auditor’s report.

“While this Audit Practice Alert was released in context of the 2008-2009 credit crisis, many of the matters addressed in it are equally relevant today. For example, an entity may be experiencing a decline in its financial health, or may have material uncertainties arising from direct or indirect exposures to sovereign debt of distressed countries. Auditors are therefore encouraged to review the Alert and, importantly, the relevant requirements in the ISAs,” emphasized Prof. Schilder.

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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