The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 127 countries, today presented the IFAC International Gold Service Award to Sir David Tweedie and Stephen Zeff. The awards were presented at IFAC’s annual Council Meeting in Berlin, Germany, by Göran Tidström, president of IFAC.

The IFAC International Gold Service Award recognizes outstanding contributions to the accountancy profession.

In his remarks, Mr. Tidström highlighted Sir David Tweedie’s substantial contributions to convergence and to restoring confidence in financial reporting in the wake of the global financial crisis. In particular, in his role as chairman of the International Accounting Standards Board (IASB), he was tireless in promoting the adoption and implementation of International Financial Reporting Standards (IFRS) as the first truly global, high-quality set of accounting standards. He led the IASB during the implementation of IFRS by the European Union in 2005 and the development and publication of IFRS for Small- and Medium-Sized Entities (SMEs) in 2009. His work has helped improve accounting practices around the world, especially in countries where there is no tradition of accounting standards.

Tidström also highlighted the important contributions made by Stephen Zeff, a professor at Rice University, to the understanding of how the accounting profession, and financial reporting in particular, has developed internationally in recent decades. Zeff is a leading international expert on the history of financial reporting, and his historical perspective reflects several themes, among them the historical development of the standard-setting process, the evolution of accounting thought, and the maturing of the profession and practice of auditing. His research and published work addressing the unique problems and challenges confronting the accountancy profession has contributed greatly to the profession’s development worldwide.

“I am honored to present the IFAC International Gold Service Award to Sir David Tweedie and Stephen Zeff,” said Göran Tidström. “Their dedication and achievements have strengthened the profession internationally and exemplify IFAC’s vision: that the global accountancy profession is recognized as a valued leader in the development of strong and sustainable organizations, financial markets, and economies.”

About the IFAC International Gold Service Award
The IFAC International Gold Service Award was created by the IFAC Council in 2010 to recognize outstanding individual contributions to the accountancy profession. 

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 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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The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 127 countries, today announced at the IFAC Council meeting in Berlin, Germany, that four new associates were admitted to the organization: Chamber of Professional Accountants of the Republic of Kazakhstan (Kazakhstan), Institute of Certified Accountants of Montenegro (Montenegro), Instituto Salvadoreño de Contadores Públicos (El Salvador), and Ordre des Experts-Comptables et Comptables Agréés du Bénin (Benin). One existing associate was admitted to the organization as a member: Institute of Financial Accountants (United Kingdom). With the admission of these new associates and move of an associate to a member—along with the merger of two Danish professional accountancy organizations, which took place in May 2011—IFAC now has 167 members and associates in 127 countries.

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 International Good Practice Guidance is designed to help professional accountants in business use predictive business analytics to identify new opportunities for growth and improvement in their organizations, as well as to highlight areas for corrective actions and strategy adaptations. Predictive business analytics can help any organization select the appropriate actions and best decisions to improve performance and achieve sustainable organizational success.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has issued new International Good Practice Guidance, Predictive Business Analytics: Improving Business Performance with Forward-Looking Measures. The guidance is designed to help professional accountants in business working in commerce, industry, financial services, education, and the public and not-for-profit sectors, as well as their organizations, embrace predictive business analytics to help develop and execute strategy.

Professional accountants in business can use predictive business analytics to identify new opportunities for growth and improvement in their organizations, as well as to highlight areas for corrective actions and strategy adaptations. Predictive business analytics can help any organization select the appropriate actions and best decisions to improve performance and achieve sustainable organizational success.

“Predictive business analytics is a tool that professional accountants should use to help their organizations better understand likely future performance outcomes,” said Roger Tabor, chair of the PAIB Committee. “Professional accountants in business should be able to assist their organizations in making the most of predictive business analytics and forward-looking indicators of performance to improve strategy and performance management enterprise-wide.”

This International Good Practice Guidance assists professional accountants in business as they contend with rising expectations from their organizations. The quality of management information expected by internal business users is expanding, both in terms of the range of data to be considered and the level of required analysis. From strategic issues to routine tasks, executives, managers, and operational staff require higher-quality information from professional accountants to support strategic and operational decision making.

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. IFAC is comprised of 164 members and associates in 125 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 Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities (ISA Guide). Intended to help practitioners understand and efficiently apply the clarified ISAs to audits of small- and medium- sized entities (SMEs), the updated guide features a number of refinements to the technical content and presentation.

“Practitioners in many jurisdictions have begun using the clarified ISAs, and effective implementation of these standards is key to audit quality,” said SMP Committee Chair Sylvie Voghel. “The ISA Guide should help practitioners conduct high-quality, cost-effective audits of SMEs, thereby contributing to the quality of the profession and our mission to serve the wider public interest.”

The comprehensive implementation guide offers a practical “how-to” approach for conducting risk-based audits of SMEs. First issued in 2007 and developed with the Canadian Institute of Chartered Accountants, it is designed for use by all practitioners, whether or not they are already familiar with the ISAs. Volume 1 covers the basic 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.

The updated ISA Guide can be downloaded free of charge from the SMP Publications and Resources area of the IFAC website. Filter by language to find translations of previous editions of the guide, which were conducted by member bodies and other organizations. Visit the Small and Medium Practices pages for access to additional relevant resources from IFAC and others (see Relevant Links—Implementation Resources). For access to the clarified ISAs, see the IAASB Clarity Center.

About the SMP Committee
The SMP Committee of the International Federation of Accountants represents the interests of professional accountants operating in small- and medium-sized practices and other professional accountants who provide services to small- and medium-sized entities (SMEs). The committee develops guidance and tools, and works to ensure the needs of the SMP and SME sectors 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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce. 

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Good morning everyone. I am truly delighted to be in Cape Town. Before I begin, let me first express my appreciation to CIMA for inviting me to speak here today.

I will be speaking to you this morning about the role of the professional accountant, specifically the professional accountant in business (PAIB) in the context of sustainable organizational success. Worldwide, more than one million professional accountants work in commerce, industry, financial services, education, and the public and private sectors, many in leadership and managerial roles. These professional accountants in business, or management accountants, are in a key position to affect the long-term sustainable value of their organizations.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries, applauds Europe’s focus on resolving the current financial crisis. However, IFAC warns that—in addition to addressing the symptoms—the underlying causes must also be addressed, by reforming governments’ substandard financial management practices. 

The situation in Greece is only the tip of the iceberg. Substandard accounting, auditing, and financial management led eventually to financial reporting fraud by the Greek Government, and ultimately triggered a market reaction that revealed much more widespread financial fragility in the European public sector, evidenced by the need for bail-outs and increased debt servicing costs. In Germany, the government recently disclosed an accounting error equivalent to 2.6% of GDP. To put the size of that error in context, the cost of Japan’s earthquake and tsunami in early 2011 was equivalent to approximately 5% of GDP. That this error was not obvious to Germany’s Ministry of Finance is indicative of the general state of government financial management. A similar, though smaller, error reported in the Irish Government’s financial statements this week corroborates this negative assessment of the state of public sector financial management.

Fiscal mismanagement in the public sector is not isolated to Europe; it is a global problem. At the core, it stems from political shortsightedness and the inadequate systems that governments use to manage public finances, in particular the use of cash-based accounts in a highly complex financial world.

“The fact that most governments in the developed world pretend they can manage and control their finances using only cash information tells us that something is seriously wrong,” said Ian Ball, IFAC chief executive officer. "The cash-based information commonly used for budgeting and accounting is both simplistic and anachronistic, and doesn’t come close to accurately describing the complexity of their financial positions. It is a virtual guarantee of financial mismanagement.”

“If we asked a typical household to prepare a balance sheet they would include all of their assets and liabilities—including their house and car, loans, mortgages, etc.—not just their cash. If governments ran their health systems without using available modern medical information and technology, they would be held negligent. Yet, in essence, this is what governments do in their financial management. It is easier for them to operate this way, but it is potentially fatal to economic growth and financial stability,” added Göran Tidström, IFAC president.

As early as 2007, IFAC stated that it “is concerned that the standards and regulations governing sovereign issuers are not of sufficient quality to protect investors and ensure the stability of capital markets.” In 2011, the consequences of poor financial management in the public sector are all too apparent.  Consistent with its recent submission to the G-20, IFAC calls for urgent research and action to address this critical, but neglected, component of the international financial system.

IFAC recommends that work should be conducted or commissioned by the Financial Stability Board (FSB), to consider the nature of institutional changes that are needed in public sector financial management to facilitate greater transparency and accountability and to protect the public and investors in government bonds. IFAC believes the FSB should examine reformed fiscal arrangements which include:

• Audited financial statements within six months of year end;
• Budgeting, appropriations, and reporting on the accrual basis;
• Full transparency in fiscal positions ahead of general elections, ensuring that voting is fully informed;
• Independent, audited projections of fiscal position to accompany budgets; and
• Limitations on deficit spending, or at least full transparency around the reasons for deficit spending and explanations of how, over an economic cycle, fiscal balance will be restored.

In calling for financial management reform in governments, IFAC stands willing to assist the FSB or other relevant authorities in bringing about such change.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce. 

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The International Public Sector Accounting Standards Board (IPSASB) has approved a landmark new standard, IPSAS 32, Service Concession Arrangements: Grantor (IPSAS 32).

Service concession arrangements provide a way for governments and other public sector entities to build the infrastructure necessary to maintain and improve critical public services. The use of service concession arrangements continues to increase due to the ongoing global financial and economic crises. Until now, public sector entities have had no international guidance on how to report such transactions.

IPSASB Chair Andreas Bergmann explained, “IPSAS 32 helps further the IPSASB’s goal of enhancing the transparency and accountability of public sector entities by ensuring that service concession arrangement assets and their related financing are reported. It also improves consistency in how public sector entities account for and report service concession arrangements, which are significant and often complex transactions.”

IPSAS 32 addresses the grantor’s accounting in such arrangements using an approach that is consistent with that used for the operator’s accounting in Interpretation (IFRIC) 12, Service Concession Arrangements issued by the International Financial Interpretations Committee of the International Accounting Standards Board (IASB). IPSAS 32 is not a convergence project because IFRIC 12 applies only to the operator and not the grantor. However, IPSAS 32 uses the principles in IFRIC 12 for determining which entity—the grantor or the operator—should recognize an asset in a service concession arrangement, in order to ensure that the grantor recognizes a service concession asset it controls.

Hans Hoogervorst, International Accounting Standards Board (IASB) Chair said, “The IPSASB’s approval of IPSAS 32 illustrates the close cooperation of the IPSASB and the IASB on issues of mutual concern in the public and private sectors. It closes the gap on significant assets not being recognized by either the grantor or the operator, and is a welcome addition to the body of accounting guidance for the public sector.”

The IPSASB has also published Improvements to IPSASs 2011. The IPSASB’s improvements project is modeled on the IASB’s annual update program. Improvements are made to existing IPSASs to maintain alignment with International Financial Reporting Standards (IFRSs), as well as other general improvements. The 2011 amendments relate primarily to improving consistency between the standards. They do not represent substantive revisions to existing IPSASs.

IPSAS 32 and Improvements to IPSASs 2011 are available to download free of charge from the IPSASB website. The IPSASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to members and employees.

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.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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These Improvements to International Public Sector Accounting Standards were prepared by the International Public Sector Accounting Standards Board (IPSASB).

(New York/October 26, 2011) – Burden of regulation continues to challenge both accountants and their small business clients, according to the small- and medium-sized accountancy practitioners polled by the International Federation of Accountants in August–September. Despite these challenges, overall optimism increased since the last SMP Quick Poll was conducted; nearly 40% of practitioners expect business to be better this year than it was last year, compared to just 23% in April. 

While more small practices are now offering business advisory services, the poll results showed that traditional accountancy-based services continue to generate the largest portion of SMPs’ fee revenue: accounting and compilation averaged 38% of total fee revenue, with audit and assurance close behind with an average of 35%. Accounting and compilation is also the fastest growing source of revenue for the largest group of respondents (34%), followed by audit and assurance (26%).

There are challenges to expanding into business advisory, which may explain why only 23% of respondents indicated that this area is their fastest growing source of revenue. According to respondents, insufficient partner time (30%) and marketing services to clients (29%) are the biggest challenges to expansion in this area. New advisory/consulting clients are driven primarily by existing customer-client relationships (37%), followed by practitioners’ competence and expertise (21%). When asked to indicate how fee revenue is split among the various areas of advisory/consulting, tax consulting came out highest with an average of 45% of consulting fee revenue.

With the aim of taking a snapshot of the key issues confronted by SMPs and their SME clients, the IFAC SMP Quick Poll is being conducted quarterly throughout 2011 with distribution via the SMP eNews, IFAC’s free newsletter for SMPs, and support from our member bodies. The third SMP Quick Poll collected 798 responses from all regions of the world over a 32-day period (August 8, 2011 to September 9, 2011). To subscribe to the SMP eNews, and participate in our next poll, sign up here.

IFAC wishes to thank those member bodies and regional organizations that published the poll in their newsletters, or otherwise helped promote it. The full survey results are available here.

About the SMP Committee
The SMP Committee of the International Federation of Accountants represents the interests of professional accountants operating in small- and medium-sized practices and other professional accountants who provide services to small- and medium-sized entities (SMEs). The committee develops guidance and tools, and works to ensure the needs of the SMP and SME sectors 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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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