Video presentation (approx 11 min)

Video presentation (approx 14 min)

The International Auditing and Assurance Standards Board (IAASB) today released a progress report on its project to monitor the implementation of its clarified ISAs. The report—Implementation of the Clarified International Standards on Auditing (ISAs)—highlights key findings from the first phase of the IAASB’s initiative to develop a process for gathering information to help it evaluate the effective and consistent implementation of the clarified ISAs. Following completion of the Clarity Project,* the first phase of this IAASB initiative has focused on learning more about early implementation experiences.

“Effective implementation is key to realizing the full benefits of the clarified ISAs,” said Prof. Arnold Schilder, Chairman of the IAASB. “With extensive implementation efforts now underway around the world, it is important for the IAASB to obtain timely feedback on the clarified ISAs from a variety of key stakeholders. The information we gather from this first phase and subsequent efforts of our monitoring project will help the IAASB continue to meet its objective of developing high-quality ISAs.

To promote awareness and understanding of the clarified ISAs, the IAASB also has released a second series of ISA modules,** focusing on some of the new and more significantly revised ISAs. These modules cover ISAs that address materiality in planning and performing an audit of financial statements, the evaluation of identified misstatements, written representations, using the work of an auditor’s expert, and auditor reporting.

As further support for ISA implementation, IAASB staff has released Auditor Considerations Regarding Significant Unusual or Highly Complex Transactions, a questions-and-answers (Q&A) publication. The Q&A highlights considerations in the ISAs that are relevant to auditing such transactions, often an area that gives rise to risks of material misstatement of the financial statements.

“These new resources will assist people responsible for adopting and implementing the clarified ISAs and, in particular, auditors as they prepare for the upcoming audit season,” explained IAASB Technical Director James Gunn. He added, “This additional support underscores the IAASB’s commitment to facilitating effective implementation of the ISAs and, ultimately, to enhancing audit quality.”

The new ISA modules are available to download free of charge from the IAASB Clarity Center on the IAASB’s website (www.iaasb.org/clarity-center). The IAASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to their members and employees.

About the IAASB
The IAASB (www.iaasb.org) 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 (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. It is comprised of 159 members and associates in 124 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Notes to Editor:

* The Clarity Project, completed by the IAASB in March 2009, resulted in the issuance of 36 ISAs and one International Standard on Quality Control in a new style that is easier to understand, translate, and implement. Approximately half of the ISAs also contain substantive new requirements intended to improve practice in a variety of respects. The new set of clarified ISAs is now in effect for 2010 year-end audits.

** Developed by IAASB staff, each of the ISA modules combines short video presentations, accompanying slides, and supporting notes that explain the key principles of, and major changes in, individual ISAs.

Accountancy leaders from around the world met in Geneva on October 12 to discuss next steps for global corporate governance reforms. With an eye to helping prevent future financial crises, they collectively supported the following points:

• The accountancy profession has a key role to play in strengthening corporate governance and facilitating the integration of governance and sustainability into the strategy, operations, and reporting of an organization.
• Boards should be focused on the long-term sustainability of their businesses. As such, corporate governance reform must include strengthening board oversight of management, positioning risk management as a key board responsibility, and encouraging remuneration practices that balance risk and long-term (social, environmental, and economic) performance criteria.
• Governance is more than having the right structures, regulation and principles in place—it is about ensuring that the right behaviors and processes are in place.
• Governance mechanisms need to be strengthened at banks and other companies to ensure better oversight of risk management and executive compensation.
• More dialogue is needed between policy makers, the accounting profession, and other financial industries to consider how we can work together effectively on a global level.

The conference, hosted by the International Federation of Accountants (IFAC) and the United Nations Conference on Trade and Development (UNCTAD), took place at the United Nations Office in Geneva, Switzerland.

Professor Mervyn King, author of the King Code on Corporate Governance, was the keynote speaker. Participants from more than 50 countries were on hand to address key questions including: What lessons has the financial crisis revealed about corporate governance? What corporate governance reforms should be developed on a global basis? And what role should the accountancy profession play?

“Professional accountants can serve as a critical link to ensure that good corporate governance is practiced,” said IFAC President Robert L. Bunting. “Accountants provide strategic direction to boards and governing bodies, aiming to ensure that risks are managed appropriately and resources are used responsibly—all key processes for facilitating sound corporate governance.”

The IFAC/UNCTAD conference was designed to allow professional accountants, corporate governance experts, and other participants to challenge current practices, exchange views on essential elements of corporate governance, and discuss best practices that will improve the current and future business and economic climate.

Mervyn King, professor at the University of South Africa, who specializes in corporate citizenship, said: “Our businesses impact society, the economy, and the environment. We are no longer distant bystanders of these organizations, but we are the stakeholders, because business impacts our society, environment, and economy.”

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 159 members and associates in 124 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the United Nations Conference on Trade and Development (UNCTAD)

UNCTAD is the focal point of the United Nations for the integrated treatment of investment and enterprise development. Since its founding in 1964, UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development. UNCTAD is the host for the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). For more than 25 years, ISAR has been the focal point within the UN system for issues of corporate transparency and accounting. Through ISAR, UNCTAD works to promote international best practices in financial reporting and corporate governance disclosure and to assist developing countries to build their technical capacity in this area.

This comprehensive implementation guide is intended to help practitioners understand and efficiently apply the clarified International Standards on Auditing (ISAs) to audits of small- and medium-sized entities (SMEs). First issued in 2007 and developed with the Canadian Institute of Chartered Accountants, it is designed for use by all practitioners. Volume 1 covers the basic concepts of a risk-based audit in conformance with the ISAs.

This guide provides guidance to small- and medium-sized practices on how to better manage their practice and ultimately operate in a safe, profitable, and professional manner. The publication includes practice management principles and best practices on a comprehensive range of topics, including strategic planning, managing staff, client relationship management, and succession planning. It features case studies to illustrate the concepts, checklists and forms, a list of further readings, and modules that may be used for training and education.

This IAASB Staff Q&A highlights the growing interest in, and use of, XBRL and raises awareness about how XBRL-tagged data is prepared and how it may affect financial reporting. It also clarifies that the IAASB's auditing pronouncements do not impose requirements on auditors with respect to XBRL-tagged data or the representation of this data.

As the world turns its attention to the Copenhagen talks later this year for a successor to the Kyoto Protocol on reining in carbon emissions and other greenhouse gases (GHG), the International Auditing and Assurance Standards Board (IAASB) is making significant progress to develop a new assurance standard on GHG statements. Today, the IAASB released a Consultation Paper seeking views on key issues in developing that standard.

"Having reliable information is key to global efforts to reduce emissions and stabilize the level of carbon in the atmosphere," emphasizes Arnold Schilder, IAASB Chairman. "We are actively seeking to enhance the credibility of GHG information because of the importance to the public interest of decisions being made on the basis of that information. Our consultation will help inform the development of a robust standard in support of this goal."

"A growing number of countries are developing, or have developed, carbon emissions trading schemes under which public reporting of information about emissions inventories, and assurance thereon, has economic, political, and social significance," explains James Gunn, IAASB Technical Director, adding, "The IAASB's project seeks to enhance the consistency and quality of performance by practitioners on assurance engagements to report on this information, whether produced for regulators, legislators, investors, or other interested parties."

Entitled Assurance on a Greenhouse Gas Statement, the Consultation Paper asks a series of questions addressing such matters as: the form of assurance report that users would find most useful; the nature and extent of requirements; how a standard should best integrate with regulatory requirements; and technical aspects of applying the assurance process to GHG emissions. The IAASB intends to use the feedback from the consultation to develop an exposure draft of a proposed new assurance standard on GHG statements for release in 2010.

All stakeholders are encouraged to respond to the Consultation Paper, either in its entirety or to select questions that are of special interest to them.

How to Comment
Comments on the Consultation Paper are requested by February 19, 2010. The Consultation Paper may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to edcomments@ifac.org. They can also be faxed to the attention of the IAASB Technical Director at +1 (212) 856-9420 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About the IAASB and IFAC
The IAASB (www.ifac.org/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.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.