The International Federation of Accountants (IFAC), the global organization for the accountancy profession, welcomes the announcement by the International Financial Reporting Standards (IFRS) Foundation of the membership of the newly-created SME Implementation Group (SME IG). IFAC is pleased to note the appointment to the SME IG of two of its nominees—Robin Jarvis and Ricardo Rodil.

The group’s mission is to support the adoption and implementation of the IFRS for Small and Medium-sized Entities (IFRS for SMEs) around the world. As such, it will develop non-mandatory guidance for implementing the IFRS for SMEs in the form of questions and answers that will be made publicly available on a timely basis and make recommendations to the International Accounting Standards Board if and when needed regarding amendments to the IFRS for SMEs. The members of the group will serve a renewable term of two years from July 2010. The full list of members is available here.

“We are gratified that two of our nominees were selected to join the SME IG,” said Ian Ball, CEO of IFAC. “Both small- and medium-sized practices (SMPs) and SMEs are vital parts of the global economy. IFAC provides support to SMPs, in collaboration with our member bodies, so that they can provide high-quality services to their SME clients. We also support professional accountants in business, many of whom work in SMEs and will use the IFRS for SMEs. Providing input into international standard-setting—including auditing and assurance, ethics, and accounting standards— to help ensure that they are relevant to SMPs and SMEs is a key part of our work. Robin and Ricardo will help the SME IG fulfill its mandate by bringing invaluable insights from their professional experience, along with that drawn from their experience with IFAC’s Small and Medium Practices Committee.”

For more information about IFAC’s Small and Medium Practices Committee, see www.ifac.org/smp.

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

The Prince’s Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) announced today the formation of the International Integrated Reporting Committee (IIRC). The IIRC brings together a cross section of representatives from the corporate, accounting, securities, regulatory, NGO, and standard-setting sectors. Ian Ball, CEO of IFAC, will serve as co-chairman of the Working Group.

The objective of the IIRC is to create a globally accepted framework for accounting for sustainability that brings together financial, environmental, social, and governance information in a clear, concise, consistent, and comparable format. The intention is to help with the development of more comprehensive and comprehensible information about an organization’s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model.

Please see the attached press release issued and briefing notes. For further information regarding the IIRC, please see www.integratedreporting.org.

The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today issued the second edition of its Guide to Quality Control for Small- and Medium-Sized Practices (QC Guide) The implementation guide is intended to help SMPs understand and efficiently apply the redrafted International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements.

The first edition of the QC Guide was issued in March 2009 and went on to become IFAC’s second most downloaded publication after the Handbook of International Auditing, Assurance, and Ethics Pronouncements last year. The new edition conforms to the revised and redrafted Code of Ethics for Professional Accountants and includes various improvements based on feedback from users of the first edition. It features an integrated case study, practical checklists and forms, and two sample quality control manuals.

IFAC wishes to thank the Certified General Accountants Association of Canada (CGA-Canada) for producing the QC Guide for free and the global panel of reviewers for volunteering their time and effort to helping with its development.

“This guide will help SMPs to cost effectively implement ISQC 1 and ensure that they can provide high-quality assurance and related services to their clients,” said SMP Committee Chair Sylvie Voghel.

The PDF version of the QC Guide can be downloaded from the Publications and Resources section of the IFAC website. In addition, CGA-Canada is currently working on developing a French translation of the QC Guide. It will be available on the Translations Database of the IFAC website in September.

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 more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today issued the Guide to Practice Management for Small- and Medium-sized Practices, which provides guidance on how this sector can better manage their practices 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. The guide was developed with CPA Australia, which was commissioned by the SMP Committee.

“This guide will help SMPs cope with an increasingly complex and competitive environment by providing them with information to help them operate with greater proficiency and professionalism,” said SMP Committee Chair Sylvie Voghel.

IFAC wishes to thank its member bodies—Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and Certified General Accountants' Association of Canada—for providing some of the funding for the publication, as well as the international panel of experts who helped in its development.

The PDF print version of the guide can be downloaded free of charge from the Publications and Resources section of the IFAC website. A fully interactive version with internal links to aid navigation will be available in the coming weeks.

The IFAC SMP Committee welcomes readers to visit its International Center for Small and Medium Practices, which hosts a collection of relevant links to free resources from IFAC member bodies and other organizations, including a category devoted to practice management, and the SMP/SME Discussion Board, where readers may submit their views on practice management issues.

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 more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

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.

In a letter issued this week, the International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in more than 120 countries, calls for broad and swift action by the G-20 leaders at their June 26-27 meeting in Toronto, Canada, to greatly improve government transparency and accountability as a means toward global fiscal sustainability.

“Governments require that private sector companies report high-quality financial information to their investors and stakeholders. It’s time for the public sector to practice what it preaches,” said Ian Ball, CEO of IFAC. “The problems associated with public finance and government debt require a coordinated, international approach that global leaders have been slow to address. Sovereign debt concerns in European countries illustrate the stark implications and urgency of this issue – confidence in sovereign debt has been seriously damaged by accounting and auditing failures. These failures have occurred not only on the national level but also on the regional, state and local levels.” 

Taxpayers, investors and citizens in all nations are entitled to accurate and complete financial information about their governments, according to IFAC. They should demand that their governments provide a comprehensive picture of fiscal performance and position. This includes an accrual-based measure of surplus or deficit as well as full details of debt, other liabilities, contingent liabilities and guarantees, and future expenditures and the resources needed to support them.

IFAC’s letter contains several specific, actionable recommendations, including:

The G20 Should Encourage Governments to Adopt Accrual-Based Accounting 

Cash basis accounting, which is employed by governments in some of the world’s largest and most interconnected economies, lacks transparency and accountability. It does not measure many of the assets and liabilities necessary to assess fiscal policy and fiscal sustainability. Governments should instead adopt accrual-based accounting, which is required of public companies in all countries. This would provide a much better indication of all of a government’s liabilities, significantly improve the quality of financial management, and provide better information for all stakeholders.

“Despite the clear benefits of accrual-based accounting – and the fact that governments require it for public companies – many governments continue to use cash accounting,” continued Mr. Ball. “Politicians often criticize businesses for being focused on short term financial results, but the typical public sector financial report does not adequately reflect all assets and liabilities, some of which have significant long term financial implications. Indeed, many countries have substantial civil service pension liabilities that are not reflected in their financial reports at all. Accrual accounting will compel governments to take a longer term view and be honest with citizens about how today’s decisions will need to be paid for by future generations.”

Improve Transparency and Accountability of Stimulus Programs and Bailouts
The global financial crisis has forced governments to act quickly to alleviate the collapse of financial markets and prevent problems from spreading from one country to the next. Many governments have launched unprecedented stimulus programs, to provide jobs, economic activity and long-term investment in domestic industries, and bailout plans, to provide monies for banks, purchase “toxic” assets, and modify loans for mortgage-holders. These actions will result in new assets, liabilities, and contingent liabilities being assumed by governments, all of which have long-term economic implications.

These stimulus and bailout programs must have mechanisms for clear, comprehensive financial reporting so that their actual and intended outcomes can be understood by investors, taxpayers and other stakeholders, are measurable, and restore confidence in government fiscal transparency. These mechanisms will also help prevent inefficiency, mismanagement and corruption.

Adopt International Standards to Improve the Quality of Financial Information
Global accounting and auditing standards for both the public and private sectors will improve the quality of financial information around the world and make it more consistent. This, in turn, will facilitate the comparability of financial information, create a more level playing field for global investors, facilitate cross-border investment flows, and enhance economic and financial stability.

“We urge the individual G-20 governments to adopt and implement common global standards for public sector accounting – as well as for auditing, auditor independence and private sector accounting –as a demonstration of their leadership on these global issues,” Mr. Ball said.

Importantly, public sector accounting standards will provide better information regarding systemic risks associated with government debt and liabilities. While the use of international standards would not necessarily have helped avoid the current crisis, the financial information from such standards would help public officials and other groups assess the implications of governments’ fiscal decisions, and could have mitigated the current crisis and help prevent future crises.

“It is critical for taxpayers, investors and the general public to understand the full impact of decisions made by governments with respect to their financial performance, financial position and cash flows,” concluded Mr. Ball. “As the stewards of taxpayer funds, governments must be accountable for and transparent about the financial impact of their decisions on this and future generations. Anything less is a serious violation of the public trust.”

The letter to the G20 with the full recommendations is posted on the IFAC website (www.ifac.org/financial-crisis).

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

First may I say what a great pleasure it is to present on the work of the committee that I chair here in my home country. Today I will share with what the committee is doing, and plans to do, to support the SMP constituency--and in turn assist small- and medium-sized entities (SMEs). I will conclude this presentation with a look into the future in particular, the committee’s role in implementing the recommendations. 

IFAC today released for comment an exposure draft (ED) setting out its proposed 2010-2012 strategy and work plan prepared by its Professional Accountants in Business (PAIB) Committee.

The proposed plan outlines the direction and priorities of IFAC's services relevant to professional accountants in business. This public consultation is a first-time opportunity for IFAC member bodies and other key stakeholders to comment on the proposed vision, strategic direction, and corresponding work plan for this key constituency.

The proposed strategic direction focuses on enhancing the profile, influence, and relevance of professional accountants in business and identifies two specific objectives:

1. Increasing awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and
2. Supporting the professional accountants in business within IFAC member bodies by facilitating the communication and sharing of good practices and ideas.

"Well over half of the total number of professional accountants is within enterprises, and these professional accountants in business play a wide range of roles," said PAIB Committee Chair Roger Tabor. "The proposed strategic direction provides a basis for IFAC to determine how best to serve this large, diverse constituency at a global level."

How to Comment
To access the exposure draft or submit a comment, please visit www.ifac.org/PAIB/ExposureDrafts.php. Comments on the exposure draft are requested by July 14, 2010.

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

The International Federation of Accountants (IFAC) and The Prince's Accounting for Sustainability (A4S) Project have entered into a memorandum of understanding to support the global accountancy profession's role in developing sustainable organizations.

Organizations are increasingly seeking new ways to maintain their economic performance and contributions to society in the face of challenge and crisis. Perhaps the most critical challenge facing business and society generally is to live within our ecological limits, while continuing to enjoy economic prosperity. IFAC and A4S believe that an essential part of the answer lies in going beyond traditional ways of thinking about performance and embedding sustainability into strategy, governance, performance management, and reporting processes.

Key priorities to support the work of professional accountants in embedding sustainable practices include:

• Raising awareness and facilitating sharing and collaboration across the global accountancy community, for example, through the development of a community website for professional accountancy organizations, business leaders, academics, and other experts to exchange ideas and share good sustainability practice;
• Establishing an international integrated reporting committee to develop a new reporting model that will better reflect the interconnected impact of financial, environmental, social, and governance factors on the long-term performance and condition of an organization; and
• Incorporating accounting for sustainability within professional training and education.

Professional accountants in organizations support the sustainability efforts of the organizations they work for in leadership roles in strategy, governance, performance management, and reporting processes. They also oversee, measure, control, and communicate the long-term sustainable value creation of their organizations.

Paul Druckman, Chairman of the A4S Executive Board, states, "We will only be able to achieve a sustainable future if all organizations, and all individuals within those organizations, recognize the role that they can and need to play. Effective action by the accounting and finance community to better account for sustainability is an essential part of the response. The collaboration between IFAC and A4S will help to make this a reality."

"Professional accountants play a vital role in helping to create sustainable organizations and markets, especially in the areas of accountability and measurement of results," says Robert Bunting, President of IFAC. "I am delighted that our two organizations are working together to advance the role of sustainability leadership and reporting at a global level, fostering collaboration with key stakeholders and developing best practices for integrating sustainability issues in the way we do business."

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

About the A4S Project
The Prince's Accounting for Sustainability Project works with businesses, investors, the public sector, accounting bodies, NGOs and academics to develop practical guidance and tools for embedding sustainability into decision-making and reporting processes. To date, the project has involved the collaboration of more than one hundred and fifty public and private sector organizations.