The Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities (the Conceptual Framework) provides the International Public Sector Accounting Standards Board® (IPSASB®) with the concepts that underpin the development of International Public Sector Accounting Standards® (IPSASs®) and Recommended Practice Guidelines (RPGs).

The Public Interest Oversight Board’s (PIOB) Standard-Setting Boards Nominations Committee has opened the Invitation for Application for upcoming vacancies on the International Ethics Standards Board for Accountants (IESBA) for terms beginning January 1, 2025. The application period is open until February 9, 2024.

The Invitation for Application is extended to experienced individuals from diverse backgrounds wishing to contribute to setting high-quality, international ethics (including independence) standards on behalf of the public interest. In the current cycle, there are six vacancies to be filled from January 1, 2025, including potential re-appointments of five members. Applications are welcome from candidates from all sectors and constituencies, including investors, the corporate governance community, regulatory, oversight and policy-making bodies, national standard setters, preparers and practitioners, professional accountancy organizations, public and non-profit sectors, and academia. A parallel Invitation for Application was issued for the International Auditing and Assurance Standards Board (IAASB), with a concurrent deadline of February 9, 2024.

These openings offer seasoned professionals from diverse backgrounds a chance to actively shape the IESBA's dynamic, multi-stakeholder environment. Successful candidates will play pivotal roles in maintaining the integrity of global financial markets and economies by contributing to the development of robust ethics (including independence) standards.

For additional information on IESBA or IAASB nominations, please see the PIOB’s nominations web page or email SSBNominations@ipiob.org.

The IPSASB held its final meeting of the year from December 5-8 in Toronto, Canada.

Who is the Monitoring Group?

The Monitoring Group (MG) is a group of international financial institutions and regulatory bodies committed to advancing the public interest in areas related to international audit standard setting and audit quality. The MG is responsible for the overall governance of the international audit and ethics standard-setting system, including conducting periodic effectiveness reviews.

In July 2020, the MG issued its recommendations, Strengthening the International Audit and Ethics Standard Setting System (Recommendations, MG Recommendations, or MG Reforms).

What sparked the MG’s most recent review of the international standard-setting system?

Approximately every five years since 2003, the MG has conducted an effectiveness review and made recommendations to improve the independent ethics and audit standard-setting system. Most reviews and recommendations were incremental changes and enhancements that were agreed to and enacted.

Starting in May 2015, the MG signaled its upcoming recommendations would be much more significant, including proposing a model that would include establishing a separate body to house the International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA). After a few years of discussions with the MG, the accountancy profession, and other stakeholders and revisions to the initial proposals, a set of Recommendations was agreed to and transition and implementation began in 2021.

What are the objectives of the MG’s Recommendations?

The objectives of the Recommendations are implementing an independent and inclusive multi-stakeholder standard-setting structure that is responsive to the public interest in developing timely, high-quality ethics, independence, audit, and assurance standards. The objectives also specifically included:

• • Reinforcing the consideration of the public interest within the standard-setting process and throughout the full cycle of standards’ development, including through appropriate independent oversight; and
  • Fostering the development of timely, high-quality standards that respond to an accelerating pace of change.

The MG, Public Interest Oversight Board (PIOB), IAASB and IESBA and the International Federation of Accountants (IFAC) have worked collaboratively to faithfully implement the MG Recommendations.

To limit the disruption to the IAASB and IESBA as they execute their strategic priorities and work plans, including developing assurance, ethics, and independence standards in relation to sustainability reporting, appropriately sequencing implementation steps has been of utmost importance.

What is the International Foundation for Ethics and Audit and why was it established?

The International Foundation for Ethics and Audit (IFEA or the Foundation) is a nonprofit organization that supports high-quality, international standard setting in ethics, audit, and assurance in the public interest. It was created at the end of 2022 to ensure the full implementation of a key MG Recommendation: housing the IAASB and the IESBA and reinforcing their independence based on a new governance structure.

Why was a new legal entity needed to house the IAASB and IESBA? Weren’t these Boards already independent standard setters?

While the IAASB and IESBA have conducted an independent standard-setting process since 2003, the new reforms and governance structure are intended to reinforce their independence through a legal structure, and a nominating process under the PIOB, that is independent and separate from the accountancy profession.

What are the membership and governance arrangements for the Foundation?

The Foundation is a US-based nonprofit organization with three members: the MG, PIOB, and IFAC. The members appoint a Board of Trustees to govern the Foundation. Four Trustees are nominated by the PIOB and two by IFAC, and one of the PIOB-nominated Trustees serves as the Chair. The MG also appoints an observer. The Chairs of the IAASB and the IESBA serve as the co-CEOs of the Foundation.

Where will IAASB and IESBA be based, and what administrative arrangements exist?

The Boards will continue to be based in New York at the IFAC offices. IFAC continues to provide administrative support for the Foundation and the Boards under a service level agreement between IFAC and the Foundation’s Board of Trustees.

Who funds the Foundation, and IAASB and IESBA?

Currently, the Foundation’s funding comes primarily from the accountancy profession and is overseen by the independent Foundation Board of Trustees. IFAC has made a three-year rolling financial commitment to using a portion of its member organization dues revenue and Forum of Firms contributions. The Foundation also receives targeted funding from the Global Public Policy Committee, the six largest global accounting networks, to support the initial costs of expanding IAASB’s and IESBA’s technical staff and to support launching the new legal entity. This funding commitment is important to the success of the continued implementation efforts as it promotes stability and minimizes disruption to the Boards’ work plans.

The MG and the PIOB continue to work to secure sustainable, long-term, multi-stakeholder funding to provide sustainable financial support for the MG Reforms, especially as the Boards progress their important work on assurance over sustainability reporting. The MG has renewed its call to all stakeholders in the financial reporting ecosystem who benefit from a single set of independent, high-quality, international ethics, independence, audit, and assurance standards to support the stability of the standard-setting system through financial contributions.

What do the changes mean for the IAASB and the IESBA and their current projects?

There are no changes to either Board’s strategy, work plan or current projects resulting from the Boards being housed under the Foundation.

Each Board will have an updated Terms of Reference to reflect the new structure. In 2024, a new, combined Stakeholder Advisory Council will replace the current IAASB and IESBA Consultative Advisory Groups.

What do the changes mean for the role of the PIOB?

The PIOB’s independent public interest oversight role for IAASB’s and IESBA’s work has not changed. However, consistent with the MG’s Recommendations. the oversight model has evolved to be more interactive and transparent. This includes regular interactions with the Boards at both the chair and staff level as standards are developed. PIOB observers continue to attend IAASB and IESBA meetings but their observation reports will now be publicly available. The PIOB’s quarterly meetings, including its interactions with the IAASB and IESBA chairs, will also now be in public.

How will the IAASB and IESBA membership process and membership change?

Following the MG Reforms, nominations are now conducted by the PIOB Standard-Setting Board Nominations Committee, Members are now nominated through an open call and appointed by the PIOB according to a skills matrix. The skills matrix prioritizes public leadership responsibilities, expertise, and diversity of thought and geography. The multi-stakeholder Boards, which will transition from 18-member boards to 16-member boards, will include balanced and diverse members from a variety of backgrounds. For example, this will include investors and other users of financial statements, accountants, regulatory members, audit committee members, accounting or auditing academics, and audit practitioners.

To balance the risk of undue influence by the audit profession with the need for relevant technical expertise in standard setting, no more than five audit practitioners, including those with experience in audits of small- and medium-sized enterprises and public sector organizations, may be appointed to each Board.

Why are IAASB and IESBA recruiting additional staff?

Enhancing the technical expertise of staff to support the envisaged multi-stakeholder, strategic board composition and approach is an important step, one that is now underway. Increasing the size and technical abilities of staff ensures that the technical expertise is available to the IAASB and IESBA, which will allow Board members to take on a more strategic role in line with the MG Recommendations.

Board members are heavily involved in drafting standards, through task forces and other means, and there is a reliance on technical advisors in supporting the technical drafting work. Going forward, once the full staff complement is in place, technical project leadership and detailed drafting will be handled by an expanded staff, both full time staff members and secondments.

Ongoing support from the accounting profession and national standard setters, including through in-kind support, is an important part of ensuring that the Boards are supported by an expanded and enhanced technical staff that has the capacity to develop relevant, timely, high-quality standards in the public interest.

What does this new organization and structure mean for IFAC and the Forum of Firms’ commitments to adopting and implementing IAASB and IESBA standards?

One of IFAC’s strategic objectives, and a primary focus, continues to be supporting adoption and implementation of international standards. Throughout the MG reform discussion and process, adoption and implementation have remained an IFAC priority, and a requirement for its member organizations around the world. Similarly, the Forum of Firms remains committed to supporting the IAASB and IESBA and using their standards.

With the Foundation’s launch, who should stakeholders now send inquiries about intellectual property or translation and reproduction requests for IAASB and IESBA standards and guidance?

Through intellectual property and service level agreements, IFAC will continue to have intellectual property rights and manage translation and reproduction requests. For permission to reproduce or translate the IAASB’s and IESBA’s international standards or for information about intellectual property matters, please visit Permissions. 

The Board of Trustees of the International Foundation for Ethics and Audit (IFEA, or the Foundation) celebrates the launch of the Foundation, which implements a key recommendation contemplated in the Monitoring Group’s July 2020 Recommendations, Strengthening the International Audit and Ethics Standard-Setting System.

The objective in establishing the Foundation is to move the International Ethics Standards Board for Accountants (IESBA) and the International Auditing and Assurance Standards Board (IAASB) to a new entity that is independent of the International Federation of Accountants (IFAC).

Under the new structure, IESBA Chair Ms. Gabriela Figueiredo Dias and IAASB Chair Mr. Tom Seidenstein serve as Co-CEOs of the Foundation. The Public Interest Oversight Board (PIOB) continues its role as an independent oversight board, supporting the public interest responsiveness of the international standards and the effective delivery of the boards’ strategies.

“Establishing the Foundation as an independent legal entity to house the IESBA and IAASB, which were previously within the IFAC structure, is an important step in strengthening the independence of the international standard-setting system for ethics, audit and assurance,” said Robert Buchanan, Chair Trustee of the Foundation.

“We are confident that the revised structure—with IFEA as the home of the standard-setting boards governed by a board of trustees that includes both PIOB and IFAC appointed trustees—is an important mechanism created by the Monitoring Group to reform with the profession and simultaneously enhance the independence of the standard-setting boards,” said Linda de Beer, Chair of the PIOB. “This, in conjunction with an independent nominations process housed within the PIOB through the PIOB Standard Setting Boards Nominations Committee, will continue to enhance the trust and confidence in the standard-setting process.”

Paul Munter, Co-Chair of the Monitoring Group, added, “The objectives of the Monitoring Group’s recommendations included achieving an independent and inclusive, multi-stakeholder standard-setting system, and fostering the development of timely, high-quality standards that are responsive to the rapidly changing environment while still being responsive to the public interest. We are confident that the new structure advances both objectives. We are pleased the recommended reforms are on track for full implementation through diligent, collective efforts, and the focus is now on the implementation of the resource and costing plans.”

Commenting on the new structure, Ms. Figueiredo Dias and Mr. Seidenstein stated, “We are delighted with the modernization of the standard-setting system and the progress already achieved under the new Foundation, including transferring board personnel from IFAC to IFEA, the approval of our 2023 budget, and the process to strengthen our technical staff, which is well underway. We welcome the myriad opportunities created by the Foundation’s establishment. As always, we are committed to the delivery of high-quality standards in service of the public interest, and to the faithful implementation of the reforms. We would like to thank IFAC for all its support to date, and for its continued involvement as the Foundation’s service provider.”

Accompanying today’s announcement is the launch of the Foundation’s website at www.ethicsandaudit.org. Stakeholders are encouraged to visit the website to learn more about the Foundation.

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About the Foundation
The International Foundation for Ethics and Audit is a nonprofit organization that supports high-quality, international ethics, audit, and assurance in the public interest. It does so through its two standard-setting boards, the International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants. These boards develop and issue their standards independently and in accordance with an approved due process and the Public Interest Framework, overseen by the Public Interest Oversight Board. 

About the Public Interest Oversight Board
The PIOB is the global independent oversight body that seeks to improve the quality and public interest focus of the international audit, assurance, and ethics standards formulated by the international standard-setting boards: the IAASB and the IESBA. The PIOB’s ultimate goal is to ensure relevant audit, assurance and ethical standards that are responsive to the Public Interest, in order to enhance confidence in capital markets. For more information, please visit the PIOB website.

About the Monitoring Group
The Monitoring Group (MG) is a group of international financial institutions and regulatory bodies committed to advancing the public interest in areas related to international audit related standard-setting and audit quality. Further information can be obtained from the IOSCO website.

Notes to the Editor

• The Foundation’s Board of Trustees are appointed by the Members of the Foundation, comprised of the Monitoring Group, PIOB and IFAC. The Board of Trustees comprises six individuals, four of whom are nominated by the PIOB and two nominated by IFAC.
• IAASB and IESBA work closely together to ensure their standards are interoperable and complement each other. These standards strengthen public confidence in financial markets.
• IAASB and IESBA receive operational support from IFAC in accordance with a service level agreement between IFAC and the Foundation.
• The Monitoring Group and PIOB continue to work to secure sustainable, long-term, multi-stakeholder funding to provide financial support for the Foundation and all Monitoring Group Reforms.

The Public Interest Oversight Board’s (PIOB) Standard-Setting Boards Nominations Committee has opened the Invitation for Application for upcoming vacancies on the International Auditing and Assurance Standards Board (IAASB) for terms beginning January 1, 2025. The application period is open until February 9, 2024.

The Invitation for Application is extended to experienced individuals from diverse backgrounds wishing to contribute to setting international standards for audit, assurance and related areas, all in the service of the public interest. Applications are welcome from representatives from all sectors, including investors, the corporate governance community, regulatory bodies, national standard setters, audit practitioners, professional accountancy organizations, public sector entities, and academia. A parallel Invitation for Application was issued for the International Ethics Standards Board for Accountants, with a concurrent deadline of February 9, 2024.

These vacancies are exciting opportunities for seasoned professionals from diverse backgrounds to actively contribute to the IAASB’s dynamic, multi-stakeholder fabric. Successful candidates will play crucial roles upholding the integrity of global financial markets and economies by contributing to high-quality audit and assurance standards and their adoption.

For additional information on IAASB or IESBA nominations, please see the PIOB’s nominations web page or email SSBNominations@ipiob.org.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing, assurance, related services, and quality management standards and guidance in the public interest that support consistent performance of quality engagements. Along with the International Ethics Standards Board for Accountants, the IAASB is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board oversees IAASB and IESBA activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.