The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has issued Integrating Governance for Sustainable Success, which uses case studies to analyze how professional accountants in business support the performance of their organizations by integrating governance into the key drivers of sustainable organizational success.

“Governance is still too often seen primarily as a compliance exercise rather than a means for driving the sustainable performance of an organization,” said Roger Tabor, chair of the PAIB Committee. “Successful organizations have a governance structure and culture that go beyond conformance with regulations and support the organization’s efforts to improve performance. Governance should be part of the DNA of an organization.”

The new report illustrates that good governance is about more than the basic protection of stakeholders’ interests or compliance designed to satisfy regulatory requirements. Rather, integrating good governance throughout an organization offers powerful support to the way sustainable value is created. The report addresses how professional accountants support their organizations to build good governance into the entire cycle of strategic planning, resource utilization, value creation, accountability, and assurance. Such a holistic approach ensures that governance is integrated into all aspects of an organization.

“Professional accountants are typically in a position of strategic or functional leadership or are otherwise well placed to partner with colleagues in evaluating and improving governance,” said John Cahill, chair of the PAIB Committee’s Governance and Ethics Task Force. “This report usefully demonstrates how they can increase their organizations’ sustainable performance.”

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 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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IFAC submitted this comment letter to Public Expenditure and Financial Accountability (PEFA) on its public consultation for Guidance Note on Sequencing PFM Reforms, specifically on the section that deals with “developing the accounting system.” The comment letter addresses multiple issues, including the importance of robust arrangements for public sector financial management, the use of International Public Sector Accounting Standards, and implementation of public sector financial management reforms.

The International Federation of Accountants (IFAC) and the International Valuation Standards Council (IVSC) have renewed their Memorandum of Understanding (MoU), first signed in 2009.

The MoU creates a cooperation process to enable valuers and auditors to obtain a better mutual understanding of standards relevant to financial statements, and will help both organizations pursue their objective of maintaining confidence in business reporting in both the public and private sectors. Actions under the MoU are also designed to promote the credibility and acceptability of valuations prepared in accordance with the International Valuation Standards.

The MoU reflects the IVSC’s and IFAC’s shared conviction that the transparency provided by high-quality international standards contributes significantly to the effective functioning of capital markets and economic growth.  The MoU acknowledges the ongoing working relationships between the IVSC, IFAC, and the International Auditing and Assurance Standards Board (IAASB), which is supported by IFAC. The MoU also anticipates closer working relationships between IVSC and other IFAC activity groups.

Roel Campos, Interim Chairman of the Board of Trustees for the IVSC, states, “This agreement to renew the earlier Memorandum of Understanding represents an ongoing commitment by both IVSC and IFAC to strengthen cooperation between the two organizations. It demonstrates the cohesive and united approach of the IVSC, IFAC, and its independent standard-setting boards to maintaining standards as global markets continue to develop.”

“The ongoing financial crisis has shown the importance of transparency in financial reporting by both private and public sector entities,” said Göran Tidström, president of IFAC.  “The IVSC has served as a member of the IAASB’s Consultative Advisory Group, and the organizations are both members of the Private Sector Task Force (PSTF). This agreement strengthens the already close ties between the IVSC and IFAC and will serve as a platform for further cooperation.”

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.

About the IVSC
The IVSC is an independent, not-for-profit, private sector organization. As the established international standard setter for valuation, the IVSC develops and maintains standards for the reporting and disclosure of valuations, especially those that will be relied upon by investors and other third party stakeholders. It also supports the need to develop a framework of guidance on best practice for valuations of the various classes of assets and liabilities and for the consistent delivery of the standards by properly trained professionals around the globe.

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Two new signatories were welcomed to MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) this week at the second Steering Committee Meeting held in London, UK, hosted by the Chartered Institute for Public Finance and Accountancy (CIPFA).

The Australian Agency for International Development (AusAID) and Global Fund to Fight AIDS, Tuberculosis, and Malaria have agreed to become a part of this groundbreaking initiative working to strengthen professional accountancy organizations (PAOs), improve financial reporting, management, and auditing in both the public and private sectors, and positively impact economic growth and poverty reduction around the world.

The second meeting of the MOSAIC Steering Committee offered an opportunity for presentation and discussion of the draft PAO Global Development Report. Co-financed by the African Development Bank, the Asian Development Bank, the Inter-American Development Bank, and the World Bank, this report provides MOSAIC signatories and observers with a global view of PAO development; insight into the key trends, challenges, and success factors facing their progress; and a shared starting point to guide future MOSAIC activities. Agenda topics also included potential initial activities for MOSAIC support and coordination and establishment of a permanent MOSAIC Secretariat.

“As MOSAIC grows in strength and number, we are able to see how and where the international development agenda can support PAOs in developing and emerging economies, which, in turn, provides an essential platform for sound financial reporting and economic growth,” said Deborah Williams, co-chair of the MOSAIC Steering Committee and chair of the IFAC PAO Development Committee.

“MOSAIC seeks to support the development of the entirety of the accountancy profession—in both the public and private sectors at the professional accountant and accounting technician levels,” said Tony Hegarty, co-chair of the MOSAIC Steering Committee and chief financial management officer at the World Bank.

MOSAIC was launched in November 2011 by IFAC and 10 signatories from the donor community to increase coordination and provide the foundation for increasing capacity of PAOs.

About MOSAIC
MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration) sets out the basis for improving cooperation and collaboration between IFAC, international donors, and the international development community. It provides the foundation for increasing the capacity of professional accountancy organizations and improving the quality of financial management systems in emerging economies. IFAC, the global organization for the accountancy profession, serves as the Interim Secretariat for MOSAIC.

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More information on MOSAIC is available online.

This report from the Professional Accountants in Business (PAIB) Committee analyzes how professional accountants in business can support their organizations and increase performance by integrating governance into the key drivers of sustainable organizational success. Using case studies from around the world, the report illustrates that good governance is about more than the protection of stakeholders' interests or compliance with regulatory requirements.

The International Federation of Accountants (IFAC) and its member bodies Instituto de Censores Jurados de Cuentas de España, Federación Argentina de Consejos Profesionales de Ciencias Económicas, and Instituto Mexicano de Contadores Públicos formally agreed to establish an Ibero-American cooperation framework to achieve longer-term, sustainable processes for a single, Spanish translation of international standards and other IFAC publications.

The agreement was commemorated with a formal signing ceremony that included the Interamerican Accounting Association, IFAC’s regional organization for Latin America and the Caribbean.

“Taking into account the significance of the Spanish language in relation to global adoption and implementation of international standards, this formal establishment of a cooperation framework is a very important milestone,” said IFAC Chief Executive Officer Ian Ball.

“Working collaboratively we should be able to achieve much more than any one of our organizations could do alone. We believe that this project will be of great benefit to the global accounting and auditing profession and we are extremely grateful for the valuable contributions of our member bodies and our regional organization in this regard,” he added

Earlier this year, IFAC welcomed the single Spanish translation of the Handbook of International Standards on Auditing and Quality Control, issued by the International Auditing and Assurance Standards Board and the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants. Both of these translated publications were a result of the cooperative efforts of the aforementioned groups, in collaboration with other Spanish-speaking IFAC member bodies and key stakeholders.

For more information on Spanish-language or other translations, please visit the IFAC Translations Database.

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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The International Public Sector Accounting Standards Board (IPSASB) today released for comment the Consultation Paper (CP), IPSASs and Government Finance Statistics Reporting Guidelines. The Consultation Paper was developed by a task force that includes representation from both the IPSASB and the statistical community, including international organizations such as the International Monetary Fund and Eurostat, and national representatives from Brazil, the United Kingdom, South Africa, and Switzerland.

The Consultation Paper aims to help reduce differences between Government Finance Statistics (GFS) reporting guidelines and International Public Sector Accounting Standards (IPSASs). It provides an overview of differences between GFS reporting guidelines and IPSASs, and identifies opportunities to reduce these differences for consideration by either the IPSASB or the statistical community.

The Consultation Paper also aims to support governments’ use of integrated financial information systems that can generate both IPSAS financial statements and GFS reports. Using a single integrated financial information system can result in significant benefits, including reduction of GFS report preparation time, costs, and effort. Improvements are also likely to the source data for GFS reports, with flow-on benefits in terms of report quality.

Use of audited financial reporting data prepared on an accrual basis will substantially improve the data used for the preparation of GFS reports and therefore for policy making. The use of high-quality upstream data is a matter of urgency, considering the issues which led to the sovereign debt crisis.

“Both governments’ general purpose financial reports and their financial statistics on the general government sector provide important information about governments’ finances,” said IPSASB Chair Andreas Bergmann. “This Consultation Paper shows that there is further scope to reduce differences between IPSASs and GFS reporting guidelines, with benefits to the users of both types of reports. It also proposes practical ways that governments can improve their management of such differences, so as to efficiently generate data for both their IPSAS financial statements and GFS reports from the same integrated financial information system.”

How to Comment
To access the Consultation Paper and the At-a-Glance document, which provides a summary, or to submit a comment, please visit the IPSASB website. Comments are requested by March 31, 2013. The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this Consultation Paper to their 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. The IPSASB receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the United Nations and the governments of Canada, China, New Zealand, and Switzerland.

 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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The PAIB Committee submitted this comment letter to the International Auditing and Assurance Standards Board (IAASB)'s Invitation to Comment: Improving the Auditor's Report. Comments from the PAIB Committee draw heavily on Integrating the Business Reporting Supply Chain.

In recognition of their shared vision for the evolution of corporate reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) have signed a Memorandum of Understanding (MoU) to promote cooperation, coordination, and alignment.

Integrated Reporting (“<IR>”) is the language for sustainable business. It is the means by which companies communicate how value is created and will be preserved over the short, medium, and long term. This information is used principally by investors to support their capital allocation decisions. It involves processes, one result of which is communication, most visibly through a concise “integrated report,” about the way in which an organization’s strategy, governance, performance, and prospects lead to the creation and preservation of value.

<IR> represents an evolution in corporate reporting, building on recent developments in financial and non-financial reporting. Through this MoU, IFAC and the IIRC recognize the opportunities that exist to work more closely together to promote, support, and contribute to the realization of mutual interests.

“There are inherent synergies between the work of IFAC and the IIRC in support of an internationally accepted framework for integrated reporting,” according to IFAC Chief Executive Officer Ian Ball. “Traditional financial reporting alone is no longer enough information for investors and stakeholders. A more complete picture is needed, and the work of the IIRC will help guide organizations to achieve this.”

Commenting on the signing of the MoU, IIRC Chief Executive Officer Paul Druckman said: “The ability of business to measure and communicate what really matters is an increasing demand of investors and other users of corporate information.  <IR> enables a business to tell its value creation story in a way that gets to the heart of what makes the business tick today and in the future. 

“The accountancy profession globally has a vital role to play in providing confidence in the validity of both the narrative and the numbers that businesses must disclose to secure investment and provide transparency.  This MoU underscores the value that both IFAC and the IIRC place in this continued partnership, and its role in helping to secure an evolution in corporate reporting that supports efficient and productive capital markets, and a more sustainable global economy.”

IFAC, as the global organization for the accountancy profession and representing 167 professional accountancy organizations around the world, has a mandate to speak for the accountancy profession and to facilitate the development and adoption of high-quality, international standards of accounting and auditing as well as serve the public interest.

The IIRC’s mission is to create the globally accepted <IR> Framework that elicits from organizations material information about their strategy, governance, performance and prospects in a clear, concise and comparable format.  The Framework will underpin and accelerate the evolution of corporate reporting, reflecting developments in financial, governance, management commentary and sustainability reporting.  The IIRC will seek to secure the adoption of <IR> by report preparers and gain the recognition of standard setters and investors. Through cooperation, IFAC and IIRC will enhance their respective missions and strategic goals.

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. IFAC President Göran Tidström is a member of the IIRC and IFAC Chief Executive Officer Ian Ball is the chairman of the IIRC’s Working Group. Additionally, IFAC provides staff support for the development of the <IR> Framework.

About IIRC
The IIRC is a global coalition of regulators, investors, companies, standard setters, the accountancy profession and NGOs. Together, this coalition shares the view that the communication of value (applying <IR>) should be the next step in the evolution of corporate reporting. The International <IR> Framework is being developed in consultation with standard setters and regulators to encourage a consistent evolution in the standards, regulation and practice of corporate reporting.

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