This article offers tips for small- and medium-sized practices (SMPs) in reacting to pressure to lower fees. While this pressure is nothing new, it has been exacerbated in many jurisdictions by the economic climate. The article was released as part of the committee’s practice management series to help IFAC members support their SMP constituents.

The article was released to IFAC member organizations to publish in their journals. For example, see below from CPA Singapore.  

In support of its commitment to explore standards for services that meet the unique needs of small- and medium-sized entities (SMEs), the International Auditing and Assurance Standards Board (IAASB) today released International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements. ISRE 2400 (Revised) follows the release earlier in 2012 of International Standard on Related Services (ISRS) 4410 (Revised), Compilation Engagements, a standard also addressing services of particular relevance to SMEs.

“An important aspect of the IAASB’s strategic focus in recent years has been our response to the growing demand for assurance services, other than the financial statement audit, that help enhance the credibility of SMEs’ financial statements,” noted Prof. Arnold Schilder, IAASB chairman. “In light of this demand, it is fundamental that there be robust standards to support a diverse range of services for this important stakeholder group. ISRE 2400 (Revised) is an important contribution to this aim.”

Review engagements are of particular relevance for entities that are not required, or do not elect, to have an audit, but wish to enhance the credibility of, and confidence in, their unaudited financial statements among their users through practitioner involvement. The practitioner’s report when a review engagement has been conducted in accordance with ISRE 2400 (Revised) describes whether anything has come to the practitioner's attention that causes the practitioner to believe the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework. A review is a limited assurance engagement, however, and the procedures performed are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, the practitioner's review engagement report does not express an audit opinion on the financial statements.

“This standard enhances both the value and performance of review engagements. Through strengthened requirements and additional guidance, it helps ensure there is sufficient appropriate evidential support for the practitioner’s conclusion on the financial statements and further promotes high-quality engagements,” explained James Gunn, IAASB technical director.

The revised standard is effective for reviews of financial statements for periods ending on or after December 31, 2013. An At a Glance publication provides an overview of the revised standard.

About the IAASB
The IAASBdevelops 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 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 revised standard deals with the practitioner’s responsibilities when engaged to perform a review of historical financial statements, when the practitioner is not the auditor of the entity’s financial statements, and the form and content of the practitioner’s report on the financial statements. The revised standard is effective for reviews of financial statements for periods ending on or after December 31, 2013.

Welcome to the International Ethics Standards Board for Accountants (IESBA) eNews.

In This Issue:

1. IESBA Welcomes New Chair
Technical Updates
2. Responding to a Suspected Illegal Act
3. Proposed Change to the Definition of “Those Charged with Governance”
4. Review of Part C of the Code
5. Breach of a Requirement of the Code
6. Reformatting of the Code
7. Strengthening Safeguards against Familiarity Threats
8. Conflicts of Interest
9. Other Matters
Additional News
10. IFAC Is Hiring
11. IESBA Handbook Now Available
12. Upcoming Meetings
13. Share IESBA eNews with Your Colleagues

1. IESBA Welcomes New Chair

Jörgen Holmquist recently began his three-year appointment as the first independent chair of the IESBA. A public member of the IESBA since 2011, he served as director general, DG Internal Market and Services, European Commission from 2007 to 2010, where he was responsible for developing the European Union (EU) regulatory response to the financial crisis, including legislation and policy concerning accounting and auditing.

A key function of the chair is to enable, encourage, and promote a deeper understanding by stakeholders and the public of the strategies and activities of the IESBA. Mr. Holmquist will be active in developing and maintaining effective relationships with national standard setters, regulators, and other key stakeholders.

Mr. Holmquist joined IFAC President Göran Tidström in acknowledging the exemplary contribution and commitment his predecessor Ken Dakdduk brought to the role, and to his position on the board, over the past seven years. To learn more, see Mr. Holmquist's interview in IFAC News and the press release announcing his appointment.

Technical Updates
This section provides an update on recent developments on key projects and a summary of decisions made at the IESBA’s last meeting in June 2012. 

2. Responding to a Suspected Illegal Act

Last month, the IESBA issued Responding to a Suspected Illegal Act. The Exposure Draft (ED) proposes that:

• A professional accountant in public practice providing professional services to an audit client be required to disclose, where the client has not done so, to an appropriate authority, suspected illegal acts that affect financial reporting or fall within the expertise of the professional accountant, and that are of such consequence that reporting would be in the public interest.
• An accountant performing a professional service for a non-audit client and an accountant in business be required to disclose suspected illegal acts to the entity’s external auditor, if any, where the accountant is unable to escalate the matter, or the client/employing organization respectively has failed to take appropriate action, and the matter is of such consequence that the professional accountant determines that disclosure would be in the public interest. If the response to the matter is not appropriate, the professional accountant will have a right to disclose certain suspected illegal acts to an appropriate authority. The accountant would be expected to exercise the right to disclose. An accountant performing a non-assurance service for a non-audit client would have a right to disclose a suspected illegal act that related to the subject matter of the professional service being provided. A professional accountant in business would have a right to disclose a suspected illegal act that affects the financial reporting of the employing organization.
• In exceptional circumstances, a professional accountant would not be required or expected to disclose the suspected illegal act. Exceptional circumstances would arise where a reasonable and informed third party might conclude that the consequences to the professional accountant or others of disclosure are so severe as to justify not complying with the requirement to disclose, for example, where there would be threats to the physical safety of the professional accountant or other individuals. Consequences that are of a commercial nature, such as the loss of a client or income, would not constitute exceptional circumstances.
• Terminating the professional relationship or resigning from the employing organization is not a substitute for disclosure to an appropriate authority.

Visit www.ethicsboard.org to access the ED and submit a comment. Comments are requested by December 15, 2012.

3. Proposed Change to the Definition of “Those Charged with Governance”

The IESBA has issued an Exposure Draft (ED) to revise the definition of the term “those  charged with governance” to more closely align with the definition in ISA 260, Communication with Those Charged with Governance. The ED recognizes that, consistent with ISA 260, communication may be with a subgroup of those charged with governance. Visit www.ethicsboard.org to access the ED and submit a comment. Comments are requested by October 31, 2012.

4. Review of Part C of the Code

At its June meeting, the IESBA discussed the preliminary recommendations of a Working Group formed to review Part C of the Code of Ethics for Professional Accountants (the Code) and identified areas where further development might be appropriate. For consideration in the IESBA’s next Strategy and Work Plan, the Working Group recommended guidance on two additional issues:

• The responsibility of professional accountants in business (PAIBs) to produce financial reports that are faithful representations of the economics of transactions and to avoid association with misleading information and reports; and
• Situations in which PAIBs are pressured by superiors to violate laws or ethical standards.

The IESBA agreed that the review be extended to identify any other related issues that the IESBA may wish to address in its Strategic Plan for 2014/15.

5. Breach of a Requirement of the Code

At its June meeting, the IESBA discussed amended wording in its proposal to address a breach of the Code. The changes reflect board and CAG members’ comments at meetings held earlier this year. The IESBA’s discussion also benefitted from feedback provided in response to a recent survey of those charged with governance. The IESBA concluded:

• The firm shall discuss all breaches and the action it has taken, or proposes to take, with those charged with governance. The communication shall be as soon as possible, unless those charged with governance have specified an alternative timing for less significant breaches;
• The firm shall communicate the breach in writing to those charged with governance; and
• In addition to complying with any legal or regulatory requirements, the firm shall consider reporting a breach to a member body, relevant regulator, or oversight authority when such reporting is common practice or encouraged in the particular jurisdiction by the member body, regulator, or oversight authority.

The IESBA anticipates publishing the final standard in December with an effective date of January 1, 2014.

6. Reformatting of the Code

At its June meeting, the IESBA reviewed a possible alternative approach to formatting the Code to raise the visibility of its requirements and prohibitions. The IESBA found the possible alternative helpful and requested the proposals be developed further and consideration be given to the views of regulators and those who implement the Code.

7. Strengthening Safeguards against Familiarity Threats

At its February 2012 meeting, the IESBA tentatively agreed it is important to have a position on the key regulatory proposals in Europe, the US, and other jurisdictions that are within the board’s purview. At its meeting in June, the IESBA received a report to assist it in determining its position on mandatory audit firm rotation and other possible safeguards as a means of reducing to an acceptable level the familiarity and self-interest threats that can be created as a result of an auditor’s long association with an audit client. It did not yet form an opinion on these matters and determined that it would continue to monitor developments and the debate in this area.

At its June meeting, the IESBA agreed that it was appropriate to review the provisions in the Code that address partner rotation and requested that a project proposal be prepared to initiate this. The project should address the period that a partner can serve as a key audit partner, the time-out period required, the individuals who should be subject to rotation, and other safeguards that could address the threats created by long association with an audit client. The IEBSA will review a project proposal on these issues at its next meeting in December 2012.

8. Conflicts of Interest

The IESBA discussed a summary of responses (as follows) to the Exposure Draft (ED) addressing conflicts of interest:

• Respondents were generally supportive of the application of the reasonable and informed third-party test and the basis on which threats arising from network firm interests and relationships are addressed in the ED;
• Respondents were supportive of proposals to deal with situations when consent cannot be obtained because it would breach confidentiality; and
• Respondents were supportive of the proposed requirements for professional accountants in business.

The IESBA reached tentative conclusions on the following matters:

• The description of a conflict of interest should be redrafted to provide a linkage between the professional activity and the matters that are in conflict, thus making it clear that a conflict of interest is not created merely because the interests of two clients are in conflict; and
• The guidance on managing conflicts of interest, and obtaining and documenting consent, could be clarified by addressing disclosure and consent separately and providing additional guidance on the types of consent—general, explicit, and implied.

The IESBA will consider revised wording at its December 2012 meeting.

9. Other Matters 

In June, IFAC released a new policy position paper setting out guidance on defining the “public interest.” At its June meeting, the IESBA noted the IFAC Board’s approval of the paper. The IESBA also noted that in its response to the Exposure Draft addressing conflicts of interest, the International Organization of Securities Commissions (IOSCO) had encouraged the IESBA to consider the concept of the public interest as outlined in the Code and whether it should be a fundamental principle. The IESBA agreed that it would consider both of these matters at its December 2012 meeting.

The IESBA has been trial testing an approach to assessing the impact of its proposals and to date has received comments from respondents on three different approaches to developing its impact assessment. The IESBA agreed that it would consider its experience with impact assessment, and the experience of the other standard-setting boards supported by IFAC, at its December 2012 meeting with a view to considering whether there is a favored model to use for future IESBA impact assessments.

Additional News

10. IFAC Is Hiring

The International Federation of Accountants, which supports the operations of the IESBA, is searching for a Technical Director to supervise and coordinate the work of the IESBA. Qualified candidates will have senior level accounting experience, including significant technical experience and a deep working knowledge of ethical and independence standards, in particular, the Code of Ethics for Professional Accountants. Visit Working at IFAC to learn more. Qualified candidates should send a resume and salary requirements to jobs@ifac.org.   

11. IESBA Handbook Now Available

The 2012 Handbook of the Code of Ethics for Professional Accountants is now for sale on the IFAC website. Discounts for bulk orders, students, educators, and those in World Trade Organization developing countries are available.

12. Upcoming Meetings

Meetings of the IESBA and the IESBA Consultative Advisory Group are open to the public. The IESBA plans to next meet by conference call on October 15, 2012, 7:00–9:00 AM Eastern Daylight Time and October 16, 2012, 7:00–8:00 AM Eastern Daylight Time. The next face-to-face meeting of the IESBA is scheduled for December 10–12, 2012 in New York, USA. For more information and to register to attend an IESBA meeting as an observer, visit IESBA Meetings.

13. Share IESBA eNews with Your Colleagues

The IESBA issues regular eNews updates to help keep you informed of its activities and recent developments. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive IESBA eNews by following these simple steps:

• Register a new account or log in to your existing IFAC web account.
• Go to My Subscriptions to manage your subscription preferences.
• Select "Ethics eNews" from the checklist, as well as any other newsletters or press releases that you would like to receive.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, today issued Policy Position Paper 6, Global Regulatory Convergence and the Accountancy Profession.

Continued efforts to sustain global regulatory convergence are critical for the evolution of a sound, global financial system. Convergence assists in providing solutions to problems highlighted by the global financial crisis and contributes to greater economic certainty and financial stability. To be effective, global convergence requires the support of a broad range of key stakeholders—including politicians, governments, regulatory bodies, and professional accounting organizations—at the national and international levels.

“Global convergence is a significant issue in the current debate about regulatory reform and responses to the financial and sovereign debt crises,” said IFAC Chief Executive Officer Ian Ball. “Crucially, convergence helps users compare financial information, minimizes the effects of systemic economic risks, reduces information costs, and decreases opportunities for regulatory arbitrage.”

IFAC believes that the global public interest is best served by consistent global adoption and implementation of high-quality, internationally accepted financial reporting, auditing, assurance, public sector accounting, accounting education, and ethics standards (including independence requirements for auditors), and by use of these standards for reporting financial information for capital and debt markets. The process of convergence involves national and regional standard setters and regulators either adopting international standards or modifying their own standards to achieve consistency with agreed global norms.

In addition, the public interest is served when regulatory arrangements involving auditor registration and licensing requirements, the public oversight of auditors of public interest entities, and arrangements that promote greater cross-border trade-in-services are globally consistent and based on cooperation and mutual recognition.

“Successful global solutions require national governments and regulators to avoid the temptation to implement legislative and regulatory reforms without considering the global agenda, and without a serious commitment to cooperating with national and international counterparts,” continued Mr. Ball. "Reforms that have extra-territorial impacts, or regulatory actions that require entities to potentially violate or bypass the laws of other countries, exacerbate current problems in the global financial system."

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.

# # #

Global regulatory convergence is an essential element of the globalization of capital and debt markets, and is important in promoting the comparability of financial information, minimizing the effects of systemic economic risks, and helping to create a level playing field for international competition. For the accountancy profession, regulatory convergence includes the globally consistent adoption and implementation of high-quality internationally accepted financial reporting, auditing, assurance, and auditor independence standards.

The Journal of Accountancy covers the IAASB roundtable meeting recently held in New York City.

Welcome to this Special Edition of eNews—The Role of Professional Accountants in the Sustainability of Small Businesses.

In This Issue:

1. Introduction
2. Reporting and Assurance
3. Guidance and Support Tools
4. Surveys and Reports
5. Events and Presentations
6. Awards
7. Next Steps

1. Introduction

IFAC’s member organizations are increasingly developing activities that specifically address small- and medium-sized entities (SMEs), sustainability, and the role of accountants. This special edition of eNews highlights these activities to facilitate information sharing, and to promote how professional accountants can work with SMEs to improve their environmental, social, and governance (ESG) performance.

There is an opportunity for accountants working in small- and medium-sized practices (SMPs) to respond and provide sustainability advice and guidance to their SME clients. Professional accountants working in SMEs also have a critical role to play in embedding sustainability into the business strategy and practices of their employers.

A good starting point for organizations is to do more with less. Accountants can advise on the benefits of reducing energy costs and pollution, from simple behavioral changes aimed at eliminating waste, to investment in new equipment and alternate sources of energy, to developing an environmental management system. Accountants can also assist with the preparation of sustainability and integrated reports and the provision of assurance thereon.

SMEs are crucially important to the health, stability, and sustainability of the global economy: they account for the majority of private sector gross domestic product (GDP), wealth and employment creation, and social and environmental impacts. Today, they are starting to face pressure to measure and reduce outputs that negatively affect the environment and society. The good news is that studies are finding that initiatives that help SMEs reduce their carbon footprint also help improve their bottom line. SMEs of all kinds—for profits and not for profits, public or private, across all industrial sectors—stand to yield significant benefits from adopting sustainable business practices and their accountants can help.

2. Reporting and Assurance

• For the years 2011-2012, the Association of Chartered Certified Accountants (ACCA) issued its first integrated annual report, which follows the initial approach set out by the International Integrated Reporting Council (IIRC) in their Pilot Programme (see below for additional information on the IIRC).

Prior to the United Nations Conference on Sustainable Development (Rio+20) in June 2012, the ACCA also released Making a Difference at Rio+20, advocating for theinclusion in the final conference outcome document of a call for the integration of sustainability information into corporate reports (from companies of any size). See also the final document from the conference.

• The CPA Australia 2011 Annual Report combines CPA Australia’s annual and sustainability reports, which reflects its “journey towards an integrated report.” The report also benchmarks performance against the Global Reporting Initiatives’ G3.0 Guidelines and sustainability indicators. The report highlights CPA Australia’s activities related to thought leadership, carbon emissions, human resources, governance, and community involvement.
   
• The IIRC is developing the Integrated Reporting Framework, a new approach to corporate reporting that demonstrates the linkages between an organization’s strategy, governance, and financial performance and the social, environmental, and economic context in which it operates.

In 2011, the IIRC released the Discussion Paper, Towards Integrated Reporting—Communicating Value in the 21^st Century. The IIRC received comment letters from more than 200 respondents, including the IFAC Small and Medium Practices (SMP) and Professional Accountants in Business (PAIB) Committees. See additional submissions on the IIRC website.

IFAC’s 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 integrated reporting framework.

In July 2012, the IIRC released its Draft Outline of the Framework and plans to launch a prototype later in 2012, a Draft Framework in early- to mid-2013, and a “version 1.0” of the Framework in late 2013. Mr. Ball recently gave an update on the work of the IIRC, which is available on the IFAC website in the News & Events section.

The ACCA, the Chartered Institute of Management Accountants (CIMA), and the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) are participating in IIRC’s Pilot Programme to test the building blocks of the Framework and inform its development and application.

• The International Auditing and Assurance Standards Board (IAASB) has released the International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas (GHG) Statements, to ensure high-quality assurance reviews for those organizations that release GHG statements. The standard covers reasonable and limited assurance engagements and is designed to help foster public confidence in assured greenhouse gas emissions information. The ISAE has been drafted such that it can be applied in a manner proportionate to the size of complexity of the entity. It is therefore applicable in various contexts, from emissions from a single office to emissions from complex physical or chemical processes at several facilities across a supply chain. See the At a Glance summary for more information.
   
• In 2011, the South African Institute of Chartered Accountants (SAICA) published its first integrated annual report, using the guidelines in the discussion paper released by the (South African) Integrated Reporting Committee. SAICA has also created a dedicated website for sustainability issues: www.sustainabilitysa.org. The website contains information on integrated reporting and sustainability for both South Africa and the global community.

3. Guidance and Support Tools

• The article The Role of SMPs in Greening Small Business, written by Sylvie Voghel, then chair of the IFAC SMP Committee, and Paul Thompson, IFAC deputy director, SME and SMP Affairs, presents the arguments, both environmental and financial, in favor of SMPs implementing “green” policies and initiatives within their own organizations. The article also explores sustainability advisory as an emerging service area for SMPs.
   
• The IFAC Sustainability Framework 2.0, published by the IFAC PAIB Committee, is a tool for accountants around the world to accomplish the integration of sustainability within their organization from three perspectives: strategy, operations, and reporting. Through key considerations developed from examples and opinions from entities of all sizes, from major international corporations to smaller firms, and leaders from around the world, the Framework provides a comprehensive global view of some of the current best practices in each of these areas.
   
• The PAIB Committee also published Investor Demand for Environmental, Social, and Governance Disclosures: Implications for Professional Accountants in Business earlier in 2012 to consider the current trends in investor demand for and use of ESG information, and make recommendations on how professional accountants can better support their organizations in responding to these demands. The report includes a sector-neutral list of the most commonly used core performance indicators, which are of use for professional accountants working with organizations.
   
• The ACCA’s The ABC of CSR for Small and Medium Enterprises provides guidance on how businesses “can voluntarily engage with key stakeholders to determine how to ‘do good while doing good business.’” It breaks corporate social responsibility (CSR) down into plain English and basic categories that can help businesses assess what they do and make sense of CSR from a holistic perspective. It focuses on four key areas that are likely to be important to businesses: employees, environment, community, and the supply chain. The guidance includes definitions of key terms, real-life case studies and an explanation of the what, why, and how of CSR for small businesses.
   
• In 2011, the AICPA, the Canadian Institute of Chartered Accountants, and CIMA issued a joint report discussing how SMEs can profit from sustainability and the growing emphasis SMEs are putting on sustainability. SMEs Set Their Sights on Sustainability uses case studies from Canada, the UK, and the US to illustrate how smaller companies are using sustainability issues to their advantage and taking various approaches to core issues.
   
• The Institute of Chartered Accountants in England and Wales (ICAEW)’s Business Sustainability Program earlier in 2012 to consider the current trends in investor demand for and use of ESG information, and make recommendations on how professional accountants can better support their organizations in responding to these demands. The report includes a sector-neutral list of the most commonly used core performance indicators, which are of use for professional accountants working with organizations.
   
• The Institute of Chartered Accountants in Australia (ICAA) developed a series of case studies that highlight five businesses and their initiatives to integrate sustainable business practices at their organizations. Integrating Sustainability into Business Practices: A Case Study Approach features companies of varying size, industry, and structure and includes tips to help business leaders get involved. For the organizations examined, moving toward a more sustainable business has yielded both environmental and financial gains.
   
• With financial support from the Swedish Transport Administration, the Swedish Energy Agency, the Swedish Environmental Protection Agency, and the Swedish region Västra Götaland, Swedish professional accountancy organization FAR has developed a set of tools known as MER (Miljö Engagerad Revisor, or Environmentally Committed Accountant). The tools strive to help accountants work with their SME clients to assess the environmental and financial status of the business’s operations. MER was featured in a FEE paper promoting the tools as a good practice example in March 2010. To access the tools in English, see the MER website.
   
• Nederlandse Beroepsorganisatie van Accountants has published Corporate Social Responsibility: CSR for SME Accountants, designed to provide practical guidance to professional accountants working with SMEs get started in CSR. The brochure explores a number of different aspects of CSR and its importance for SMEs and the professional accountants that work with them. Most significantly, it examines how an SME and its accountant can get involved in CSR and what roles the accountant can play.

4. Surveys and Reports

• Published in July 2012, the ACCA’s Environmental Aspects of Sustainability, SMEs, and the Role of the Accountant, investigates the intersection between these issues. Building on previous research on the role of SMPs as SME advisors, the study was conducted via 14 interviews with practicing accountants, SME representatives, and environmental consultations.

The research found that SMPs are not generally providing sustainability advice due to limited resources and their lack of knowledge and confidence to apply their accounting skills in this area. In addition, the current sustainability advice provided by SMPs is largely informal in nature, pertaining mostly to cost-reduction opportunities, such as energy consumption and transport costs.

• The Comité de Integración Latino Europa-América (CILEA) conducted a survey from October 2011 to February 2012 on social and environmental reporting in Latin American and Latin European countries. The objective of the survey was to determine what types of social and environmental information is currently being reported in the participating countries, what the requirements are in those jurisdictions, and what the benefits are of reporting such information. The survey results include an indication of which mandatory requirements are applicable to SMEs. Twelve professional organizations participated in the survey, including several IFAC member bodies. For the complete results, see Resultados de la Encuesta Sobre Balance Social.
   
• Released by the Fédération des Experts Comptables Européens (FEE) in January 2010, the policy statement Small and Sustainable: Opportunities for SMEs calls for professional accounting practices to contribute to sustainable thinking in SMEs by developing sustainable products and services for their small business clients. The statement is part of a series of policy statements released by FEE on core issues related to sustainability and the accountancy profession.
   
• ICAEW published Sustainability Assurance: Your Choice in 2010, which outlines the intersection between sustainability and assurance services and what is distinct about the assurance service available from a professional accountant in public practice. The booklet also includes a listing of who makes use of sustainability information, why they want assurance, and the types of services a professional accountant can provide.

The ICAEW’s 2004 report Sustainability: The Role of Accountants, reprinted in 2011, and describes ways in which information supports mechanisms used to promote sustainable development and the challenges and opportunities that these present for professional accountants in business and in practice. An Executive Summary and Abstract of the report are also available.

• In September 2012, the ICAA published a business briefing on building and implementing a sustainability plan to help Chartered Accountants and other financial professionals assess the sustainability of their businesses. Twenty key issues relevant to implementing a new strategic approach to sustainability in a corporate context, the issues are divided into four key areas: building sustainability into your strategy; implementing the strategy; embedding sustainability into core business processes; and creating value through reporting.

5. Events and Presentations

• In response to growing interest in the environmental footprint of SMEs, ACCA held a roundtable, SMEs and SMPs on the Road to Sustainability: Opportunities and Barriers, to discuss trends, challenges, and opportunities shaping the sustainability and CSR agenda for SMEs and SMPs in December 2010.
   
• The Hong Kong Institute of Certified Public Accountants’ professional development events for members in 2012 cover corporate environmental management; environmental, social and governance (ESG) reporting; and becoming a sustainable company.
   
• The South African Institute of Professional Accountants (SAIPA) held its National Conference, Accounting as a Catalyst for Change, on building and implementing a sustainability plan to help Chartered Accountants and other financial professionals assess the sustainability of their businesses. Twenty key issues relevant to implementing a new strategic approach to sustainability in a corporate context, the issues are divided into four key areas: building sustainability into your strategy; implementing the strategy; embedding sustainability into core business processes; and creating value through reporting.

6. Awards

• The ACCA sponsors the annual Sustainability Reporting Awards, which recognize companies for excellence in ESG reporting, with an emphasis on innovative ways to communicate performance and transparency. The awards only comment on transparency and reporting standards. Previous winners have included multinational corporations and SMEs, such as REAP and Traidcraft. ACCA has been sponsoring the awards program for more than ten years.
   
• CPA Australia's Global Research Perspectives Program, an annual research grant program for research of relevance to CPA Australia’s members, the accountancy profession, and the global business community as a whole, includes sustainability and integrated reporting as an eligible category. Research in this area should link internal sustainability-based performance to external reporting and seek to explore how accounting practices should adapt or develop to contend with changing expectations of the responsibility, scope, and impact of business. Previously selected research included the influence and impact of sustainability on capital investment decisions and applying sustainability reporting to product focus.
   
• The Hong Kong Institute of Certfied Public Accountants’ annual Best Corporate Governance Disclosure Awards includes an award for performance in sustainability and corporate social responsibility reporting and a category for listed companies of mid-small market capitalization.  Information about the 2012 awards is available on the Institute’s website.
   
• Winners of the inaugural Finance for the Future Awards were announced in June 2012. The ICAEW, The Prince’s Accounting for Sustainability Project, and NatWest launched the new awards program to promote sustainability in business in the UK. With six categories ranging from start-ups to established major corporations, including not-for-profit, public sector, and small business organizations, the Awards help raise awareness of organizations that have shown how the finance function has driven or had a significant role in embedding and measuring sustainable performance. ICAEW also recently launched a series of new videos and website dedicated to encouraging sustainability in business—Just Good Business.

7. Next Steps

Join us on LinkedIn! As evidenced in this newsletter, IFAC member bodies are ramping up efforts to support accountants in this area, but there may be scope for the profession to do even more to position and equip professional accountants as sustainability advisors.

Please join us in the IFAC group on LinkedIn to share your thoughts on how professional accountants in business and in practice, especially SMPs:

• can further support their organizations in strengthening and facilitating sustainable practices; and
• provide high-quality sustainability advice to SMEs

We are also interested in learning what else member bodies are doing to support their SMP members in sustainability accounting, reporting, and advising.

IFAC and the SMP and PAIB Committees look forward to hearing from you.

Note: IFAC has reported on the member body activities related to SMPs/SMEs and sustainability of which it was aware. If you feel that your organization has an activity that should have been included, please email communications@ifac.org so that we may include it in any subsequent editions of this newsletter.