This At-a-Glance is a summary of Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Presentation in General Purpose Financial Reports.

Thank you for subscribing to the eNews from the International Public Sector Accounting Standards Board (IPSASB). This edition provides a summary of decisions made at the IPSASB’s meeting held March 11-14, 2013, in Abu Dhabi. Please go to the IPSASB Meeting Page for the meeting highlights and relevant agenda items.

1. Conceptual Framework  ED 4, Presentation in General Purpose Financial Reports
2. The Preface to the Conceptual Framework
3. Financial Statement Discussion and Analysis
4. Reporting on the Long-Term Sustainability of an Entity’s Finances
5. Public Sector Combinations
6. First-Time Adoption of Accrual Basis IPSASs
7. Next Meeting
8. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1.     Conceptual Framework ED 4, Presentation in General Purpose Financial Reports

The IPSASB approved the Conceptual Framework–Exposure Draft 4 (CF–ED4), Presentation in General Purpose Financial Reports, which describes presentation, display, and disclosure. It proposes an approach to presentation of decisions involving a two-level application of the concepts developed in chapters 1–4 of the Conceptual Framework.

In finalizing CF–ED4, the IPSASB confirmed:

• The description of key terminology, including presentation, display, and disclosure; and
• The decision-focused approach to presentation, involving decisions on information selection, location, and organization.

The IPSASB also confirmed application of both the qualitative characteristics and constraints on information included in general purpose financial reports (GPFRs) when making presentation decisions. The IPSASB also confirmed its decision not to include specific presentation objectives, relying on the direct application of the objectives of financial reporting identified in chapter 2 of the Framework.

The ED will have a four-month exposure period. The ED and the At-a-Glance document, which provides a summary of the ED, will be published shortly.

2.     The Preface to the Conceptual Framework

The IPSASB also discussed the approach to incorporation of the Preface into the Conceptual Framework. While it confirmed that the Preface should be included in the Framework, it decided to defer approval and publication until the Framework is being finalized. This will allow the linkages between the characteristics identified in the Preface and the concepts in the Framework chapters to be made more explicit.

The IPSASB reviewed the draft Preface presented by staff and gave directions for amendments to some of the sections, particularly those dealing with involuntary transfers and non-exchange transactions, and the longevity of the public sector.

3.     Financial Statement Discussion and Analysis

Consistent with a decision earlier in the meeting to issue non-authoritative guidance for pronouncements relating to general purpose financial reports (GPFRs), the IPSASB confirmed that the draft International Public Sector Accounting Standard (IPSAS), Financial Statement Discussion and Analysis, which has been developed from Exposure Draft 47, should be revised to become a Recommended Practice Guideline (RPG).

The IPSASB reviewed the current draft, acknowledging that specific wording may change due to the decision to change its status, and gave directions for amendments. A draft RPG with a Basis for Conclusions will be considered for approval at the June 2013 meeting.

4.     Reporting on the Long-Term Sustainability of an Entity’s Finances

The IPSASB reviewed a draft Recommended Practice Guideline (RPG) 1, Reporting on the Long-Term Sustainability of an Entity’s Finances, which has been developed from Exposure Draft 46 and provided directions for amendments. In particular, it directed staff to revise the section relating to the dimensions of long-term fiscal sustainability to directly refer to the dimensions of service, revenue, and debt and to explain that there are two aspects to each dimension: capacity and vulnerability. Capacity is the ability of the entity to influence or change the service, revenue, or debt dimensions, and vulnerability is the extent of the entity’s dependence on factors outside its control or influence. The draft RPG will be revised and presented at the June 2013 meeting with a view to approval.

5.     Public Sector Combinations

The IPSASB considered the responses received to Consultation Paper (CP), Public Sector Combinations. The CP was issued in June 2012 and received 26 responses.

The IPSASB agreed that the project should continue with the scope proposed in the CP, which includes guidance on (a) the de-recognition and recognition of assets for the transferor, (b) the definition of an operation, (c) disclosure requirements for combining entities relating to the going concern basis, (d) subsequent measurement requirements similar to that included in International Financial Reporting Standard (IFRS) 3, Business Combinations, and (e) distinguishing between asset acquisitions, entity and operation acquisitions, and amalgamations using relevant text from IFRS 3.

The IPSASB had an initial discussion about whether the approach used in the CP of distinguishing acquisitions and amalgamations, with a further distinction for public sector combinations not under common control and under common control, is appropriate. Staff was directed to outline the possible consequences of such distinctions for review at its June 2013 meeting. The IPSASB will also conduct a detailed analysis of the responses to the CP and preliminary views during that meeting.

6.     First-Time Adoption of Accrual Basis IPSASs

The IPSASB discussed an analysis of the transitional provisions related to IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), IPSAS 25, Employee Benefits, and IPSAS 32, Service Concession Arrangements: Grantor, and provided directions to staff on various aspects including categorization. The IPSASB agreed to adopt a transition period of three years as a general guideline, acknowledging that this could be changed at the standards level if determined appropriate.

At the June 2013 meeting, an analysis of the transitional provisions for the financial instruments standards will be considered. The IPSASB thanks Ernst & Young for providing staff support up to this point in the project. The South African Accounting Standards Board is now providing staff resources for the project and will be developing an exposure draft for review, with a view to approval in September 2013.

7.     Next Meeting

The next IPSASB meeting will be held in Toronto, Canada, on June 17–20, 2013. Members of the public may register to observe the meetings. Registration will close one week before the first day of the meeting.

8.  World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this can’t-miss IFAC event, held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will set the tone for the future.

The WCOA also affords an unparalleled opportunity for organizations and firms to share their projects and visions with the world by taking advantage of one of our carefully crafted sponsorship packages. There are numerous options so you’ll be able to select the one that best suits your organization’s unique strategy and goals. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com. 

The International Federation of Accountants (IFAC), the global organization for the accountancy profession with 172 members and associates in 129 countries, today applauded the release of the proposed International Integrated Reporting Framework by the International Integrated Reporting Council (IIRC). The Framework is expected to be a critical tool for businesses as they create integrated reports and drive integrated thinking in their organizations.

Integrated reporting is the next step in the evolution of corporate reporting and communications, helping organizations to communicate a clear and candid picture of their performance to investors.

“The accountancy profession plays a vital facilitating role in bringing integrated reporting to more organizations, and the Framework will help guide organizations and professional accountants in this process,” said IFAC President Warren Allen, who is also a member of the IIRC Council. “Feedback from individual accountants and the profession on the proposed Framework is critical.”

IFAC has been a proactive participant in the development of the Framework, and is a co-founder of the IIRC. In addition to Mr. Allen serving on the IIRC Council, Ian Ball, former IFAC CEO and current principal advisor, chairs the IIRC Working Group. IFAC also has a staff member who has been seconded to the IIRC on a full-time basis.

The IIRC is asking all stakeholders to provide feedback on the International Integrated Reporting Framework during its public consultation period, which closes July 15, 2013. The Framework has been released in English but will also be available soon in additional languages.

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 172 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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Presentation given to the Federation of Accounting Professionals in Thailand during a seminar on the IFAC Statements of Membership Obligations (SMOs). The presentation includes information what the SMOs are, their importance, the November 2012 revisions, and what organizations need to understand and do to apply the SMOs.

Szymon Radziszewicz, IFAC Senior Technical Manager, recently held a seminar with the Philippine Institute of Certified Public Accountants (PICPA) on how the approach to building and strengthening professional accountancy organizations is changing as the global landscape changes. The presentation featured the relevant economic and global changes since the global financial crisis began and how regulation of the accountancy profession has shifted. IFAC’s strategic global position and policies are also detailed.

Attendees at the seminar included top officials of the Philippine Securities and Exchange Commission and the Board of Accountancy and representatives of the top firms, the small- and medium-sized practices community, and the Philippine government.

Welcome to IFAC's Small and Medium Practices (SMP) Committee eNews.

In This Issue:

SUSTAINABILITY 

1. Sustainability: Challenges and Opportunities for SMPs and SMEs
2. Updated Good Practice Checklist Features Environmental Management

STANDARDS AND REGULATION

3. Closing Soon: IAASB Consults on Audit Quality Framework
4. SMP Committee Contributes to Standard Setters’ Key Projects and Strategic Planning
5. IFRS for SMEs Update

RESOURCES AND EVENTS

6. Registration Closing Soon: 2013 IFAC SMP Forum
7. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

SUSTAINABILITY

1. Sustainability: Challenges and Opportunities for SMPs and SMEs

Small- and medium-sized entities (SMEs) might think that sustainability is only relevant to large companies. Maybe they think they cannot afford to be sustainable, that measuring and managing environmental performance amounts to a costly and unnecessary burden. Moreover their accountants, both those employed by the business (accountants in business) and those providing services to the business (accountants in practice), will tell you it is a hard sell getting SMEs to embrace sustainability. However, SMEs that integrate sustainability into their core business strategy can benefit from lower costs, reduced risk, and new opportunities. And their accountants, typically operating in SMPs, can play a key role in their journey.

SMEs and the Benefits of Sustainability

SMEs are crucially important to the health and stability of the global economy: they account for over 95% of all businesses and for the majority of private sector gross domestic product (GDP), wealth and employment creation, and social and environmental impacts. Meanwhile, there is immense pressure on the natural environment and a recognition that finite resources are fast depleting. Today, SMEs are increasingly being faced with pressure to measure and manage their impact on the environment. They are an integral part of the supply chain where there is a growing demand for sustainability management both from customers and suppliers, especially for those SMEs seeking to secure contracts with governments or larger companies. SMEs also need to ensure they have access to the resources they need to be able to continue offer their products and services in the future.

That said, many SMEs may still feel they can delay addressing sustainability issues. Our global SMP poll indicates there are other more urgent issues preoccupying businesses, including economic concerns and keeping up with new standards, prompting sustainability to slide down their list of priorities. This may explain why few SMPs are presently offering sustainability services. But in the longer term, the sustainability issue is here to stay.

The good news is that there is growing evidence that sustainability initiatives, such as those to reduce an SME’s carbon footprint, can also help improve their bottom line.

2. Updated Good Practice Checklist Features Environmental Management

The second edition of the Good Practice Checklist for Small Business is now available. This multi-part checklist features a new standalone section on environmental management. Other sections cover financial and strategic management tasks and regulatory requirements, among others. The checklist is meant primarily for SMPs as a marketing or diagnostic tool to help them determine the advice a small business client may need, and also to help them in managing their own businesses. Six translations of the checklist have either been completed or are in progress.

STANDARDS AND REGULATION

3. Closing Soon: IAASB Audit Quality Framework Consultation

The comment period for the International Auditing and Assurance Standards Board (IAASB)’s Consultation Paper, A Framework for Audit Quality, will close on May 15, 2013. Through the proposed framework, the IAASB aims to raise awareness of the key elements of audit quality, encourage stakeholders to explore ways to improve audit quality, and facilitate greater dialogue on the topic. The SMP Committee plans to submit a comment letter and encourages individual SMPs to comment as well. 

4. SMP Committee Contributes to Standard Setters’ Key Projects and Strategic Planning

IAASB

The SMP Committee provided comments to the International Auditing and Assurance Standards Board (IAASB) on its auditor reporting project prior to their February meeting. See the IAASB February Meeting Page for the agenda papers, highlights, and podcast. In advance of the IAASB April Meeting, the committee will provide further comments on this project as well as the IAASB’s work addressing disclosures, International Standard on Auditing (ISA) implementation monitoring, and International Standard on Assurance Engagements (ISAE) 3000.

The IAASB is seeking comments, insights, and views from all stakeholders to help shape its future direction for 2015 and beyond via the Strategic Review Survey. Responses to the survey will inform the development of a formal Consultation Paper to be issued in late 3013. The SMP Committee plans to submit a response and encourages individual SMPs to comment as well.

IESBA

In early March, the committee responded to the International Ethics Standards Board for Accountants (IESBA)’s online survey, which was conducted as part of the IESBA’s strategic review to develop its strategy and work plan for the period 2014-2016. The survey has now closed and the IESBA will consider the survey responses in upcoming meetings.

5. IFRS for SMEs Update

In 2012, the International Accounting Standards Board (IASB) issued a Request for Information (RFI) to begin its comprehensive review of the International Financial Reporting Standard for Small- and Medium-Sized Entities (IFRS for SMEs). The objective of the RFI was to publicly consult on whether amendments are required to the standard. Last month, the IASB began to discuss issues relating to the scope of the standard, including whether or not the standard should be used by publicly accountable entities. See the IASB’s March Meeting Page to access the agenda papers and audio recording. See a summary of decisions in the March IASB Update.

EVENTS

6. Registration Closing Soon: 2013 IFAC SMP Forum

The 2013 IFAC SMP Forum will be held in Kampala, Uganda, on June 5, 2013, and jointly hosted with the Institute of Certified Public Accountants of Uganda (ICPAU) and the Pan African Federation of Accountants (PAFA). Each IFAC member organization may send up to ten delegates, who should be those responsible for SMP/small- and medium-sized entity (SME) affairs at their organization. Registration forms have been sent to IFAC member organizations. If you are an individual member of an IFAC member organization and wish to attend, please register your interest with your organization as soon as possible, as the deadline for registration is April 30, 2013. More information will be posted as it becomes available.

7. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this can’t-miss IFAC event, held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will set the tone for the future.

The WCOA also affords an unparalleled opportunity for organizations and firms to share their projects and visions with the world by taking advantage of one of our carefully crafted sponsorship packages. There are numerous options so you’ll be able to select the one that best suits your organization’s unique strategy and goals.

Small- and medium-sized entities (SMEs) might think that sustainability is only relevant to large companies. Maybe they think they cannot afford to be sustainable, that measuring and managing environmental performance amounts to a costly and unnecessary burden. Moreover their accountants, both those employed by the business (accountants in business) and those providing services to the business (accountants in practice), will tell you it is a hard sell getting SMEs to embrace sustainability. However, SMEs that integrate sustainability into their core business strategy can benefit from lower costs, reduced risk, and new opportunities. And their accountants, typically operating in small- and medium-sized practices (SMPs), can play a key role in their journey.

SMEs and the Benefits of Sustainability

SMEs are crucially important to the health and stability of the global economy: they account for over 95% of all businesses and for the majority of private sector gross domestic product (GDP), wealth and employment creation, and social and environmental impacts. Meanwhile, there is immense pressure on the natural environment and a recognition that finite resources are fast depleting. Today, SMEs are increasingly being faced with pressure to measure and manage their impact on the environment. They are an integral part of the supply chain where there is a growing demand for sustainability management both from customers and suppliers, especially for those SMEs seeking to secure contracts with governments or larger companies. SMEs also need to ensure they have access to the resources they need to be able to continue offer their products and services in the future.

That said, many SMEs may still feel they can delay addressing sustainability issues. Our global SMP poll indicates there are other more urgent issues preoccupying businesses, including economic concerns and keeping up with new standards, prompting sustainability to slide down their list of priorities. This may explain why few SMPs are presently offering sustainability services. But in the longer term, the sustainability issue is here to stay.

The good news is that there is growing evidence that sustainability initiatives, such as those to reduce an SME’s carbon footprint, can also help improve their bottom line. SMEs of all shapes and sizes—for profits and not-for-profits, public or private, across all industrial sectors—stand to yield significant benefits from adopting sustainable business practices. The initial cost of integrating sustainability into the core business strategy, and reporting on it, can be more than offset by cost savings, reduced risk, positive brand association, and the ability to meet consumer, investor, and supplier demand for environmentally conscientious products and services. In this way, the initial cost is more an investment.

Opportunities for SMPs

Accountants working in SMEs can help their employers at each step of the way, from advising on the costs/benefits of behavioral changes aimed at reducing waste, to investment in new equipment and alternate sources of energy, to developing a comprehensive environmental management system (EMS). However, many SMEs lack the capability to this without outside help. They will likely seek the help of someone they trust, their accounting firm, a demand that can generate new revenue opportunities for SMPs. But first SMEs need to know that they can expect assistance of this nature from their accountants.

Given that SMEs are keen to realize the financial benefits of adopting more sustainable practices, a starting point for SMPs might be to offer to help their clients implement the plan-do-check-act method for the control and continuous improvement of processes and products. This advisory service could include improving business opportunities and creating efficiencies, identifying the risks to cash flow that social, economic, and environmental change will present, and ensuring that clients or employers take advantage of the cost reductions, minimize any cost increases, and maximize the potential revenue by adopting business strategies that identify and address those sustainability issues that are most relevant to their particular business circumstances. In addition, SMPs might wish to encourage their SME clients or employers to have an EnviroReady Report, an engagement based on ISRS 4400 that confirms that the business has an environmental management system (EMS) in place that meets the requirements in ISO 14001:2004.

Some accountants might also help SMEs do some form of sustainability reporting, such as the Global Reporting Initiative’s Level C. They could employ a step-by-step approach of making a public commitment to take action, assessing the business’s impact, setting targets for reducing impact, acting to reduce impact, and publishing the business’s policies and actions. Some SMPs are already helping their clients to develop metrics and the systems needed to capture and report on the metrics. If reporting is deemed valuable, SMPs could progressively do more, culminating in getting some form of assurance on what the client/employer reports, perhaps using the IAASB’s ISAE 3000 series of engagement standards, such as ISAE 3410 for greenhouse gas emissions.

Initial Steps in Offering a Sustainability Service

An ACCA report suggests that SMPs take the following steps to ensure they have the prerequisite expertise to offer a sustainability service:

1. Build partnerships—SMPs should establish collaboration with local environmental sustainability experts in order to gain local access to credible knowledge.

2. Gain experience—This begins in the SMP’s own business. Practitioners should review the environmental sustainability of their own business and then use that valuable experience to have rounded, relevant conversations, based on genuine experience, with their clients.

3. Seek information—Practitioners should familiarize themselves with information sources that they could recommend to others or use to broaden their own knowledge.

4. Formalize commitment—Where appropriate, practitioners should formalize their commitment to offering environmental sustainability advice through marketing and awareness raising in newsletters, their documentation, and website.

Ultimately, offering a sustainability service can help SMPs both add value to the services they offer and help their clients/employers improve the way they run their businesses. Applying the same principles to the practice itself can help accountants improve the way they run their own businesses as well. Does your practice offer a sustainability service? If so, we’d love to hear about it. Please describe your experience and any advice you would give.

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA). This edition of IESBA eNews provides a summary of decisions made at the IESBA’s meeting held March 11-13, 2013, in New York, USA. See the Meeting Page for the meeting highlights, including a podcast summary, and agenda papers.

IN THIS ISSUE:

1. Responding to a Suspected Illegal Act
2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
3. Review of Part C of the Code
4. Structure of the Code
5. Definition of Those Charged with Governance
6. Emerging Issues and Outreach
7. Non-Assurance Services
8. Next Meetings
9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements
10. IESBA is Hiring
11. 2013 IESBA Handbook
12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1. Responding to a Suspected Illegal Act

The IESBA considered the significant comments received from over 70 respondents on its Exposure Draft (ED), Responding to a Suspected Illegal Act. Topics discussed included: disclosure of a suspected illegal act to an appropriate authority; disclosure to the external auditor; right with an expectation to disclose to an appropriate authority; the “public interest” reporting test and escalation threshold; the requirement to confirm or dispel the suspicion; types of suspected illegal acts to be disclosed; and the interaction of the proposed standard with the International Standards on Auditing (ISAs).

The IESBA will continue its consideration of key issues and future actions at its June 2013 meeting.

2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

The IESBA received an update on the project to review the long association provisions in Section 290 of the Code of Ethics for Professional Accountants (the Code) to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. Among other matters, the IESBA discussed the approach to research into the partner rotation provisions in major jurisdictions and canvassing the views of stakeholders on the threats associated with long association.

3. Review of Part C of the Code
The IESBA approved a proposal to commence a project to review Part C of the Code addressing professional accountants in business (PAIBs) to ensure that the provisions in that part of the Code are robust and remain appropriate. Phase I of the project will review Sections 300, 320, 330, and 340 of the Code. This phase will, in particular, address pressure by superiors and others to engage in unethical or illegal acts, the responsibility of PAIBs to produce financial reports that are faithful representations of the economics of transactions, and associated matters. Phase II of the project will address Section 350, which is related to facilitation payments and bribes. The IESBA will discuss the project further at its June 2013 meeting.

4. Structure of the Code

The IESBA considered draft terms of reference for, and an initial status report from, the working group formed to advise the Board on ways to improve the readability, understandability, and accessibility of the Code. Among other matters, the IESBA discussed the objectives, scope, and timing of the initiative, as well as the approach to the work. The board agreed that careful thought should be given to distinguishing clearly between options that could be considered on a short term basis and longer term options that could address a more fundamental review of the structure of the Code. The board asked the working group to explore these options and to undertake the research to support the way forward.

5. Definition of Those Charged with Governance

The IESBA considered significant comments received on its ED of a proposed change to the definition of the term “those charged with governance.” The IESBA agreed in principle to amend the proposed definition in the light of respondents’ significant comments. The IESBA will consider the final definition for approval at its June 2013 meeting after consulting with its Consultative Advisory Group (CAG) on the meaningful ED comments in April 2013.

6. Emerging Issues and Outreach

The IESBA agreed to the establishment of an Emerging Issues and Outreach Working Group to advise the board on emerging issues and international developments of relevance to the IESBA’s work, and on the board’s strategy for outreach. The IESBA will consider draft terms of reference for the Working Group at its June 2013 meeting.

7. Non-Assurance Services

The IESBA received a brief update on the Task Force’s approach to information gathering for purposes of scoping out the project. The IESBA will consider the information gathered and the Task Force’s proposals regarding the scope of the project at the June 2013 IESBA meeting.

8. Next Meetings

Meetings of the IESBA and the IESBA CAG are open to the public. The IESBA CAG will next meet in New York, USA on April 10, 2013. The next IESBA meeting will be held in New York, USA, on June 10–12, 2013.

For more information and to register to attend an IESBA or IESBA CAG meeting as an observer, visit IESBA Meetings  or IESBA CAG Meetings respectively.

9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements

In a study released in February 2013, the Fédération des Experts Comptables Européens (FEE) compared provisions in the EU frameworks on auditor independence (the 2006 Statutory Audit Directive and the 2002 Recommendation on Statutory Auditor’s Independence in the EU) and the Independence provisions of the IESBA Code.

Among other matters, the study found that the Code is more robust with respect to audits of public interest entities.  In particular, the Code includes strict provisions for those non-audit services that are incompatible with the provision of audit services. The study also found that the Code tackles other matters that may be considered for inclusion in future EU audit legislation.

10. IESBA is Hiring

The IESBA is searching for a technical manager to join its staff team based in New York. Qualified candidates should have experience at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similar. For a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to jobs@ifac.org. 

11. 2013 IESBA Handbook

The IESBA is developing the 2013 Handbook of the Code of Ethics for Professional Accountants. It will contain the final pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” The 2013 Handbook is expected to be released in the second quarter of 2013. For the current edition, see 2012 IESBA Handbook.   

12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this IFAC event, which is held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.

Welcome to IFAC’s International Auditing and Assurance Standards Board (IAASB) eNews.

In This Issue:

1. IAASB Addresses Use of Direct Assistance: Releases ISA 610 (Revised 2013), Using the Work of Internal Auditors
2. Open for Comment: A Framework for Audit Quality
3. IAASB Invites Input on Strategic Review
4. Highlights—February 2013 IAASB Meeting
5. IAASB Presents at NYSSA Event
6. The IAASB is Hiring
7. Other Relevant Standard-Setting Board and IFAC Initiatives
8. Share IAASB eNews with Your Colleagues
9. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1.     IAASB Addresses Use of Direct Assistance; Releases ISA 610 (Revised 2013), Using the Work of Internal Auditors

In follow-up to its 2012 release of stronger standards dealing with the external auditor’s use of an internal audit function’s work, the IAASB has released International Standard on Auditing (ISA) 610 (Revised 2013), Using the Work of Internal Auditors. The revised ISA now includes requirements and guidance for external auditors when determining whether they can use direct assistance from internal auditors and, if so, in which areas, and to what extent. The material addressing direct assistance does not apply if the external auditor is prohibited by law or regulation from obtaining direct assistance. This new material is effective for audits of financial statements for periods ending on or after December 15, 2014.

2.     Open for Comment: A Framework for Audit Quality

The IAASB released for public comment a consultation paper addressing audit quality. A Framework for Audit Quality seeks input from stakeholders internationally who have an interest in continually enhancing audit quality, including regulators, audit committees, investors, and audit firms. Through the proposed framework, the IAASB aims to raise awareness of the key elements of audit quality, encourage stakeholders to explore ways to improve audit quality, and facilitate greater dialogue between key stakeholders on the topic. The IAASB is seeking responses to several questions listed in the consultation paper, in particular, whether the framework is clear, comprehensive, and useful.

Comments are requested by May 15, 2013.

3.     IAASB Invites Input on Strategic Review

The IAASB has released an online survey seeking public comment, insights, and views from all stakeholders to help shape its future direction for 2015 and beyond. The survey asks for input on emerging developments and trends that are likely to be important in the public interest, as well as specific areas of focus for development of standards and related guidance. It also asks for input on the appropriate balance between setting new and revised standards and facilitating their adoption and effective implementation. Views are also sought on the appropriateness of the IAASB extending its future strategy period to five years (2015–2019). Responses to the survey will inform the development of a formal consultation paper on the strategy and work program commencing 2015, to be issued in late 2013.

All stakeholders are encouraged to complete the survey. Comments are requested by May 7, 2013.

4.     Highlights—February 2013 IAASB Meeting

Auditor Reporting

The IAASB deliberated issues arising from stakeholder responses to its June 2012 Invitation to Comment (ITC), Improving the Auditor’s Report. Key discussion points included the need for a new ISA, tentatively ISA 701. ISA 701 will include requirements and guidance to assist auditors in determining what additional information should be included in a new section of the auditor’s report under the heading Key Audit Matters. The IAASB’s view is that the auditor’s judgment of what to report externally is derived from what had been communicated to those charged with governance. The IAASB further considered how proposed ISA 701 should best reflect this view and discussed the factors to guide the auditor’s decision-making process in relation to external reporting.

ISA Implementation Monitoring

The IAASB received an overview of the preliminary findings from Phase 2 of its ISA Implementation Monitoring project. A draft report of findings will be presented to the IAASB at its April 2013 meeting.

Assurance Engagements Other than Audits or Reviews of Historical Financial Information

The IAASB received a presentation providing further background on the nature and scope of direct engagements, and discussed how the features of direct engagements relate to concepts in proposed International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

For more detailed information, please visit the IAASB’s meetings page. The next IAASB meeting will be held in New York, New York, on April 15–19, 2013.

5.     IAASB Presents at NYSSA Event

Dan Montgomery, IAASB deputy chair, joined a January 2013 New York Society of Security Analysts (NYSSA) panel discussion, where he presented The Auditor’s Role Relating to Information Communicated to Financial Statement Users. Mr. Montgomery discussed the IAASB’s proposed changes to the auditor’s report, disclosures within and outside financial statements, and relevant information for users of financial statements.

6.     The IAASB is Hiring

The IAASB has open positions within its technical staff team. Interested individuals are invited to submit their resumes to: jobs@ifac.org. Further information about the positions is available on the IAASB home page.

7.     Other Relevant Standard Setting Board and IFAC Initiatives

Initiatives of IFAC committees and other independent standard-setting boards supported by IFAC may be of interest to those who follow the work of the IAASB, including the following:

• IESBA Strengthens Key Sections of Code of Ethics for Professional Accountants
• New Publication from IFAC Helps Professional Accountants Implement Effective Business Reporting Processes in Organizations
• IAESB Issues Revised IES 5, Initial Professional Development–Practical Experience
• IFAC Welcomes G-20 Focus on Public Sector Financial Management, EC Report on Accrual-based Accounting
• Engagement Quality Control Reviews: Practical Considerations

 8.     Share IAASB eNews with Your Colleagues

The IAASB issues regular eNews updates to keep you apprised of the board's activities and recent publications. Please forward this eNews to any interested colleagues and let them know they can register and subscribe to this and other eNews bulletins on the IFAC website.

9. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this IFAC event, which is held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.