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  • IFAC Issues New Guidance to Help Organizations Improve Internal Control

    New York, New York English

    The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has issued new International Good Practice Guidance, Evaluating and Improving Internal Control in Organizations, highlighting areas where the practical application of existing internal control standards and frameworks often fails in many organizations.

    “Sound internal control practices that are continuously adapted to changing circumstances are critical for organizations,” said Roger Tabor, chair of the PAIB Committee. “Organizations are most successful when they can take advantage of opportunities and defend against threats, both of which are enabled by an appropriate system of internal control.”

    The new guidance will assist professional accountants in business as they work with their organizations to continuously evaluate and improve internal control, and ensure that it is an integrated part of the organization’s systems of governance and risk management. Better integrated internal controls can save the organization time and money while helping to create and preserve value.

    “Organizations need to evaluate and review their internal controls at all levels and within all functions to continue to achieve their objectives,” said Henny Kapteijn, chair of the PAIB Committee’s Risk Management and Internal Control Task Force. “A Professional accountant in business, armed with this guidance, can help lead his or her organization through this process to ensure ongoing, effective internal control.”

    About International Good Practice Guidance
    International Good Practice Guidance (IGPG) issued by the PAIB Committee cover areas of international and strategic importance in which professional accountants in business are likely to engage. In issuing principles-based guidance, IFAC seeks to foster a common and consistent approach to those aspects of the work of professional accountants in business not covered by international standards. IFAC seeks to clearly identify principles that are generally accepted internationally and applicable to organizations of all sizes in commerce, industry, education, and the public and not-for-profit sectors. Previously issued IGPGs are available on the IFAC website, including Preface to IFAC’s International Good Practice Guidance.

    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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  • Evaluating and Improving Internal Control in Organizations

    International Good Practice Guidance

    The Professional Accountants in Business (PAIB) Committee has issued this new International Good Practice Guidance, which highlights areas where the practical application of existing internal control standards and frameworks often fails in many organizations. The new guidance will assist professional accountants in business as they work with their organizations to continuously evaluate and improve internal control, and ensure that it is an integrated part of the organization’s systems of governance and risk management.

    IFAC
    English

  • IAASB eNews: June 2012

    New York, New York English

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

    In This Issue: 

    1. Invitation to Comment: Improving the Auditor’s Report
    2. Highlights—53rd Meeting of The IAASB—June 11-15, 2012
    3. International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements
    4. IAASB Strategy and Work Program, 2012–2014
    5. Other 2012 IAASB Activities

    1. Invitation to Comment: Improving the Auditor’s Report

    The IAASB has unanimously approved and released a milestone consultation document in its work to enhance, on a global basis, the communicative value of the auditor’s report on financial statements. The IAASB’s     Invitation to Comment (ITC): Improving the Auditor’s Report sets out the indicative direction of the board’s future standard-setting proposals to improve how and what auditors report in accordance with International Standards on Auditing (ISAs).


    The ITC features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements. It also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought. The ITC will be open for public comment through October 8, 2012. The At a Glance publication provides an overview of the ITC.

    The IAASB chairman, Arnold Schilder, and deputy chair Dan Montgomery were featured in the Wall Street Journal’s CFO Report, where they discussed the IAASB’s project.

    The IAASB approved the Invitation to Comment at the June 2012 meeting. Further information on the project, including a schedule of future round table meetings and a brief podcast on meeting outcomes, can be found at the IAASB’s Auditor Reporting page.


    2. Highlights—53rd Meeting of The IAASB—June 11-15, 2012

    • International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements
    The IAASB approved for issue, subject to confirmation by the Public Interest Oversight Board, ISRE 2400 (Revised), Engagements to Review Historical Financial Statements. ISRE 2400 (Revised), which is effective for reviews of financial statements for periods ending on or after December 31, 2013.

    • Assurance Engagements Other than Audits or Reviews of Historical Financial Information
    The IAASB provided input on certain key directional issues arising from comments received on the exposure draft of proposed International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information. The IAASB will consider a full review of comments received on the exposure draft of ISAE 3000 and a revised draft of the ISAE at its September 2012 meeting.

    • Disclosures
    The IAASB discussed certain directional issues related to the topic of auditing financial statement disclosures. The IAASB will consider a project proposal on the topic at its September 2012 meeting.

    For more information, including meeting highlights and a link to a podcast summary of key meeting outcomes, please visit the IAASB’s meeting page.

    • Next Meeting
    The next IAASB meeting will be held in New York, NY, USA, on September 17– 21, 2012.


    3. International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements

    The IAASB released ISAE 3410. This new standard addresses an increasingly relevant global assurance service in support of reliable emissions reporting, whether for regulatory compliance purposes or undertaken on a voluntary basis to inform investors, consumers, and others. The Basis for Conclusions explains the IAASB’s deliberations in developing the new ISAE. The At a Glance publication provides an overview of the ISAE. 

    4. IAASB Strategy and Work Program, 2012–2014


    The IAASB released its Strategy and Work Program, 2012–2014. Developed through wide public consultation, it sets the direction and priorities for the IAASB’s activities over the next three years with a focus on: supporting global financial stability; enhancing the role, relevance, and quality of assurance and related services in today’s evolving world; and facilitating adoption and implementation of the IAASB’s standards. The document identifies the enhancement of auditor reporting and standards as a main priority for 2012-2014.


    5. Other 2012 IAASB Activities 

    IAASB Enhances Compilations Standard; Addresses SME Needs
    IAASB Releases Disclosures Feedback Statement; Shares Global Insights to Support Essential Collaboration and Cooperation
    IAASB Staff Issues Q&A Document on Professional Skepticism


  • IPSASB Publishes Public Sector Combinations Consultation Paper

    New York, New York English

    The International Public Sector Accounting Standards Board (IPSASB) today released for comment the Consultation Paper, Public Sector Combinations. The IPSASB considers guidance on reporting public sector combinations necessary to meet the objectives of financial reporting, which are to provide information that is useful to users of General Purpose Financial Reports (GPFRs) for accountability and decision-making purposes. This project aims to present a principles-based approach to developing guidance for public sector entities on accounting for public sector combinations.

    The Consultation Paper describes different types of public sector combinations and explores possible approaches to recognizing and measuring public sector combinations in GPFRs. It proposes a distinction between acquisitions and amalgamations. The Consultation Paper then considers approaches to combinations of entities and operations that are not under common control and of entities and operations that are under common control.

    "Acquisitions and amalgamations occur regularly in the public sectors around the world. This Consultation Paper is the first step in proposing financial reporting requirements that will ensure that these transactions are reported in a consistent and transparent manner, ensuring that users’ are able to obtain the information needed to evaluate the nature and financial effect of a public sector combination," explained IPSASB Chair Andreas Bergmann.

    How to Comment
    To access the Consultation Paper and the At-a-Glance document, which provides a summary of the Consultation Paper, or to submit a comment letter, please visit the IPSASB website at www.ipsasb.org. Comments on the Consultation Paper are requested by October 31, 2012. The IPSASB encourages IFAC members, associates, and regional organizations 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 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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  • Public Sector Combinations

    Consultation Paper

    IPSASB Publishes Public Sector Combinations Consultation Paper for Comment. The objective of this Consultation Paper (CP) is to initiate discussion on the possible accounting treatment for public sector combinations (PSCs) in the general purpose financial statements (GPFSs) of an entity that uses accrual-based IPSASs. It considers matters such as the timing of recognition, and the initial measurement basis or approach that could be adopted for the wide range of combinations that may occur in the public sector.

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  • Finding the Balance: Regulation and the Role of the Accountancy Profession

    Szymon Radziszewicz
    IFAC Senior Technical Manager
    6th Cross-Border Meeting
    Chişinău, Moldova English

    Ten professional accountancy bodies from the Central and East European region gathered for the 6th Cross-Border Meeting in Chisinau, Republic of Moldova, on June 21-23, 2012. IFAC Member Body Development Senior Technical Manager Szymon Radziszewicz gave the presentation The Role and Responsibilities of Professional Associations in the Regulation of the Accounting Profession, addressing the applicability framework of the Statements of Membership Obligations and need for a balanced approach in regulation of the accountancy profession, as well as the how the accountancy profession contributes to economic stability and growth. Representatives from the World Bank, Fédération Internationale des Experts-Comptables Francophones, and PAOs in Belgium and the Netherlands also spoke. While in Moldova, Mr. Radziszewicz also met with the Minister of Finance and Audit Oversight Council to discuss difference scenarios for regulation of the accountancy profession in Moldova. Additional materials from the meeting are available through the Association of Professional Accountants and Auditors of the Republic of Moldova's website.

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  • 30th Caribbean Conference of Accountants

    Warren Allen
    IFAC Deputy President
    Institute of Chartered Accountants of the Caribbean
    Antigua & Barbuda English

    Presentation by Warren Allen, IFAC Deputy President, to the Institute of Chartered Accountants of the Caribbean (ICAC)'s 30th Caribbean Conference of Accountants on June 22, 2012. The presentation discusses IFAC, the partnership between IFAC and ICAC, and challenges facing the accountancy profession globally.

  • IAASB Indicates Future Direction of Improved Auditor Reporting; Consults on Value, Viability, and Illustrative Report

    New York, New York English

    The International Auditing and Assurance Standards Board (IAASB) today released a key milestone consultation document in its work to enhance, on a global basis, the communicative value of the auditor’s report on financial statements. The IAASB’s Invitation to Comment: Improving the Auditor's Report sets out the indicative direction of the board’s future standard-setting proposals to improve how and what auditors report in accordance with International Standards on Auditing (ISAs).

    The Invitation to Comment (ITC) features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements. The ITC also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought. 

    “The global financial crisis has spurred users of audited financial statements to want to know more about individual audits and to gain further insights into the audited entity and its financial statements. While the auditor’s opinion is valued, many perceive that the auditor’s report could be more informative and shine light on key matters based on the auditor’s work. Change, therefore, is essential and the IAASB is strongly committed in the public interest to deliver meaningful improvements to auditor reporting as quickly as possible,” said Prof. Arnold Schilder, IAASB chairman.

    At the heart of the suggested improvements is the need for transparency on matters specific to the audited financial statements and the audit that was performed. A proposed new section in the auditor’s report, “Auditor Commentary,” is envisaged to be the mechanism by which auditors may call attention to matters that are, in the auditor’s judgment, likely to be most important to the users’ understanding of the audited financial statements or the audit. There are also suggested improvements with respect to new statements regarding going concern and other information in documents containing the audited financial statements, the description of the responsibilities of the auditor and key features of the audit itself, and enhancement to the format of the report.

    “The Consultative Advisory Group (CAG), which comprises over 30 member organizations and observers that are key stakeholders of the IAASB, is of the view that this is a very important project,” said Linda de Beer, IAASB CAG chairman. “All CAG member organizations, but in particular user groups and regulators, are of the view that the auditor’s report should point the reader to key aspects important for an understanding of the entity and its financial statements. Mandatory auditor commentary will go a long way to address this need of shareholders and others. The CAG responded very positively at its meeting in March 2012 to the aspects that the IAASB is addressing in the ITC.”

    Noted James Gunn, IAASB technical director, “The IAASB has heard – and indeed embraces – the call from stakeholders to re-examine and, to an extent re-invent, the auditor’s report. There is still much work to be done, and the IAASB will continue its deliberations in 2012 and 2013. However, it is critical that the IAASB hear from a wide range of stakeholders at this stage regarding the suggested improvements and whether they will achieve the value that users seek in order for the board’s future standard-setting proposals to develop in a way that will best serve the public interest.”

    The ITC includes planned dates for IAASB roundtables in the North American (September 10), European (September 14), and Asia Pacific (October 8) regions. The IAASB intends to finalize plans for these roundtables in the coming weeks, and will post them on its Auditor Reporting page.

    How to Comment
    The IAASB invites all stakeholders to respond to this ITC. To access the ITC and submit a comment, visit the IAASB’s website. Comments on the ITC are requested by October 8, 2012.

    About the IAASB

    The IAASB develops 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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  • Improving the Auditor’s Report

    IAASB Invitation to Comment

    This Invitation to Comment (ITC) sets out the IAASB’s indicative direction proposed for the future auditor’s report. It features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements to auditor reporting. The ITC also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought.

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