A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.A policy position paper released today by the International Federation of Accountants (IFAC) describes and explains the international standard-setting process, particularly for International Standards on Auditing (ISAs). The paper, International Standard Setting in the Public Interest, explains how responsibility is shared between public and private sector organizations to produce high quality standards that are in the public interest. The paper identifies the underlying principles of legitimacy, independence, accountability, transparency and performance that are key to a successful standard-setting process, and it describes how the structures and processes of the independent standard-setting boards in the areas of international auditing, ethics and accounting education are consistent with these principles.

In the immediate post Sarbanes-Oxley period, IFAC and the international regulatory community took initiatives to strengthen the international auditing standard-setting process in line with these principles. Among the most important actions was the establishment of the Public Interest Oversight Board (PIOB) to provide independent public interest oversight of the key elements of the standard-setting structure and process. The PIOB, formed in 2005, oversees the International Auditing and Assurance Standards Board (IAASB), the International Accounting Education Standards Board, the International Ethics Standards Board for Accountants, as well as the IFAC Member Body Compliance Program.

"A system of shared responsibility for standard setting draws on the strengths of the profession and of the regulators. Each group brings different skills, experiences and authority to the standard-setting process," states IFAC Chief Executive Officer Ian Ball.  "The PIOB, for example, provides assurance that the standard-setting process is operating independently and in the public interest."

In addition to the establishment of the PIOB, other significant elements of the standard-setting process include a highly transparent due process, a strong role for Consultative Advisory Groups that provide technical input from the perspective of external stakeholders, including regulators, and a composition of the standard-setting boards that has an appropriate balance of "practitioner" and "non-practitioner" members.

Speaking about the system as a whole, Mr. Ball emphasizes, "The ultimate test of any system is that it works well, in this case meaning it produces high quality standards that operate in the public interest. The level of adoption and endorsement of the standards - also outlined in the paper - suggest that this test is being met."

 "IFAC and the regulators share a common goal: we want effective standard-setting processes," points out new IFAC President Robert Bunting. "To be effective they must operate in the public interest, they must be balanced, not resulting in excessive compliance costs for any group, and they must contribute to building public confidence in financial reporting. These criteria are ageless, but they are worth re-emphasizing in times of global crisis like these."

International Standard Setting in the Public Interest may be downloaded from the IFAC website by going to http://www.ifac.org/Store/. 

IFAC (http://www.ifac.org/) 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 158 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. IFAC also issues guidance to encourage high quality performance by professional accountants in business.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) is recognizing World Accountancy Week -- December 7-13, 2008 -- by launching an initiative to reach out to more professional accountants in business. The committee is inviting their participation in selecting the winner of its 2008 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have been published by IFAC's 158 member bodies and associates.  This is the first time that individual accountants worldwide have been invited to be part of the selection process.

"IFAC is dedicated to making its materials more useful and relevant to professional accountants in business," states Ian Ball, IFAC chief executive officer. "The best way to do that is to involve them more directly in our work." 

Ten articles focused on leading-edge issues that PAIBs are addressing today have been selected by the PAIB Committee for global distribution and have been nominated for the top Article of Merit Award. Professional accountants in business are invited to rate their usefulness.  This input will be used to select the winning article.

The ten articles may be viewed by going to http://web.ifac.org/PAIB/articles-of-merit-2008. They focus on the following topics, among others:

• Outsourcing the finance and accounting function;
• Measuring board performance;
• Analyzing mergers and acquisitions;
• Managing strategic risk;
• Planning multi-year strategies; and
• Achieving employee alignment and motivation.

Individuals are requested to review and rate these articles by January 11, 2009. The winning article will be announced in early 2009.

About IFAC
IFAC is the worldwide 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 currently comprised of 158 professional accountancy bodies in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

To mark the beginning of World Accountancy Week, the International Federation of Accountants (IFAC) has released the results of its 2008 Global Leadership Survey. This year's survey sought the views of leaders of accountancy institutes worldwide on the current credit crisis and other top issues for the profession. Chief executives and presidents of 110 accountancy organizations* worldwide responded to the survey. The majority of these organizations have been actively engaged, like IFAC, in identifying and executing appropriate responses to the crisis, supporting their members in understanding applicable international standards, and working with regulators, business groups and others to find solutions. Many of these initiatives are featured on IFAC's website in its new page on the global financial crisis (http://www.ifac.org/financial-crisis/).

"According to survey respondents, the credit crisis is resulting in increased awareness of the value of professional accountants and the services they provide," says IFAC Chief Executive Ian Ball. "It is now up to the profession to continue to meet the expectations of those that depend on our work and to contribute to rebuilding confidence in financial markets."

Leaders of accountancy organizations reported an increased trend in the need for services that are related in some way to the crisis. For example, in the coming year they expect their members in public practice to be more involved in corporate recovery and insolvency services, assurance services (other than audit), as well as risk and compliance related work. Members employed in business and industry are also expected to be more involved in risk management, as well as in the areas of corporate social responsibility and sustainability, internal control, and governance and compliance work.

Respondents believe that the most important issues for the accountancy profession in the coming year are:

• Addressing the needs of small and medium enterprises (SMEs) and small and medium practices (SMPs);
• Meeting expectations to identify and prevent fraud;
• Dealing with the changing regulatory landscape; and
• Transitioning to International Standards on Auditing.

They also believe it is increasingly important to address the transition to International Financial Reporting Standards, auditor liability issues, the use of new technologies like XBRL, and corporate social responsibility issues.

Recently-appointed IFAC President Robert Bunting has indicated that addressing the needs of SMPs and SMEs will be a priority for IFAC over the next two years.

"The survey confirms that meeting the needs of SMPs and SMEs is a global concern and a global goal. These entities are among those likely to suffer significantly from the current financial crisis yet they are among the least at fault. We must look for ways to mitigate the effect of the crisis on SMPs and SMEs," emphasizes Mr. Bunting.

Other survey results point to an increase in the attractiveness of the profession to students. According to survey respondents, the factors positively influencing students are the career options available and earning potential. However, leaders of accountancy institutes indicated that the two factors having the most negative impact on the attractiveness of the profession are work/life balance and legal liability. Most respondents indicated that they have initiatives in place to address these issues.

During World Accountancy Week, December 7, 2008 to December 13, 2008, accountancy institutes will be communicating the benefits of pursuing a career in accountancy and the role of professional accountants in contributing to economic growth and development.

IFAC is the worldwide 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 currently comprised of 158 professional accountancy bodies in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors - List of IFAC 2008 Global Leadership Survey Participants

Accountancy Institutes

Regional Accounting Organizations and Groupings

Eastern Central and Southern African Federation of Accountants
Interamerican Accounting Association
Confederation of Asian and Pacific Accountants
Eurasian Council of Certified Accountants and Auditors
The Institute of Chartered Accountants of the Caribbean
The Association of Accountancy Bodies in West Africa

This IAASB Staff Audit Practice Alert assists auditors by highlighting areas within the ISAs that are particularly relevant in the audit of fair value accounting estimates1 in times of market uncertainty.

It is an enormous pleasure and privilege for me to be able to share time with you this morning in order to discuss convergence with international standards on auditing.  President CA Ved Jain, may I start these remarks by thanking you most sincerely for the opportunity to share time with you, with your Vice President, CA Uttam Prakash Agarwal, with your fellow guests and with your members: fellow chartered accountants of the Institute of Chartered Accountants of India. 

May I also take this opportunity to congratulate you on your election as a member of the Board of the International Federation of Accountants, which became effective last week on 13 November 2008.  Our global profession has been illuminated by the contribution of the Institute of Chartered Accountants of India and its many excellent nominees to IFAC boards and committees; it will be even more brightly illuminated by your presence at its Board meetings.  Under your leadership, the Institute of Chartered Accountants of India is the largest professional body of Chartered Accountants in the World, with a strong tradition of service to the public interest and to the Indian economy.  Members of your Institute are increasingly working overseas, to the benefit of the economies of the countries in which they work. 

I am particularly delighted at the MOU signed yesterday between the Institute of Chartered Accountants of India and my own professional body of the Institute of Chartered Accountants in England and Wales.  This foreshadows a time of great development of our wonderful profession in India and the UK and of even more outstanding service to our two great nations.  May I congratulate you on your outstanding leadership of the Institute of Chartered Accountants of India, which will shine throughout the years ahead as a major milestone in the development of the Indian profession and the Indian economy. 

One of the epithets applied to the Institute of Chartered Accountants of India is "partners in nation building."  To me, this is an excellent characterisation of the contribution of our profession of accountancy to the world.  Our profession is concerned with adding value to economies, in particular in creating an investment climate of trust.  An investment climate of trust is key to raising capital on the national and international markets.  It is key to the provision of energy, water, education, healthcare, food, and employment.  Indeed, it is key to the fight against poverty-a fight which is so important to us all.

High standards of auditing are an essential component of an investment climate of trust, and it is my firm belief that trust will be higher if all nations adopt and implement International Standards on Auditing as the standards to be followed by auditors in their own country.  I am most encouraged by the progress which has been made in India towards the adoption of International Standards on Auditing and would strongly encourage you to complete this process at the very earliest opportunity.  Indeed, I am delighted to have been told that this is your firm intention.

This information paper contains the results of a survey conducted by the Professional Accountants in Business Committee (PAIB) in the spring of 2008, designed to identify similarities and differences in performance measurement structures in public sector entities and to assess the extent to which these structures help meet their objectives.

Leaders of over 100 accountancy organizations worldwide met in Rome on November 11-14 to participate in the International Federation of Accountants' (IFAC) Board and Council meetings, where they addressed the global financial crisis, convergence to global auditing and ethics standards, and the profession's role in sustainable development. At the conclusion of the meeting, President Robert Bunting of the United States assumed the IFAC Presidency for a two-year term ending in November 2010. Göran Tidström of Sweden assumed the position of Deputy President. In addition, the Council approved the appointment of three new members to the IFAC Board and the reappointment of four members to a second term.*

Newly elected IFAC President Robert Bunting, a past Chairman of the American Institute of Certified Public Accountants and an IFAC Board member since 2005, commented on the global financial crisis, pointing out "The financial crisis has clearly demonstrated how interconnected global markets are. This makes IFAC's initiatives to achieve convergence of international standards ever more urgent. Convergence to a common set of high quality accounting and auditing standards is essential to assuring the quality of the profession's services and is vital to the effective operations of markets and to promoting cross-border trade and investment."

"I believe that IFAC has a key role to play in restoring confidence in the markets," emphasizes Mr. Bunting. "We must demonstrate that our standard-setting processes are rigorous. And we must continue to promote strong corporate governance and the highest quality practices by the world's accountants, whether they work in public practice or in business and industry. Additionally, we need to scrutinize ourselves and look at what we can do better or differently. And lastly, we must be even more engaged with all market participants and actively collaborate with them in identifying and implementing the solutions that can prevent future crises."

Supporting these goals, the IFAC Council approved an updated Strategic Plan for 2009-2012. This plan has an increased focus on the implementation of international standards, on enhancing the relevance and sustainability of the profession, and on communicating more vigorously on regulatory, financial management, financial reporting, corporate governance, and other issues.

"Another area of focus in the strategy and one to which I plan to give my attention is meeting the needs of small and medium practices (SMPs) and enterprises (SMEs)," adds Mr. Bunting. "The SMP/SME community did not cause the current financial crisis, but they will be very much affected by it. We must do what we can, including ensuring that they are not subject to overly burdensome regulatory requirements, to contribute to their health and effectiveness."

The IFAC Strategic Plan for 2009-2012 is available on the IFAC website.

IFAC is the worldwide 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 currently comprised of approximately 158 professional accountancy bodies in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors - IFAC Board Members (November 2008 - November 2009)

Robert L. Bunting, President, United States

Göran Tidström, Deputy President, Sweden

Warren Allen, New Zealand**

Abdeljelil Bouraoui, Tunisia

Yugui Chen, China

Roberto D'Imperio, Italy

Kevin Dancey, Canada

Ingrid Doerga, Netherlands

Robert Hodgkinson, United Kingdom

Gen Ikegami, Japan**

Ved Kumar Jain, India*

Japheth Katto, Uganda

Olivia Kirtley, United States

David Leonard, United Kingdom

Bernadette McGrory-Farrell, Ireland**

Joycelyn Morton, Australia**

William Nahum, France

Norbert Pfitzer, Germany

Roberto Resa, Mexico

Syed Asad Ali Shah, Pakistan*

Luiz Carlos Vaini, Brazil

Steve Vieweg, Canada*

* New IFAC Board members as of November 2008
** IFAC Board members reappointed for a second term in November 2008

Congratulations to Fermín del Valle on his successful and productive term as IFAC President.

He had an eventful term of office and, under his leadership, IFAC accomplished many of its goals. In fact, he has been so energetic and committed to fulfilling the goals of IFAC that at times I wondered if he would leave anything for me to do. However, as inevitably happens, some of his initiatives will pass to me for further pursuit or implementation.

I'm pleased to carry on and complete his good work, including advancing the process for delivering quality translations of IFAC standards, further examining how to enhance business reporting needs, and supporting initiatives addressing the needs of professional accountants in business and small and medium enterprises, to name only a few.

I would also like to express my congratulations to Göran Tidström on his election as Deputy President.  We have already developed a strong working relationship and I look forward to a close association over the next two years.

As part of its mission to serve all professional accountants in business, including those working in the public sector, IFAC's Professional Accountants in Business (PAIB) Committee has conducted a survey to obtain information about the development of financial and non-financial performance measurement and reporting structures in various public sector entities around the world.

The results of this survey, contained in the information paper Developments in Performance Measurement Structures in Public Sector Entities, will help professional accountants in business, and others who work in the public sector, in evaluating and further improving their own financial and non-financial performance measurement structures. This will enable them to better plan, execute and control their organization's service delivery and to achieve a higher level of accountability. The results will also help IFAC's PAIB Committee to consider specific public sector aspects when developing International Good Practice Guidance for professional accountants in business.

The survey received 250 responses from public sector organizations at all levels of government and in a variety of sectors, including local councils, public utilities and various ministries from countries all over the world. The survey results clearly demonstrate that respondents are much more satisfied with the performance measurement structures in the public sector entities for which they completed this survey, if these structures possess the following, more advanced elements:

• A balanced combination of relevant financial and non-financial objectives, supported by specific measurement indicators (financial and non-financial KPIs);
• Accrual accounting for the budgeting, the (legislative) appropriation and the financial reporting processes;
• Capability for capturing, processing and reporting useful information on both financial and non-financial developments;
• Independent external review of the figures to report on financial and non-financial performance;
• A formal structure for measuring and assessing risk, and developing strategies to control it; and
• A regular review to ensure that the performance measurement structure remains effective and efficient.

IFAC (www.ifac.org) 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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

The staff of the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), has released a Clarity Project Update to help those with responsibilities relating to audits of financial statements set in motion plans to ensure that audits are effectively carried out under the clarified International Standards on Auditing (ISAs) when the standards come into effect.

In December 2008 the IAASB expects to complete its 18-month program to comprehensively review all ISAs and International Standards on Quality Control (ISQCs) to improve their clarity and, thereby, their consistent application. The standards approved in December are scheduled to be submitted to the Public Interest Oversight Board (PIOB) in February 2009, and if cleared by the PIOB, the program will be brought to a final conclusion then. The completion of this program, known as the IAASB Clarity Project, will result in 36 ISAs drafted in accordance with the IAASB's Clarity conventions subject to a single statement of authority, which will come into effect for audits of financial statements for periods beginning on or after December 15, 2009.

"In most cases of annual financial statements for a full 12 month year, the clarified ISAs will apply to audits of financial statements for periods that end after December 15, 2010. This may seem a long way off, but there is much to be done to ensure that implementation of the standards is smooth and that audits will be effectively carried out in accordance with them," states John Kellas, IAASB Chairman. Mr. Kellas continued, "All of the ISAs include improvements to enhance their understandability, and a significant number of them also include, as a result of their revision, substantive new requirements that aim to improve practice in a variety of respects. Accordingly, national standards setters, legislators and others involved in setting standards, IFAC members and associates, regulators, and accounting firms need to take such steps as are necessary for effective implementation, including national adoption, translation, amendment of manuals and processes and training. I urge everyone, therefore, to get ahead with preparations to ensure that implementation of the clarified standards is a success and that their benefits are achieved from the start."

This latest Clarity Project Update indicates the status of the clarified ISAs and clarified ISQC 1 as of October 2008 and where these documents can be accessed on the IAASB website. This staff report also provides an overview of the main changes to the ISAs arising from the Clarity Project, and highlights some of the matters to be considered as jurisdictions implement the clarified standards. It also lists the clarified standards published to date. The update may be downloaded from the Resources section of the IAASB website.

The IAASB plans to publish the set of clarified ISAs in IFAC's 2009 Handbook of International Standards on Auditing and Assurance, expected to be released in April 2009.

About the IAASB and IFAC
The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB and, as one element of that oversight, establishes its due process and working procedures.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.